Helping a multi-district water utility calculate revenue requirements through implementation of an integrated regulatory analysis system

Background

A water utility with multiple districts wanted a tool to calculate revenue requirements and develop the standard filing requirement reports for one of their states. The tool needed to calculate all districts concurrently, be easy to maintain and be highly accurate. The team also wanted to bring cost of service modeling in-house rather than continue with a consultant. The utility turned to MCR to address their problem.

Solution

MCR developed an integrated system that combined revenue requirement modeling and cost of service modeling with MCR’s Cost of Service Tool (COST™). Key features included an easy-to-use mapping tool to capture new GL accounts from test year data, automated loading of data to ensure model reliability and a fully functional print control panel to easily generate needed outputs for filing. The model was customized to provide the required filing documents for the utility’s state regulatory commission. The model provided a data feed to the cost of service logic to calculate cost of service by rate schedule and utility district.

Results

MCR’s COST™ model was implemented prior to a rate case and completed in 8 weeks. Client staff were able to substantially reduce filing development time and improve their ability to adopt last minute changes as part of their settlement process. The model has since been expanded to provide a two-year revenue requirements forecast to enable planning for future rate cases.