Energy & Utilities

Mather Economics developed a financial projection model to estimate the future revenue and cost flows by commodity/geography based market. Financial projections incorporated competitive pricing pressures, Internet and bandwidth costs, technology adoption curves, and all other sources of cost and revenue for this global company. Detailed market analysis was completed in cooperation with leading research firms. Representing the model and projections to investment banking firms and documenting risks and assumptions was a critical component of the engagement’s success.

The Principals of Mather Economics have developed performance measures for an electric energy marketing and trading division. The effectiveness of the utilitys price forecasting for fuel and energy was assessed as were the services provided during due diligence analysis for generation asset acquisitions. Performance measures were developed that aligned the organization's strategic objectives with value creation and risk assumption. The project deliverables provided effective communication of marketing and trading performance to the senior management of the utility.

The Principals of Mather Economics have analyzed and proposed recommendations to improve cost sharing across member utilities for a large electric power cooperative. Deregulation in the electric power industry and open market purchases and sales of electric power required adjustments to the cooperative billing methodology and algorithms used to assign costs to the cooperative members.

The Principals of Mather Economics have assisted a Global Competitive Energy Company in the Southeast create a management-reporting tool that demonstrated the influence of changing market conditions on forecasted financial measures. The report combines forecasts of revenue and costs from multiple statistical models to provide estimates of gross margin by quarter for two years. The model provides confidence intervals around the expected gross margin that reflect the level of hedging adopted by the client. A continuous improvement plan was developed that identified how the reporting tool can be enhanced through analytical, technological, and procedural changes.

The Principals of Mather Economics have developed cash flow models for electrical power plants using forward power curves and physical network models to estimate valuations for generating assets. This work was completed for a Global Competitive Energy Company in the Midwest.

Deregulation of retail gas and electric power markets is beginning to reshape the traditional relationship between service providers and their clients. Understanding how to best structure service bundles and price these bundles effectively will be a requirement for profitable growth in the near future. Mather Economics can use sophisticated economic analysis to assist you with pricing and bundling decisions.