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MCR Transmission Strategy Services (brochure)

MCR helps G&T cooperatives, municipals, public power districts and joint action agencies in SPP and MISO realize the full revenue potential from their transmission assets. We use a collaborative approach for all our transmission engagements with the goal of finding and generating value for our clients. Download our brochure to learn more about the services that add value to our clients.

Download the MCR Transmission Services Brochure

The Seven Potential Threats to the Transmission Business. Is Transmission in MISO Still a Solid Business? (white paper)

Over the past decade, the transmission business has been lucrative for most transmission owners in MISO. Transmission investment has been a driver of earnings growth for investor-owned utilities (“IOUs”) and transmission companies (“Transcos”), while providing high returns for public power and cooperatives. On the horizon, however, there are a number of potential threats to the transmission business and to transmission owners’ ability to sustain high levels of new investment. MCR believes that although some of these threats may eventually have an increasing impact on future investment opportunities, there are factors that mitigate these threats. Transmission will continue to be a strong business in MISO through at least the mid-2020s.

Download the Threats to Transmission Business white paper

MCR’s Review of Incumbent IOU Transmission Formula Rates (brochure)

Transmission rates in most zones in MISO and SPP have risen significantly and are becoming a larger portion of your customers’ total bills. In response to the higher rates, many of MCR’s public power and cooperative clients have asked MCR to conduct a review of the transmission formula rate of the incumbent IOU or Transco in their zone. This review identifies any mistakes in the incumbent’s formula rate (MISO Attachment O and SPP Attachment H) and provides peace of mind that the IOU/Transco’s transmission costs ultimately are accurate and warranted.

Download the Incumbent Review brochure to learn more about this service for public power and cooperative utilities.

No End in Sight: Can Transmission Investment in MISO Continue at this Pace? (white paper)

There are many factors driving transmission investment. Just when one factor seems to run its course, another reason for investing in transmission takes over. In MISO, the growth rate of transmission investing over the last year has slowed a bit, but the absolute levels of investment will remain high for at least the next several years as investor-owned utilities (“IOUs”) and transmission companies (“Transcos”) continue to see transmission investment as a major driver of earnings. Although transmission investment is broadening somewhat to more generation and transmission cooperatives (“G&Ts”) and municipal utilities, the message for public power and cooperatives in MISO remains clear: Investing in transmission is the most effective way to counter rising transmission rates.

Download the MISO Investment white paper

Transmission Spending in PJM: Are You Obtaining Your Share of Transmission Investment? (white paper)

In PJM, total transmission investment by investor-owned utilities (“IOUs”) and transmission companies (“Transcos”) continues at high levels and is driving earnings. The factors encouraging investment show little sign of abating, ultimately leading to higher transmission rates. Many generation and transmission cooperatives (“G&Ts”) and public power entities are facing higher transmission rates from this substantial investment. Obtaining their own fair share of transmission investment can provide a means to mitigate the impacts of transmission rate increases and provide value to their members.

Download the PJM Transmission Investment white paper

Transmission Investing in SPP: Are You Obtaining Your Share of Transmission Investment? (white paper)

In SPP, total transmission investment continues at high levels and is being driven by many factors. However, recent investment by investor-owned utilities (“IOUs”) has been dominated by two IOUs. Many generation and transmission cooperatives (“G&Ts”) in SPP have recently stepped up their investment activity and some are now investing in transmission at a rate equivalent to their load ratio share, providing a means to mitigate the impacts of transmission rate increases and provide value to their members.

Download the SPP Transmission Investment white paper

The New Tax Law: Will a Lower Tax Rate for IOUs Impact the Advantage Public Power and Cooperatives Have in Transmission Investing? (point of view)

The new tax law reduces the income tax rate for IOUs. What does that mean for public power and cooperatives when it comes to transmission investing? The enclosed MCR Point of View discusses the impact of the tax rate reduction on transmission investing and whether it will affect the relative cost competitiveness of public power and cooperatives compared to IOUs.

Download the tax law point of view

MCR Formula Rate Review (brochure)

MCR’s Formula Rate Review is beneficial in a number of ways. It ensures you are:

  • Optimizing your ATRR in MISO’s Attachment O/SPP’s Attachment H cost template
  • Able to withstand challenges from outside parties
  • Can fully meet FERC and MISO protocol requirements

MCR has developed or reviewed over 100 formula rates for clients in SPP, MISO and PJM. Through this extensive experience, MCR has developed a Formula Rate Review to assess whether transmission revenue is being left on the table and whether your transmission-related costs are “bulletproof” against third-party scrutiny.

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MISO’s New Cost Allocation Process: How will Public Power and Cooperatives Fare? (white paper)

MISO transmission owners are currently developing new criteria and cost allocation methods for market efficiency projects. The new criteria could include lowering the voltage level threshold from the current 345 kV to a lower level, which would increase the number of transmission projects open to competitive bidding. However, this may exacerbate the existing problem of underinvestment by public power and G&Ts in MISO. Thus, public power, G&Ts and T&D cooperatives need to be aggressive and propose creative solutions they can own to partially offset increasing transmission tariffs in their local pricing zones.

Download the cost allocation paper

The Transmission Arms Race Continues: Are You Obtaining Your Share of Transmission Investment (white paper)

The “arms race” for transmission investments continues. In addition to investor-owned utilities (“IOUs”) and transmission companies (“Transcos”), generation and transmission cooperatives (“G&Ts”) and public power in MISO are increasing their levels of investment. But in many cases, G&Ts and public power make transmission investments at a disproportionally lower percentage than their load ratio share. This mismatch results in substantial exposure to transmission rate increases for their members and customers. In order to mitigate the impacts of these transmission rate increases, public power and cooperatives need to focus on how transmission investing can create value for their members.

Download the Transmission Arms Race white paper

Running Transmission as a Business: How G&Ts Can Participate in Today’s Transmission Arms Race (white paper)

There has been an “arms race” for transmission investments among investor-owned utilities (“IOU”) and transmission companies (“Transcos”), resulting in substantial increases in transmission rates for all MISO pricing zones. By contrast, many generation and transmission (“G&T”) cooperatives have not increased their transmission investment at the same rate of growth, resulting in substantial exposure to transmission rate increases for their cooperative members. In order to mitigate these rate increases, a G&T needs to run transmission as a business and put in place a business plan and disciplines that focus on creating value for its members.

Download the Running Transmission as a Business white paper

Are You Leaving Transmission Revenue on the Table? A New Form of Migration–Changing from a Stated Transmission Rate to a Formula Rate in SPP (white paper)

Of the 13 new public power and Generation & Transmission (“G&T”) transmission owners entering the Southwest Power Pool (“SPP”) in the Upper Missouri Zone effective October, 2015, all 13 have filed for recovery of their transmission costs using formula rates rather than stated rates. This is in sharp contrast to the condition previously where 13 out of the 18 public power and G&T transmission owners in SPP used a stated rate to recover their transmission costs under the SPP tariff. As these new entities have come to realize, formula rates provide a distinct advantage for transmission owners in SPP to recover their due costs as transmission costs rise. Put simply, if you are using stated rates, you may be leaving transmission revenue on the table.

Download the SPP migrating to a formula rate white paper

Watch Out Below for Falling Returns on Equity in MISO. Should Public Power and G&T Transmission Owners within MISO be Concerned? (white paper)

As interest rates remain at historically low levels, pressure is building on FERC to lower the returns on equity used in transmission rate formulae across the country. This pressure has come to a boiling point in MISO as industrial and commercial customers have filed a joint complaint challenging the reasonableness of ROEs, equity adders and the percentage of equity allowed in capital structures for IOUs and independent transmission companies. Based on precedent, any reduction in the standard MISO ROE will likely also apply to public power entities. Although a lower ROE will reduce revenue generated from transmission investments, it is likely that most public power entities in MISO will see a net benefit through lower transmission tariffs. That, combined with continued healthy margins from new transmission investment, will be an important strategy for joint action agencies, municipals and G&T. Understanding the dynamics of this potential new environment will be important for many public power entities.

Download the MISO falling returns white paper

Not Sure if Your Attachment O Filings are Compliant with MISO Protocols? (brochure)

In mid-2013, FERC handed down a ruling that required MISO transmission owners (TO) to file revised rate protocols. The new protocols required greater transparency for costs included in formula rates and opened TOs to deeper scrutiny from third parties. Download our brochure to learn more about these new protocols and how MCR assists our joint action agency, municipal and G&T clients to ensure their formula rate optimizes revenue and withstands the increased scrutiny of outside parties.

Download the MISO Attachment O brochure

MISO Rate Protocols: Time to Prepare for Detailed Inspection (hot topic)

As more transmission owners utilize formula rates for transmission cost recovery and transmission investment continues to increase, the impact of formula rates on ratepayers is increasingly significant. Additionally, state commissions have been vocal challengers to several transmission owner formula rate protocols, claiming the protocols are insufficient to ensure just and reasonable rates. In 2012, FERC initiated an investigation to determine whether the formula rate protocols under the MISO tariff were sufficient to ensure just and reasonable rates. This hot topic discusses areas related to formula rates which FERC is considering and what transmission owners should expect as a result of FERC’s increased scrutiny.

Download the MISO rate protocols hot topic

Cost Allocation for the Midwest ISO. ATRR Whac-a-Mole? (white paper)

Cost allocation of transmission investment costs continues to be a major obstacle to building large new transmission and achieving renewables generation goals in the Midwest ISO (MISO) region. Existing methods of cost allocation can result in disproportionate impacts on certain utilities in close proximity to new transmission, so new methods of cost allocation are being proposed. Like the carnival game of Whac-a-Mole, any particular cost allocation method that eases the annual transmission revenue requirement on some MISO regions or utilities will inevitably burden other MISO regions or utilities.

Download the MISO cost allocation white paper

Going on the Offensive to Counter Dramatic Increases in Transmission Rates: Transmission Investing for Public Power and G&T Utilities (white paper)

Transmission rates across the country and, particularly, in the Midwest Independent System Operator will be dramatically increasing over the next ten years due to new high voltage transmission projects and the steady stream of local transmission facility replacements and upgrades. Municipal joint action agencies, municipals and G&T transmission owners have the opportunity to mitigate or partially hedge these rate increases if they implement an offensive transmission investment strategy. This strategy involves thinking about transmission investment “as a business” and pursuing investments more aggressively than in the past.

Download the Public Power and G&T Utility Transmission Investing white paper

Pulling the Transmission Trigger: Evaluating MISO Transmission Ownership for Municipal Agencies and G&Ts (white paper)

Some public power utilities have not yet decided whether it makes economic sense to join the Midwest ISO (MISO) as a Transmission Owner. In most cases, these municipal agencies and generation and transmission cooperatives are already a Market Participant in the Day 2 energy market, but they have not yet turned over functional control of their transmission assets to MISO and become a Transmission Owner. Expiring grandfathered agreements and a desire to maximize full recovery of future transmission investments are now triggering municipal agencies and generation and transmission cooperatives to consider becoming a transmission owner in MISO. Evaluating whether to become a MISO Transmission Owner is a major strategic decision dealing with multifaceted issues requiring complex analysis. Deciding whether and when to pull the MISO transmission trigger can result in saving hundreds of thousands or potentially millions of dollars.

Download the MISO Transmission Ownership Evaluation white paper