For nearly a decade, HPC America has advocated what we call a “CO-centric” model of regulatory accounting for utility companies on SAP. The “CO” refers to the SAP Controlling module, which contains valuable cost data that our customers use to support FERC balances. This delivers numerous benefits that, ultimately, improve a utility’s responsiveness to regulatory inquiries and strengthen its rate case position.
The traditional approach to FERC accounting on SAP only utilizes Finance (FI) module documents, which contain primary costs, to derive regulatory account data. This design—which HPC America itself originally developed for Pacific Gas & Electric 20+ years ago—has some inherent weaknesses: FI, CO and FERC do not reconcile; the trace algorithm is error-prone; and complex cost flows can become opaque and difficult to understand and explain.
In contrast, HPC’s modern CO-centric model traces all primary and secondary costs; eliminates reconciling differences between SAP FI, CO, and FERC; and simplifies cost flow complexity with little disruption to current business processes. As a result, utilities gain a faster monthly FERC close, improved rate case support, and greater end-user self-sufficiency for regulatory reporting activities. And since GAAP and FERC match, there’s one version of the truth for both internal and external reporting.
Utilities on either SAP ECC 6.0 or SAP S/4HANA can realize the benefits of HPC’s CO-centric model. Contact us to learn more.