Case Study:

Review of Transmission Upgrade Policies

Confidential Client | 2024

Atrium Economics was engaged by a leading Canadian utility to modernize its transmission connection procedures to better align capital contribution policies with contemporary risk and growth dynamics.

With electrification and industrial expansion driving unprecedented demand for high-voltage interconnections, the utility sought to ensure its Transmission Connection Procedures reflected both evolving customer risk profiles and industry best practices. Atrium conducted a comprehensive benchmarking study of North American utilities, evaluating how peers assess customer creditworthiness, structure economic evaluation periods, and allocate costs for large-scale system upgrades. The resulting insights provided a clear, evidence-based path to improve fairness, transparency, and alignment between risk and recovery.

CHALLENGE

Existing contribution methodologies did not fully account for differences in customer risk or changing project dynamics, prompting the utility to explore more equitable, risk-sensitive frameworks for cost recovery.

EXPERTISE

Atrium combined industry benchmarking with deep technical analysis—examining credit assessment models (Altman Z, Kaplan-Urwitz), evaluation horizons, and true-up mechanisms—to identify best practices adaptable to the Canadian regulatory context.

OUTCOME

The project informed proposed revisions to the utility’s Transmission Connection Procedures, introducing a more transparent and defensible approach that scales contribution requirements to customer risk while protecting existing ratepayers.

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