Utility Cost Management
Utilities today face a pair of competing priorities: Capital investment is urgently needed to provide safe and reliable service and keep pace with significant demand growth, yet bill affordability concerns are driving blowback in the regulatory and political arenas. A similar conundrum half a century ago found many utilities facing serious financial distress.
Challenges like these are often met with short-term fixes, such as across-the-board capital and operating budget cuts, but those are almost certain to create new problems down the road. A better approach involves holistic cost management, informed by risk and aligned with a utility’s strategic priorities.
As a trusted consultant to the nuclear power and utilities industry, MCR has developed a suite of highly effective cost management solutions which prioritize safe, efficient, and reliable operation while preserving profitability—offsetting the need for increased revenue and maximizing return on capital.
Key Staff
Tim Schlimpert, Vice President
Tim is a Vice President at MCR and leads the Utility Cost Management practice. He has more than 30 years of utility industry experience in power plant operations, maintenance, work control, business operations, process improvement, and technology solutions, and he has achieved significant performance improvements for his clients. Tim provides the often-elusive connection between corporate strategy, long-range planning/budgeting, work management, and technology through industry-leading life cycle management practices.
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Sam Brothwell, Vice President
Sam is Vice President of MCR’s Strategic and Financial Advisory practice. His background includes a decade in utility industry corporate planning and investor relations, 15 years on Wall Street as a senior equity and credit financial analyst, and nearly a decade as a utility and pipeline investor. His background includes electricity, natural gas, and renewable energy. Sam has worked extensively with federal and state policymakers as well as non-governmental organizations involved in the energy and utility sectors, and he has spoken at numerous industry conferences and investment forums.
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What we Do Learn more
- Risk-informed zero-base budgeting
- Process improvement
- Coal plant retirement financial analysis
- Capital portfolio optimization
- Capitalization policies and procedures
- Capital project evaluation
- Life cycle management planning
- Long-range planning
- Management reporting
- Staffing optimization
- Implementation of the Copperleaf Suite of asset optimization
tools
Client Stories
A Large Integrated Utility Achieves Cost Reduction Through Risk-Informed Budgeting
A large integrated utility in the Southwest was challenged to limit electric rate increases to 2% per year and to further keep electric bills in the bottom 50% of all electric utilities in the state. With significant O&M cost reduction as the goal, the chief operating officer approached MCR for help. MCR identified a total of $15 million in O&M savings opportunities, enabling the client to meet its affordability goals.
A Top 10 Integrated Utility Achieves Cost Reduction Through Risk-Informed Budgeting
A utility sought a sustainable methodology to provide visibility into cost drivers, incorporate risk valuation, maximize the value of each budget dollar, and help management ensure credible budget targets for the future. MCR’s extensive risk-informed budgeting experience helped the client identify $99 million in O&M savings opportunities and meet its cost targets.
Updating a Unit of Property Catalog for a Large Utility
MCR partnered with a large utility to modernize its unit of property catalog amid complex accounting of aging asset replacements. MCR successfully reduced catalog complexity, improved capitalization flexibility, and identified an annual shift of about $40 million from O&M to capital spending.
Planning a Coal Plant Decommissioning, Demolition, and Site Remediation
A large generation owner engaged MCR to develop a defensible financial forecast to retire a multi-unit coal-fired plant. MCR integrated unit retirement timing, an updated five-year O&M budget, new demolition estimates, and environmental remediation strategies into a financial plan to support decision making and ARO accounting. MCR’s work provided the client a clear road map for decommissioning, demolition, and site remediation with quantified cost and risk trade-offs.
Key Staff
Tim Schlimpert, Vice President
Tim is a Vice President at MCR and leads the Utility Cost Management practice. He has more than 30 years of utility industry experience in power plant operations, maintenance, work control, business operations, process improvement, and technology solutions, and he has achieved significant performance improvements for his clients. Tim provides the often-elusive connection between corporate strategy, long-range planning/budgeting, work management, and technology through industry-leading life cycle management practices.
Visit Profile
Sam Brothwell, Vice President
Sam is Vice President of MCR’s Strategic and Financial Advisory practice. His background includes a decade in utility industry corporate planning and investor relations, 15 years on Wall Street as a senior equity and credit financial analyst, and nearly a decade as a utility and pipeline investor. His background includes electricity, natural gas, and renewable energy. Sam has worked extensively with federal and state policymakers as well as non-governmental organizations involved in the energy and utility sectors, and he has spoken at numerous industry conferences and investment forums.
Visit Profile