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Consumer Advocate expert recommends 12% ROE for Young Brothers; opposing counsel questions methodology and qualifications
Summary
Dr. Pavlovic, testifying for the Consumer Advocate at the PUC hearing, recommended a 12 percent allowed return on equity for Young Brothers, relying on ranges from the utility’s cost‑of‑capital analysis and a "rough measure" comparison of betas. Counsel for Young Brothers challenged Pavlovic’s methods and qualifications during cross‑examination.
Dr. Pavlovic, a Consumer Advocate witness, told the Public Utilities Commission he recommends a 12 percent allowed return on equity (ROE) for Young Brothers.
Pavlovic said he relied in part on the ROE ranges presented in the utility’s cost‑of‑capital filings (characterized in the transcript as the overall reasonable range from another expert’s analysis). He explained he used the intermodal transport proxy‑group reasonable range (reported in testimony as roughly 11.75 percent to 14.5 percent before risk adjustment) and positioned his recommendation toward the lower part of that range. He described part of his assessment as a "rough measure" and…
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