We provide economic analyses and consultation to regulators, public officials, and firms developing or implementing unbundling. We assist in the establishment of rules and institutions aimed at allowing new entrants to compete for business with vertically integrated utilities.
Our regulatory consulting work in finance and accounting addresses unbundling policies ranging from requirements for maintenance of separate accounts and mandated organizational separations to the forced breakup and divestiture of elements of the vertically integrated business.
In a number of assignments in the electric power industry, The Brattle Group has analyzed the configuration and effectiveness of proposed Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs). Our consultants have supported counsel in drafting transmission entities’ RTO filings, evaluated whether proposed RTOs satisfied the Federal Energy Regulatory Commission’s economic requirements, analyzed the policy implications of proposed changes in RTO membership, and assisted in refining a structural approach to inter-RTO coordination of various transmission functions.
The Brattle Group has worked to design and obtain regulatory approval of plans for utilities divesting output contracts so that they retain ownership but not control of generation assets. We have estimated and projected cost functions to track future marginal and total costs of units and analyzed financial risks the plant operator would bear from output pricing formulas. We also testified on the risks posed by this form of restructuring.
We have worked with numerous utilities to design regulatory strategies for the transition to retail electric access. These projects have included developing comprehensive business strategies and integrated planning tools for service unbundling and pricing, incentive ratemaking, corporate reorganization, market forecasting, asset valuation, and risk management.