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This paper presents a new theory that addresses the issue of passivity in macromodels of electrical interconnects constructed based on the method of characteristics (MoC). The proposed approach develops a new algebraic test to check for passivity in macromodels generated using MoC. The theory behind the developed test is based on deriving the necessary and sufficient conditions for the loss of positive-realness in the admittance matrix of the developed macromodel. An algorithmic procedure is proposed to verify passivity of general macromodels derived from the MoC. The results presented in this paper can be employed to test for positive-realness in dynamical systems described by algebraic delay-differential equations with discrete commensurate delays.