Helping an investor-owned electric utility implement COST™ to achieve greater cost transparency

Background

An investor-owned utility was involved in a complex rate case involving significant shifts in rate structure across all classes. The initial Cost of Service filing was prepared using a database tool that provided output without the underlying logic.

Intervenors and commission staff expressed frustration with their lack of access to the underlying logic of the model. The issue became more pronounced as the potential outcomes of the rate case included new rate schedules and a unique proposal to address net metering issues.
The resulting rate order included a provision for the company to adopt a more transparent Cost of Service model.

The utility engaged MCR to provide a solution allowing for robust, error-free modeling of the Cost of Service while providing third parties the access they were promised via the rate order.

Solution

To implement the Cost of Service Tool (COST™), MCR made use of its proprietary mapping tool, which meant minimal changes to the client’s existing datasets. MCR was then able to quickly roll-out COST™, providing an accurate Cost of Service model with the flexibility needed for unknowns of the future.
The built-in scenario capability met third party needs to test alternative allocations and adjustments while ensuring an accurate result. MCR provided the client a separate tool enabling comparison of multiple alternatives.

Results

COST™ supported the utility for its most recent rate case. The flexible architecture allowed for a series of last-minute changes required by the process and ensured a timely submittal.