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Enhancing a distribution cooperative’s financial forecasting capabilities with FRST


“MCR was able to automate feeds of data coming from different supporting parts of the organization. They included rating reports based on their knowledge of recent releases and updates of Moody’s, S&P and Fitch ratings criteria. I use the FRST™ model on a monthly basis to give updates to our executive management and to our Board of Directors.”

—Dede Jones, Chief Financial Officer, IREA


Background

Intermountain Rural Electric Association began implementing a series of projects to improve their internal processes for forecasting, planning and budgeting. A key area of concern was having robust capabilities to develop a financial forecast. The existing financial forecast was conducted once a year on a home-grown spreadsheet that posed significant challenges.

IREA engaged MCR to implement the Financial, Regulatory and Strategy Tool (FRST™) to become a primary tool for monthly forecasting and annual planning.

Solution

Key to the success of the project was the development of a solution that seamlessly combined various analyses and forecasts across the organization and leveraged existing tools. A unique challenge for IREA was combining details from their power provider with information on their jointly owned resource. The incoming data from their partner provided information on purchases, sales and all forecasts related to the unit, including capital spending and O&M.

FRST™ took direct feeds from key supporting forecasts, including the budget system, debt datasets, information from power supply and the capital budget. The model was primarily driven by the uploaded data allowing the user to focus on key drivers and analysis rather than cutting and pasting data. Sophisticated error checking helped quickly identify key changes in the model that might affect the outcome of the plan

Results

The new model was implemented in a rapid manner and immediately began to support IREA’s analysis of its current financial situation and to make critical decisions related to the Cooperative’s current strategies.