What We Do
Rate Case Support and Strategy
MCR helps clients develop successful rate case strategies for state jurisdictions and the Federal Energy Regulatory Commission (FERC). We help evaluate the decision to file a case, define overall objectives, support the underlying rationale, prepare supporting analysis of regulatory issues, and determine the optimal timing for cases. MCR works with clients to develop a regulatory strategy that will be sustainable in the long run. We carefully examine the nature of expected short-term and long-term changes to both costs and revenues, and then we identify alternative potential regulatory strategies addressing the specific circumstances that each client faces.
Pre-Filing Review
MCR provides pre-filing reviews of regulatory petitions, pre-filed testimony, tariffs, exhibits, and minimum filing requirements before submission to regulatory commissions. MCR’s experienced professionals bring a wide variety of regulatory and ratemaking experiences; our clients benefit from our constructive reviews and recommendations on improvements to proposed filings. Conducting fully independent pre-filing reviews improves filings and builds more compelling cases for the desired regulatory outcomes.
Cost of Service Support
MCR reviews and validates your internal cost of service model to compare results and evaluate allocation methodologies for consistency with previous runs used in filed cases. Our regulatory professionals analyze allocation strategies most likely to be utilized in future rate cases or studies of alternative rate designs and make recommendations for change. For example, an existing schedule that has been active for years may need to be split into multiple schedules because the types of customers have changed over time. MCR can provide this support using results from your current cost of service model or our proprietary cost of service model COST™ In addition, MCR has developed or analyzed studies to support cost of service work, such as minimum distribution studies, lead lag studies, and depreciation study reviews.
Cost Allocation Support
MCR’s professionals have extensive experience in developing studies to allocate rate class revenue requirements and to design specific rate components. We have the capability to develop embedded and marginal class cost of service studies. We also prepare studies for revenue requirement calculations and for seasonal and time-of-use pricing. We develop sustainable solutions that adapt to changing market conditions, achieve new regulatory and pricing objectives, and match cost recovery with cost causation.
Rate Design Development
MCR works with our clients to develop regulatory filings that allow recovery of revenue requirements through a variety of traditional rate mechanisms, including modification to customer charges, evaluation of time-of-use periods, revisions to block structures, and development of other riders that recover costs of changes in infrastructure and operating costs. MCR helps clients determine the mechanisms that fit specific circumstances and develop regulatory filings based on solid justifications to support the selected approaches.
Expert Testimony Development and Review
MCR supports our clients in preparing and providing testimony; our expert contributions enable utilities to provide successful responses to regulatory participants. MCR staff have successfully testified regarding revenue requirements, cost of service, rate design, and alternative ratemaking. MCR staff have presented and supported expert testimony on behalf of clients before numerous state regulatory bodies and FERC. In addition, MCR staff have provided support to clients to ensure testimony is organized and provided in a manner consistent with regulatory requirements.
Beneficial Electrification and Revenue Enhancements
Beneficial Electrification
MCR identifies beneficial electrification opportunities and analyzes them from the perspectives of key stakeholders to assist clients in the design and eventual launch of pilots or fully scaled programs and/or products. Recognizing that various definitions of beneficial electrification exist, MCR begins with the following working definition and customizes it to frame clients’ efforts to their exact need: “Beneficial electrification is a means of powering end uses of energy with electricity; by doing so, the action must include at least two of the following without adversely affecting the others: 1) Does not negatively impact the environment and reduces GHG emissions/pollutants, 2) Saves consumers money in the long term, 3) Improves the quality of life for consumers, or 4) Provides enhanced grid management, efficiency, or other benefits.” MCR provides modeling expertise, regulatory and rate guidance, marketing channel and product delivery expertise, and guidance to balance internal and external stakeholder interests.
Revenue Enhancement
MCR works collaboratively with clients to provide customized revenue enhancement strategies, based on corporate goals and the client’s existing regulatory environment. We leverage our regulatory and financial expertise to ensure viable opportunities are offered while retaining customers and maintaining good customer experiences. MCR’s process involves facilitating client team discussions, strategically thinking through options and analyzing the viable ones; choosing the services with the greatest revenue potential; and developing a regulatory plan to gain approval for the offerings while ensuring the services align with corporate objectives. The resulting revenue enhancement strategy provides an actionable plan for our clients to achieve increased revenue opportunities.
Alternative Rate Designs, Incentives, and Cost Recovery Mechanisms
MCR uses a collaborative approach to develop specific proactive alternative rate methodologies, such as straight fixed variable rates, decoupling, weather normalization, formula rates, or multiyear rate plans, to ensure rate mechanisms reflect the operational and financial requirements of our clients. MCR creates innovative rate designs to match the unique demands of an ever-changing and evolving marketplace. We work closely with our clients to study and modify rate mechanisms to meet competitive challenges and produce desired revenue requirements.
Stakeholder Participation/Advisory Service
Working group meetings with external stakeholders can be time consuming for utility regulatory staff. MCR works collaboratively with our clients to understand their positions, thus enabling us to represent our clients’ views in working group discussions. We have successfully represented our clients at stakeholder meetings regarding a range of topics, including rate design, planning, and forecasting for energy efficiency and distributed energy.
Strategic Regulatory Analysis
Regulatory/Legislative Support and Policy Development
MCR helps our clients develop, implement, and assist with specific tasks in this process. We review and evaluate drafts of legislation and regulations and prepare comments and opinions regarding impacts on the client. MCR has advocated client interests before state regulatory commissions while coordinating regulatory efforts across corporate functions. MCR’s experiences cover a wide array of topics, such as deregulation and re-regulation drafts, Regional Transmission Organization formation, energy efficiency and demand response program development, FERC transmission issues, advanced metering, distributed generation, microgrids, and electric vehicles. MCR works collaboratively with our clients on creating policy and regulatory positions, while developing advocacy strategies that align with corporate strategies.
Rate Schedule Review
Tariff and Billing Analyses
MCR develops analyses that are based on decades of experience and industry best practices. MCR delivers analysis of each rate schedule with findings, professional insights, and actionable recommendations, all packaged in a final report, leading to improved consistency across all tariffs. When tariffs are analyzed by an independent organization, utilities gain better control over the process outside a formal rate case proceeding.
Proper Rate Schedule Determination
MCR helps interpret and develop a systematic approach to ensure our clients choose proper rate schedule determination for their commercial and industrial (C&I) customers. Through our rate option review and analysis services, we help our clients proactively provide outreach to their C&I customers, benefiting our utility clients through improved relationships with their C&I customers and regulators.
Regulatory Filing Management
Case Management
MCR facilitates the development and management of rate cases at both the state and federal levels. We provide support and guidance in overall process management, prioritize and address key issues, develop structure and strategy of supporting studies, refine testimony and exhibits, administer the flow of interrogatories and other discovery requests and responses, and manage the filing of required schedules and work papers.
Witness Training
MCR offers training courses in ratemaking, regulatory accounting, and witness effectiveness. Our Understanding Ratemaking course covers the fundamentals of ratemaking, advanced ratemaking, and contemporary topics in ratemaking. Similarly, MCR’s Regulatory Accounting class helps bridge the understanding gap between traditional GAAP and regulatory accounting requirements. Our Becoming a More Effective Witness course is customized for participants who have a role in an upcoming hearing and need to understand how to become an effective witness.
Energy Efficiency and Demand Response Regulatory Support
MCR combines its regulatory and energy efficiency experience to support our clients in these types of filings. From developing and defending load potential studies to designing programs, understanding the nuances of setting incentive levels, and applying cost-effectiveness tests, MCR professionals develop and review energy efficiency plans and create needed regulatory filings and justifications. MCR also has experience working through EM&V processes and dealing with statewide evaluators to ensure program results are presented in a manner that supports proper credit for the results achieved.
Load Forecasting Process Review
MCR works jointly with clients to assess the appropriateness of their load forecasting process and supporting models and to identify any opportunities for improvement. This analysis can include a granular review of a client’s data collection requirement or a macro-level assessment of load forecasting that ultimately supports power supply requirements. MCR’s assessment can include a benchmarking study that provides our clients meaningful comparisons to their peers.
MCR Models
COST™
MCR’s Cost of Service Toolis ideal for regulatory professionals seeking to provide greater transparency to regulators, intervenors, and other stakeholders. The tool provides full functionality to design rates for rate case filings as well as typical bill analysis. Built by regulatory professionals in Microsoft Excel, COST™ is a fully functional cost of service model with open logic for audit, review, scenario analysis, and user editing. It allows for development of the cost of service without any buried code or time-consuming run-time macros. New cost elements, revenues, or rate base items can be quickly integrated into the analysis; adding new rate schedules is as simple as inserting a column into Excel. Learn more by downloading a COST™ brochure and reading about five features a cost of service model must have. Upon request, MCR experts will facilitate a live, online demonstration of COST™ and will answer your questions during the meeting. Contact us for more information.
Rate Design Module (included in COST™)
MCR’s rate design module connects seamlessly with the COST™ model. Rate schedule revenue requirements are imported from the client’s cost of service model, and rate design personnel can choose to manually adjust the proposed rate increase for each class or have the model run the calculations. MCR provides additional rate design support in conjunction with and separate from this model.
Financial and Regulatory Strategy Tool (FRST™)
Is a sophisticated planning tool that is easy to operate without the software coding and expense of proprietary “black box” models on the market. FRST™ has a unique approach to regulatory analysis, allowing a high degree of flexibility. The model calculates revenue requirements based on key drivers and identifies the need for potential revenue changes. The easy-to-use regulatory planning panel allows for historic and future test years with movable test periods and rate effective dates. Analysts can quickly adjust rate base, costs, and revenues based on the most recent rate case or test new assumptions.
FRST™ is written in Excel with a unique structure that manages large amounts of data, yet requires no coding, and allows users to quickly change the model’s logic and reports to address changing business needs. With its flexible data loading and mapping function, users can easily load data from budgeting, general ledger, and capital asset systems. FRST™ seamlessly integrates with production cost and gas supply planning models.