Insights
Lessons Learned from the Rate Case Process
As utilities find themselves in need of increased revenue, it is important to evaluate lessons learned from prior rate case proceedings so the next rate case will be more successful. This paper focuses on lessons learned in four areas: 1) understanding the regulatory process, 2) employing stakeholder engagement, 3) confirming data integrity, and 4) leveraging staff’s experience to ensure rate case needs are met.
Cost of Service Tool (brochure)
The Cost of Service Tool (COST™) is the newest addition to MCR’s suite of spreadsheet applications. COST™ is ideal for regulatory professionals seeking to provide greater transparency to regulators, intervenors and other stakeholders. The modeling tool also provides flexibility for in-house scenario analysis and rate design options. Built in Microsoft Excel, COST™ is a fully functional cost of service model with open logic for audit, review and user editing.
Download our COST™ brochure to learn more about the product that adds value to our clients.
Download our IT support requirements for COST™.
Top 5 Features a Cost of Service Model Must Have (point of view)
In this era of increasing regulatory transparency and the need for innovation in rate design alternatives, utilities must have a state-of-the-art cost of service model to perform the necessary analyses. MCR recently conducted a survey of utility regulatory professionals on what they see as the “Top Five” key features that are required of today’s cost of service models. MCR’s Cost of Service model was developed to address these key features.
Download the Cost of Service point of view
Cost of Service Options
MCR works with our clients to determine the best approach to cost of service. We offer a few options for rolling out our Cost of Service Tool (COST™), including licensing the model along with additional consulting support. Download our brief overview, Cost of Service Options for Utilities, to learn more about these alternatives.
Is your EV strategy ready – yet?
Electric vehicles (EV) used to be something utilities thought of as on the horizon, but today they are very much here. The potential for significant increases in electricity sales is obvious, but EV also bring opportunities for enhanced customer engagement and experience. However, there are also considerable challenges related to infrastructure requirements to serve new EV loads, and how to manage or optimize the loads. Retail rates for charging, leasing chargers, charging subscriptions and customer-facing incentive programs function hand-in-hand to harness the opportunities and address the challenges.
MCR is providing a three-part series on EV for utilities, starting with conceptual and strategic issues, to be followed by a tariff-oriented paper and a client case study early in 2023.
Download the “Is your EV strategy ready – yet?” paper
Benefical Electrification: A Smart Strategy Makes the Difference
Utilities nationwide are launching beneficial electrification (BE) initiatives, both to respond to market and policy evolutions and to enhance the growth of their electric business. Success begins with a well-thought out strategy.
Download Benefical Electrification Insight.
The Age of Alternative Ratemaking (paper)
The use of Alternative Ratemaking Mechanisms (“ARM”) is not a new concept. Yet, despite its solid record of being beneficial to utilities, regulators, and stakeholders, it has historically had a slow level of adoption by many states. That has now changed, and we are entering a new regulatory age: The Age of ARM. Even states that have been extremely reticent to shift away from the traditional rate design methodology are now moving to embrace the use of alternative ratemaking. Whether or not your state has adopted the use of ARM, it is important to consider ways in which these mechanisms could create both opportunities and challenges.
Becoming a More Effective Witness Course (brochure)
MCR provides services to enhance our clients’ abilities to present and advocate their positions in regulatory proceedings. MCR educators pull from their own experiences presenting and supporting expert testimony on behalf of clients before numerous state regulatory bodies and FERC. Additionally, MCR conducts seminars, workshops and mock trial training exercises to enhance the effectiveness of rate departments and in-house fact, policy and expert witnesses.
Our program, “Becoming a More Effective Witness,” provides a comprehensive approach to developing and refining communication skills. It combines classroom instruction, workshop activities and mock hearing experiences. The class addresses the theory, application and practice of effective witness skills and techniques. It also provides practical guidance to prepare and present every phase of testimony. “Becoming a More Effective Witness” focuses on the unique challenges of presenting testimony before a regulatory body.
Download the witness effectiveness course brochure
Contemporary Ratemaking Course (brochure)
A number of MCR’s clients have expressed a need for a comprehensive ratemaking course for their internal regulatory teams. While there are certainly a number of existing alternative rate classes to choose from, they don’t always fit a utility’s needs because they:
- Lack a utility focus
- Include consumer advocates and commission staffs as participants and presenters
- Tend to be rather expensive, especially when travel costs are considered
- Use a one-size-fits-all approach that is not well suited to a specific utility’s needs
MCR’s “Contemporary Ratemaking” training course addresses the issues mentioned above and helps our clients increase their staff’s understanding of the regulatory process and enhance their skills in becoming better cost of service and rate design professionals.
The course is customized to meet our client’s specific needs, including those from rates, legal, accounting and operations. Some of the participants are relatively new to rates and regulation and others are more experienced. To meet the needs of both, the course is held over multiple days and is designed to cover the fundamentals, advanced ratemaking and hot topics.
Download the contemporary ratemaking course brochure
Modern Electric Vehicle Rate Design Options
Electric vehicle (EV) sales increased dramatically in 2022, with more than 750,000 new all-electric cars registered in the United States – a 55% increase over 2021 sales. Although forecasts vary widely, many analysts expect strong acceleration in EV adoption. Some analysts forecast EVs could represent 50% of total U.S. passenger car sales by 2030.
If growth rates to 2030 are even close to those projected, electric distribution systems will face massive challenges as most are not equipped to handle the increased load. One effective action utilities can take is to design tariffs to manage the charging load, fairly recover costs, and empower customers with flexible rate alternatives. To better understand these pricing solutions, we identified and analyzed several modern EV rate designs and explored how to implement them.
This white paper is Part 2 of the series, “Is Your EV Strategy Ready – Yet?
Five Key Strategic Considerations for the Utility Regulatory Process
Of the many business functions unique to utilities, the process of setting rates is probably the most arcane and least understood by those outside the industry. While developing a financial model in support of a given tariff is relatively straightforward and formulaic, implementing it in the rate-setting process comes with myriad subtleties. The state-level regulatory context typically involves a quasi-judicial process and multiple constituents with different and often competing motivations. This paper examines some strategic considerations associated with the rate-setting process, highlighting the importance of the utility’s regulatory relationships.
SECURITIZATION: A Valuable Tool for Cost Recovery Opportunities Outside a Normal Rate Case
In recent years, a flurry of legislative activity has addressed utility securitization. Seventeen states have passed legislation offering securitization options to their electric utilities in the last decade, and several other states have proposed similar legislation. Securitization, while not a new concept, has been a successful tool for utilities to improve cost recovery while saving customers money on their electric bills. In this paper, we analyze trends in securitization legislation and detail the options that may work for your utility.
Read the securitization white paper>>>
Cash Working Capital and Lead-Lag Studies
In the evolving regulatory landscape, utilities across the electric, gas, and water sectors are facing increasing scrutiny from regulators who are demanding more detailed calculations of cash working capital. This requirement reflects a broader push for greater accuracy in the financial management of utilities, ensuring that rates charged to customers are fair and reflective of actual operational needs. Our team understands the complexities of cash flow management and the regulatory environment, ensuring that your utility’s cash working capital is calculated accurately and efficiently.
Read the Cash Working Capital and Lead-Lag Studies Insight>>>
Rate Case Services
MCR develops solutions to key issues facing utility executives. MCR works with you and your stakeholders to provide solutions that work in your regulatory jurisdictional environment. Our industry experts assist electric, natural gas and water companies.
Read the Rate Case Services Insight>>>