MCR has become more than just a consultant; they’ve become a partner in our operation.
—General Manager, Municipal Utility

Transmission Strategy

MCR does consulting work in various regional transmission organizations (“RTOs”), including MISO, SPP, PJM, CAISO and NYISO. Our clients—G&T cooperatives, municipals, joint action agencies, public power districts and independent transmission developers—have a goal of optimizing the value of their current and future investments in electric transmission. We help them realize the full revenue potential from their transmission assets.

Through our consulting assignments, we have created millions of dollars in value for our clients and broken new regulatory ground for our client base with landmark decisions in FERC rulings.

Key Staff

Jim Pardikes, Vice President

Jim Pardikes is a Vice President at MCR and leads the Transmission Strategy Practice. He has 34 years of experience consulting to the utility industry. His expertise includes providing expert testimony for Section 205 and incentive filings, including cost of capital for public power and cooperatives. Jim regularly presents to Boards and senior teams and has written extensively on transmission topics, such as the drivers of transmission investments and the case for transmission incentives.


Ron Kennedy, Director

Ron Kennedy is a Director with MCR. He has 19 years of experience in consulting to the utility industry. His expertise includes transmission formula rates, Section 205 rate changes, transmission rate incentives, economic evaluation of RTO membership and financial evaluation of transmission projects. Ron is experienced in presenting to executive teams and Boards of Directors.


Chris Nagle, Lead Consultant

Chris Nagle is a Lead Consultant with MCR. He has 13 years of experience in transmission, rates and regulatory affairs. His MCR expertise includes conducting reviews of existing formula rates, developing new formula rates and evaluating economics of transmission projects. His previous experience includes rate development and cost allocation for a multi-jurisdictional electric utility, including testifying as an expert witness before various public service commissions.


What we Do Learn morearrow

  • Transmission Formula Rate Analysis
    • Formula rate review for existing transmission owners
    • Development of ATRR for new transmission owners
    • Review/Challenge to incumbent formula rate costs
    • Staff education workshops on formula rates
  • FERC Filings
    • Section 205 rate filings and testimony
    • Transmission incentive rate filings and testimony
    • Cost of capital expert testimony
    • Intervention and settlement support
  • Strategic Economic Analysis
    • Development of transmission business plans
    • Economic evaluation of new transmission projects
    • RTO membership evaluations
    • Analysis of joint zone investment and 7-factor tests
    • Analysis of the potential purchase or sale of assets
  • Transmission Cost/Rate Competitiveness
    • Peer cost comparison by FERC account
    • Rate strategy and transmission revenue forecasting
    • Transmission capital investment and metric comparisons

Client Stories

Developing cost of capital expert testimony for joint action agency

A joint action agency formed a Transco in order to own transmission assets it had acquired from its members. As part of establishing the company, the Transco faced a number of contentious issues in its associated Section 205 FERC rate filing to establish its transmission formula rate. The Transco engaged MCR to provide expert testimony on one of the most critical issues in the filing: determining the appropriate level of cost of capital.

Conducting a comparative capital investment analysis

An independent transmission developer was filing comments at FERC to a Notice of Inquiry (“NOI”) to support transmission incentives. The independent transmission developer engaged MCR to support two specific return on equity (“ROE”) incentives: the continuance of an existing Transco ROE adder and the introduction of a new ROE adder to encourage joint investment with public power and cooperatives.

Conducting a review of the transmission formula rate and developing a transmission revenue forecast

A transmission-owning municipal electric utility in MISO was significantly upgrading its existing transmission assets while moving from point-to-point service to network integrated transmission service (“NITS”). Because of this, the municipal wanted to ensure the upgraded assets obtained full revenue recovery in the MISO Attachment O formula rate to help offset their upcoming NITS costs.

Conducting an economic evaluation of an RTO membership

A municipal utility recently expanded its transmission system and expected continued significant transmission investment for the next several years. The client was interested in whether it made economic sense to place its transmission assets and generation into MISO and take network integrated transmission service (“NITS”) as a MISO transmission owner (“TO”).

Conducting a review of a transmission formula rate

A municipal electric utility, which is an existing transmission-owning utility in MISO, wanted to ensure that its transmission-related costs were being properly recorded in the MISO Attachment O cost template and that they were optimizing their annual transmission revenue requirement (“ATRR”), consistent with the tariff.

Conducting a review of the transmission formula rate of neighboring IOU

A joint action agency was faced with an unusually large transmission true-up charge and was concerned the neighboring IOU made a significant analytical error.

Analyzing the rate impact of joining an RTO

A G&T was interested in exploring the possibility of joining a major RTO in its region. The G&T wanted to know which of its transmission-related costs would typically be included in the RTO transmission rate and how the RTO rate compared to the current transmission rate paid by their members.

Conducting a review of the transmission formula rate of a nearby incumbent IOU

A municipal utility was faced with rapidly rising transmission rates from the neighboring incumbent IOU transmission owner. It had been many years since the municipal conducted an in-depth review of the IOU’s transmission costs. The municipal engaged MCR to review the IOU’s transmission formula rate template to ensure the costs were accurate.

Developing a Section 205 rate filing to change the formula rate template

A joint action agency was faced with an under recovery of its transmission-related costs because the standard transmission formula rate was not appropriate for its particular business situation. The joint action agency requested MCR’s assistance to help increase recovery of these costs.

Providing analysis and negotiation support for a municipal utility

A municipal utility asked MCR to help determine whether it should be entitled to build a substation based on a desire to be neutrally invested within its pricing zone and to assist with negotiations with the incumbent utility.

Providing cost of capital expert testimony for a joint action agency

A joint action agency requested MCR to provide an analysis to determine a recommended ROE and support the recommended ROE with related expert testimony in anticipation of making a Section 205 rate filing at FERC.

Developing a transmission business plan for a G&T Client

A G&T asked MCR to lead an effort to develop a transmission business plan that articulated a clear vision and identified transmission investment opportunities that would enhance the reliability of cooperative members while also providing revenue that could partially hedge rising transmission rates.

Providing economic analysis of a proposed new transmission investment for a G&T cooperative

A generation and transmission (G&T) cooperative was investment in a highly visible regional transmission project that had complicated cost allocation methods. The client asked MCR to lead the client’s working team in conducting an analysis of the economics of the project and whether there was sufficient value for its members.

Developing a transmission formula rate template for a joint action agency

MCR conducted a quantitative analysis before a joint action agency decided to invest in two major new transmission projects.

Developing transmission rate incentive filings at FERC for a joint action agency

A joint action agency decided to invest in a major new transmission project with other surrounding utilities. MCR assisted with filings to receive transmission rate incentives for the project.

Quantifying economic benefits of joining an RTO as a transmission owner for a municipal utility

A municipal utility client was contemplating membership as a transmission owner in a Regional Transmission Organization (RTO) and asked MCR to provide an independent cost-benefit analysis.

Conducting a transmission formula rate review and education of client staff for a joint action agency

A long time transmission owner in an RTO wanted to ensure that its transmission costs were properly recorded and documented and that its transmission revenue was being optimized when faced with changing RTO formula rate protocols.

Insights

Key Staff

Jim Pardikes, Vice President

Jim Pardikes is a Vice President at MCR and leads the Transmission Strategy Practice. He has 34 years of experience consulting to the utility industry. His expertise includes providing expert testimony for Section 205 and incentive filings, including cost of capital for public power and cooperatives. Jim regularly presents to Boards and senior teams and has written extensively on transmission topics, such as the drivers of transmission investments and the case for transmission incentives.


Ron Kennedy, Director

Ron Kennedy is a Director with MCR. He has 19 years of experience in consulting to the utility industry. His expertise includes transmission formula rates, Section 205 rate changes, transmission rate incentives, economic evaluation of RTO membership and financial evaluation of transmission projects. Ron is experienced in presenting to executive teams and Boards of Directors.


Chris Nagle, Lead Consultant

Chris Nagle is a Lead Consultant with MCR. He has 13 years of experience in transmission, rates and regulatory affairs. His MCR expertise includes conducting reviews of existing formula rates, developing new formula rates and evaluating economics of transmission projects. His previous experience includes rate development and cost allocation for a multi-jurisdictional electric utility, including testifying as an expert witness before various public service commissions.