A conversation with Wade Horigan, Principal, and Remo Shestani, Lead Analyst, of Tangibl Group
When Undine, a rapidly expanding water and wastewater utility in Texas, set out to modernize its financial and regulatory platform, it faced a complex landscape: aging infrastructure, inconsistent tariffs, and rising compliance pressures across more than twenty operating companies.
To meet these challenges, Tangibl led the company through a full general rate case, preparing nearly 200 schedules and delivering a fully integrated approach to cost of service, rate design, cost of capital, working capital, and rate base support. The result was a landmark settlement that consolidated 24 tariffs into just four, stabilized customer bills, and positioned Undine for reliable, scalable growth.
In this interview, Wade Horigan and Remo Shestani walk through the challenges, technical strategies, and outcomes of the case and share how Tangibl’s unified regulatory and financial modeling helps fast-growing utilities plan smarter, serve better, and operate with confidence.
Understanding Undine’s Challenge
Interviewer: To begin, what situation was Undine facing when they came to you?
Wade: Undine operates a number of small systems in fast-growing parts of Texas. Many of those systems were acquired over the years and came with aging assets and rising compliance obligations. Growth brings opportunities, but it also increases the pressure on reliability and capital planning. Our task was to help align the company’s regulatory and financial framework with what it actually costs to deliver essential service.
Remo: Because there were so many operating companies involved, the rate structure was fragmented. Undine had fifteen water tariffs and nine wastewater tariffs on the books. That complexity makes everything harder for customers, regulators, and the utility itself.
“Tangibl’s job was to take a complex, multi-system operation and build a clear, evidence-based framework that supports both reliability and affordability.”
What Made This Case Complex
Interviewer: What were the major challenges that made this case stand out?
Remo: The breadth. We weren’t just preparing a cost-of-capital study or a cost-of-service model. We handled the entire package: rate design, lead-lag study, cost of service, working capital, cost of capital, rate base support, depreciation, and property records. Most utilities hire multiple firms to cover it all, coordinating reports from a depreciation expert, a cost of capital expert, etc. Tangibl delivered an integrated, end-to-end solution.
Wade: We also worked with a large group of parties: the Public Utility Commission of Texas, the Office of Public Utility Counsel, and multiple customer representatives. Serving this many stakeholders requires transparent modeling and clear documentation.
“It is rare to find a single consulting team that can perform every major component of a rate case. Tangibl delivered consistency, accuracy, and efficiency across the full scope.”
Preparing the Filing: Nearly 200 Schedules
Interviewer: Can you talk about the work that went into the filing?
Remo: We prepared, assembled, reviewed, and sponsored 180 schedules. This included schedules sponsored by staff internal to the company. We also filed direct and rebuttal testimony on cost of service, rate design, working capital, cost of capital, and taxes. Tangibl was the sole consultant supporting the entire proceeding.
Wade: That level of coordination ensures everything ties together. Rate base, working capital, cost of capital, and rate design all reflect the same underlying data and the same story. Many of the schedules were dependent on the data from other schedules and workpapers, so we had to ensure the schedules were interlinked, auditable, and accurate. This diligence on the upfront case preparation enabled easy iteration of party positions for the purposes of analysis, rebuttal and to facilitate settlement discussions.
The Lead–Lag Study in Plain Language
Interviewer: Many readers may not know what a lead–lag study is. Can you explain it?
Remo: Customers pay their bills after using water, but the utility pays workers, power bills, chemicals, and suppliers while providing service. The lead–lag study measures that timing gap using actual billing and payment data. The result is the cash working capital component of rate base, which ensures the utility has enough operational cash to serve customers reliably.
“Working capital is cash that keeps the water flowing every day. Our lead–lag study turns real payment data into reliable service.”
Cost of Capital: Evidence and Creditworthiness
Interviewer: What evidence supported your ROE recommendation?
Remo: We used CAPM, a DCF method, Bond Yield plus Risk Premium, and a Risk Premium versus allowed ROEs analysis. Then we validated the results against proxy utilities and key credit metrics. The goal was an ROE that reflects Undine’s risk profile and maintains access to reasonably priced capital. Reliable service depends on that.
Rate Design and Tariff Consolidation
Interviewer: How did you approach rate design?
Remo: Transparency and stability. We worked with the parties to create phased-in rates instead of a single large adjustment. That helps customers plan. Consolidating fifteen water tariffs and nine wastewater tariffs down to two each was also a major accomplishment. The modern structure is easier for customers to understand and improves administrative consistency.
“Consolidating twenty-four tariffs into four gives customers clarity and gives the utility a strong foundation for long-term planning.”
Settlement Results
Interviewer: What was the outcome of the case?
Wade: The initial request was for a $7.2 million rate increase. The settlement, after certain expense-responsibility adjustments, is in the neighborhood of $6 million. It is a good outcome for all parties involved and is well-supported by Undine, the Public Utility Commission of Texas, the Office of Public Utility Counsel, and customer representatives. The Commission approved the agreed to water and sewer rates and associated tariffs on Feb 6, 2026.
Remo: It is a very positive outcome. It balances investment needs with customer protections, and strengthens reliability, stabilizes billing, and builds a platform for future upgrades.
Long-Term Partnership and Data Stewardship
Interviewer: Tangibl has worked with Undine for many years. How did that experience shape the case?
Remo: We maintain property records, depreciation schedules, and quarterly rate-base calculations for more than twenty of Undine’s operating companies. That meant we were already deeply familiar with their assets, their data, and how their systems integrate. It also meant we could respond quickly and accurately to discovery and evidence requests.
Wade: Undine has been a leader in the Texas water and wastewater industry, acquiring and assimilating numerous small or distressed systems and making significant capital investments to improve service and quality.
“When a consulting team maintains the data, the rate base, and the depreciation records, it can stand behind every number in the case.”
What Makes Tangibl’s Approach Different
Interviewer: What should utilities, co-ops, or municipalities take away from this project?
Wade: Tangibl offers a truly integrated regulatory and financial solution. We prepare cost of service, rate design, cost of capital, working capital, and depreciation studies in a unified approach. That consistency reduces errors and shortens timelines.
Remo: We also tie financial decisions to reliability outcomes. For us, cost recovery and capital planning are tools for safe, predictable, compliant service.
“Tangibl connects finance to service reliability. Every recommendation we make has a direct link to customer outcomes.”
Three Takeaways for Non-Technical Readers
Interviewer: Before we close, what are the three things customers should know about this case?
Wade: Reliability. Rates fund the infrastructure that keeps water safe and dependable.
Remo: Fairness. The phased-in structure ensures stability instead of sudden bill impacts.
Wade: Accountability. Every dollar in the plan supports a specific system improvement or service outcome.
Interviewer: Thank you both. This has been an insightful look into what it takes to modernize a multi-system utility and ensure reliable service in fast-growing communities.
In Summary
Tangibl’s integrated approach, uniting cost of service, rate design, cost of capital, working capital, and property record expertise, enabled Undine to modernize a complex, multi-system rate structure with clarity and consistency. The resulting framework consolidates tariffs, improves reliability, and supports long-term financial health.
As utilities confront aging infrastructure and rising compliance demands, aligning financial strategy with dependable service is essential. Tangibl helps utilities, cooperatives, and municipalities build regulatory models that deliver affordability, resilience, and trust.
For more information about this, or about Tangibl, please visit tangiblinc.com.