MCR

Home > Financial Advisory > Insights

Insights

You must be logged in to download these resources. Please log in or register.

Financial Risk & Strategy Tool

FRST LogoFRST™ is the financial modeling tool of choice for finance professionals who want a sophisticated planning tool that is easy to operate without the overhead, software coding and expense of proprietary “black box” models on the market.

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; and, FRSTTM seamlessly integrates with production cost and gas supply planning models.

The FRST™ reporting facility is often cited as a favored feature. It has the ability to define a virtually unlimited number of time periods and levels of detail for analyzing financial and operating data. Analysts can quickly compare the results of multiple planning scenarios and perform variance reporting of budget vs. actuals and budget to forecast.

FRST™ is the market leader in modeling utility risk analysis. The risk analytics function uses our proprietary templates and logic, including most utility-related risks, and integrates with Crystal Ball™ and @Risk™ to run thousands of scenarios in seconds. The reports provide management with a complete view of enterprise risk with key measures that include Earnings at Risk, Cash Flow at Risk and Capital Adequacy.

Why our clients choose FRST™…

  • Open, flexible model
  • Fast processing
  • Robust reporting & analysis
  • Risk analysis capabilities
  • Knowledgeable consultants
  • Easy to work with consultants
  • Fast implementation (less than 8 weeks)
  • Value (1/3 the cost of the competitors)

What our FRST™ clients are saying…

“It was lightning speed ahead of our prior model. With FRSTTM, we could create more reports, more dimensions in a fraction of the time. There hasn’t been a need that’s come up that we haven’t been able to solve with FRSTTM.”

“We liked that FRST™ is Excel-based and has the balance sheet and cash flow forecasting. Anyone can own it, so we could easily make changes within Excel.”

“We use FRST™ for executive management purposes in terms of looking at strategic issues, looking at financial information to provide credit agencies, earnings outlook for investment analysts. It is our budgeting tool from an income statement perspective.”

“MCR has a great product and delivered exactly what we needed. They have a skillset that’s unique to the utility industry.”

“There’s no doubt FRST™ has enabled us to have a much better handle on our key financial metrics and requirements, and to be able to articulate those requirements to the Board and to regulators.”

“The initial development and flexibility of FRST™ just blew us away. With MCR’s knowledge of utilities and experience in forecasting, implementing the FRST™ model worked really quite well.”

FRST™ supports electric, natural gas and water utilities. To learn more, download the brochure that fits your corporate structure.

Download the FRSTTM brochure for municipals
Download the FRSTTM brochure for cooperatives
Download the FRSTTM brochure for IOUs

Debt Management System: Specifically Designed for Managing Electric Cooperative Debt (brochure)

The typical electric cooperative can have hundreds of individual long-term debt issuances. Oftentimes, this leads to the creation of several disjointed spreadsheets throughout the organization, leaving it difficult to find the most up-to-date information on company debt.

MCR’s Debt Management System (DMS) provides a centralized database for storing, administrating and reporting an unlimited number of debt issuances.

Download the debt management system brochure

Capitalization Policy and Units of Property Integration (case study)

A large IOU operating in multiple jurisdictions faced challenges after merging with another utility; the existing Unit of Property (UoP) catalogues for the merged generation fleet, transmission, distribution and general utility property were burdensome and a constant source of debates in project capital and expense classification decisions. One senior accounting manager at the newly merged utility stated the UoP catalogues had become “out of control.”

Aligning the capitalization methods of both companies provided MCR with an opportunity to integrate industry best practices, discuss critical future projects and address unresolved organizational differences. IOU senior leaders also wanted to establish procedures to ensure the IOU could defend new levels of capitalization, should the public service commissions overseeing the company’s jurisdictions raise questions. MCR was asked to lead this project based on our prior experience with the client working on a UoP catalogue integration for a merger with a former utility.

Download the capitalization policy and UoP case study

The Emerging Risk from Distributed Generation. Quantifying the Impact for G&T Cooperatives and their Members (white paper)

For the past two decades (at least), distributed generation (DG) supporters (or perhaps better put, evangelists) have predicted that the dramatic rise of DG, and conversely the dramatic fall of utilities as we know them, was just around the corner. All that was needed was an additional tax credit (or two) to get the ball rolling towards the economies of scale that would drive costs down and drive demand up. But, little happened – until now. The impact on distribution cooperatives from DG can be significant and it is important for G&T organizations to understand the potential impact on member net margins and the potential resulting rate increases to end use customers.

Download the DG for G&T cooperatives white paper

Risk is Not a Four-Letter Word. Reflecting Risk in Planning & Forecasting (white paper)

The issues confronting generation and transmission cooperatives are often the same issues facing investor owned utilities. Many IOUs have taken steps to better understand and manage their business risks. G&T coops also need to manage risk. It’s no easy task, but management can start by focusing the planning process on understanding how key risk factors impact key performance variables such as member rates, the TIER ratio, and cash flow.

Download the risk white paper

Something Old, Something New. How to Develop Strategies That Manage Risk, Create Value, and Grow Earnings (white paper)

As utilities seek new ways to deal with a changing business environment, they need to think about a new approach to strategic planning…one that involves the analytical consideration of growth, value, and risk. Making the new framework calls for new tools,data and processes.

Download the strategy development white paper

How Much Risk Is Too Much? (white paper)

As risk measures have evolved from the analysis of Value-at-Risk in the wholesale book to broader enterprise-wide risk metrics, such as Earnings-at-Risk and Cash Flow-at-Risk, the primary question companies are asking is … “How much risk should we take on as an organization?” This can be a very challenging question to address and has stumped most companies that have attempted to integrate objective-setting for risk as an element of strategic planning. A better question might be, “How much risk can we take on?” The answer to this question is now becoming more clear with better analytic techniques.

Download the measuring risk white paper

Developing Robust Business Cases. A Proven Approach to Optimize G&T Capital Budgets in a Tight Credit Market (white paper)

G&T executives are facing increased pressure to reassess capital expenditure levels in response to the recent credit crunch and a slowing economy. However, requirements remain to build additional generation, new transmission and address environmental regulations. The challenge is to optimize and reduce capital spending in this environment in a systematic fashion that recognizes cost-risk tradeoffs. For many years, utilities have used some form of a business case to analyze and review projects before they receive funding. However, for most participants, this approach has become too much of a just go through the motions exercise. To be effective, the business case approach needs to become much more robust and useful to the engineers putting the cases together and to the senior management team needing to make the difficult capital allocation decisions.

Download the G&T business cases white paper

Taking a Hard Look at Capital Spending. What are You Trying to Accomplish? (white paper)

Utility sales have historically grown at a fairly consistent rate of 1.5-2.5% per year. In the last year, however, sales have flattened out or declined due to the economic slump and/or energy efficiency measures. In addition, as capital markets have become more skittish, it has become more difficult to secure financing of new debt due to a smaller pool of available capital. This sales slump and credit crunch have tightened cash flows and prompted utilities to take a hard look at capital projects to make sure they are making the most efficient use of their investment dollars.

Download the capital spending white paper

Energy Efficiency Program Management and Reporting Systems (white paper)

Running a portfolio of energy efficiency programs is a data intensive business. Baseline and replacement technologies, measure lives, deemed savings, budgets, program and cost effectiveness tests results: these represent a small sample of the energy efficiency business information. The users of this information are diverse and support a wide range of processes, including program management, regulatory reporting and customer relationship management.

Having accurate, timely and accessible data is critical to running an energy efficiency portfolio. However, MCR’s research suggests there is no standard set of data management strategies or software systems to manage this important business information. Instead, a wide range of incomplete solutions are being used across the industry.

Download the EE business management systems white paper