Atrium Economics’ senior energy industry professionals rely on their wide-ranging industry knowledge and experience to deliver practical, measurable improvements to impower value creation across the regulated utility and unregulated enterprises. We approach each management challenge and regulatory issue with objective, independent, and principled advice.
Financial and Cost Performance Benchmarking
Atrium professionals performed a series of benchmark analyses to compare each of the client’s operations and administrative expense metrics for the client’s natural gas and electric operations to various peer groups. Analyses were performed for natural gas, electric and combination utilities. The analyses were prepared to make the peer group of utilities most comparable to the characteristics of the client’s utility operations. The engagement included expert testimony before the jurisdictional utility commission, which concluded that our client’s expenses, as demonstrated by its comparative performance under the analyses, were reasonable.
Management Audit Support
An Atrium senior professional provided audit support for one of the company’s gas and electric utilities during a management audit ordered by one of its two jurisdictional utility commissions. A pre-audit was conducted of the distribution operations and resource planning processes to provide the client with potential audit issues. The client was assisted throughout the audit process in responding to information requests, preparing company executives and management personnel for audit interviews, and management of preliminary audit issues and findings by the independent audit firm. The audit firm’s final recommendations were constructive, forward-looking and non-punitive.
Affiliate Relationship Review – Shared Services
(John Taylor to write)
Asset Planning, Evaluation, Prioritization and Selection
An Atrium senior professional conducted a review of the client’s electric transmission planning and project prioritization process. The emphasis of the review was to determine if the process implemented by the client could be expected to meet the regulatory standard of prudence, as adopted by the jurisdictional utility commission. The prudence standard adopted by the commission in several recent regulatory proceedings was reviewed, supplemented by our knowledge of the prudence standards adopted at a national level and in other states. The engagement included two phases: 1) an initial situation assessment of the existing process employed by the client, and 2) a review of the historic implementation of that process by reviewing a sampling of transmission projects. Examples of capital planning documents and procedures were compiled, which were viewed as “best practices” from other electric utilities and relevant transmission entities. A new standard set of project documentation was adopted by the client to be implemented across its four geographic planning regions.
Project Management Assessment
An Atrium senior professional was engaged to perform a review of the client’s project management (PM) and capital spending authorization processes (CSA). The overall project objectives were to educate PM staff as to the importance and relevance of regulatory prudence standards, evaluate existing PM processes along with newly introduced corporate CSA processes, and propose PM and corporate process and documentation efficiencies. This task was accomplished through 1) a situational assessment and risk review; 2) analysis of project management practices; and 3) development of common documentation for the PM and CSA processes.
Independent Consultant’s Enterprise Review
An Atrium senior professional was engaged to provide an independent consultant’s report to be included as an appendix to the official statement prepared in connection with the issuance of the Municipal Utility’s Revenue Bonds. The evaluation of the natural gas utility system included a discussion of organization, management, and staffing; system service area; supply facilities; distribution facilities; and the utility’s Capital Improvement Plan (CIP). The report also contained: (a) financial feasibility information, including analyses of gas rates and rate methodology; (b) projection of future operation and maintenance expenses; (c) CIP financing plans; (d) projection of revenue requirements as a determinant of future revenues; (e) an assessment of the utility’s ability to satisfy the covenants in the Utility Revenue Bond Ordinance authorizing the issuance of the Bonds; and (f) information regarding potential liquefied natural gas expansion opportunities.