Expert witness says Young Brothers forecasting omits price elasticities, cautions limits of models

Dr. Paul Brubaker, an economic forecasting witness who testified in Docket No. 2024-0255 at a Public Utilities Commission evidentiary hearing, told commissioners that his volume forecast model is a macro, fixed‑price approach and does not include estimated price‑elasticity effects. The testimony underscored gaps witnesses say regulators and parties must consider when weighing Young Brothers LLC’s rate proposals.

Brubaker said his model relies on aggregated “real” variables such as cargo tonnage, visitor counts and building permits, and that it has produced broadly consistent fits for historical tonnage. But he told the commission he has not modeled correlations between prices and cargo volumes and said he has never had access to firm‑level prices that would be needed to estimate customer price responses. “You can’t model pricing responses without the prices, and I’ve never seen the prices. To this day, I’ve never seen the prices,” Brubaker said on cross‑examination.

Why this matters: Regulators and intervenors use volume forecasts to estimate revenue and the effect of…