Case Study: a medium sized electric utility company achieves improved cost sharing with Mather Economics

Medium Sized Electric Utility Company - Customer Case Study

Mather Economics worked with a medium sized electric utility company that needed a better way to share costs among its member power cooperatives. As deregulation and open-market power purchases and sales changed the business, the company needed to update its cooperative billing methodology and cost-allocation algorithms.

Mather Economics developed several cost-sharing alternatives and tested them with Monte Carlo simulations of the power market, then used the chosen method to reallocate costs among members and compare the results with the prior approach. The client adopted the new methodology and used it to reassign costs from prior quarters that had been distorted by unforeseen market changes, improving the fairness and accuracy of cost sharing.