Regulated returns toolkit

Utility ROE
calculator.

A clear, defensible estimate of return on equity using the framework established by FERC Opinion No. 594.

Methodology reference
Opinion No. 594

Two-step DCF with an 80% / 20% growth weighting, paired with CAPM.

Filing workspace

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Composite ROE i
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Enter your assumptions below
DCF
CAPM
01
Primary method

Two-step DCF

80 / 20 growth split

The DCF result combines the current dividend yield with a weighted growth estimate. Set the near-term and terminal growth expectations for the utility.

DCF calculation
4.50% + (80% × 5.00%) + (20% × 3.00%)
DCF ROE—
02
Market check

CAPM

Market-based

The Capital Asset Pricing Model estimates the required return from a risk-free rate plus the utility’s systematic risk premium.

CAPM calculation
4.25% + (0.85 × 5.50%)
CAPM ROE—