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Updating FRST™ with new regulatory strategy capabilities

Background

MCR’s client is an IOU that had implemented a version of MCR’s Financial and Regulatory Strategy Tool (FRST™) that focused on short-term earnings forecasting. The initial implementation was based on the Regulatory group providing all aspects of information for future rate cases. The resulting process worked in an environment with few rate cases; but after time, the utility began seeing more frequent rate cases and had a need to better link financial forecasting and regulatory planning.

Solution

MCR worked with the client to incorporate our regulatory planning logic into a refreshed version of FRST™. The new model provided a detailed regulatory panel, so the analyst had greater flexibility to define all needed inputs for determining potential rate changes. These changes included flexible test years, options for building ratebase and adjustments to revenue, expense and ratebase. Through FRST™’s import and mapping modules, the new model uploads data from the Regulatory group on current ratebase and develops the revenue requirement instantaneously.

Results

With FRST™’s flexible architecture, the new regulatory logic was easily incorporated into the model while preserving all the unique functions that were customized for the original model implementation. The analyst now quickly identifies issues related to future rates and works with the Regulatory group on strategies to address them.