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.