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ERG was recently retained by a large western U.S. mining concern to provide litigation support and expert testimony in state public service commission and federal district court cases concerning issues related to financial losses suffered by the mine resulting from the supplying investor-owned utility’s electric transmission operation and maintenance practices, power quality issues and reliability issues.
ERG was recently retained by a large western U.S. mining concern to provide litigation support and expert testimony in state public service commission and federal district court cases concerning issues related to financial losses suffered by the mine resulting from the supplying investor-owned utility’s electric transmission operation and maintenance practices, power quality issues and reliability issues.
ERG was recently retained by a major international steel producer to investigate the existence of significant power quality issues being alleged by the electric utility serving the mill. These issues resulted from the catastrophic failure of the mill’s static var system(SVC). ERG is analyzing the extent to which the mill is producing harmonic voltages and currents with reduced SVC operation, in comparison to allowable limits under applicable U.S. and international standards. In addition, ERG is analyzing the potential for problems which could occur at the utility’s nearby generating station, as a result of harmonic distortion reflected into the transmission system. ERG anticipates sponsoring expert testimony in a proceeding at the state public utilities commission regarding a proposed special tariff which was recently filed for service to the mill.
ERG has been providing consulting support to the City of Tacoma, Washington, as an intervener in this docket, which was initiated by the Federal Energy Regulatory Commission (“FERC”) to investigate whether the respondents engaged in any electricity trading practices designed to manipulate the western electric market in 2000 - 2001. Expert testimony was sponsored by ERG Executive Consultant Philip Movish on behalf of Tacoma which, amongst other things, alleged that Avista traders had knowledge of their participation in improper trading activities. On June 25, 2005, FERC Chief Administrative Law Judge Curtis Wagner, issued an ORDER OF CHIEF JUDGE DENYING REQUEST TO CERTIFY CONTESTED SETTLEMENT, REINSTATE HEARING PROCEDURES, AND RULING ON MOTION TO COMPEL DISCOVERY. Specifically, the Chief Judge, after a thorough review of the evidence in the docket concurred that “The examples set forth in Mr. Movish’s affidavit presents a clear demonstration on genuine unresolved issues of material fact. The examples set forth by Mr. Movish tend to indicate that Avista Utilities and Avista Energy traders understood and knew what they were doing.” ERG continues to provide consulting and expert testimony support to Tacoma in this and other ongoing regulatory proceedings before the FERC which are investigating Enron trading strategies and manipulation of the western electric market in 2000 - 2001.
ERG was
recently retained by a major ERG was retained to perform physical inspections of the project equipment and construction sites; conduct due diligence interviews with project development, construction, and plant operating staff; review project design documents and contracts; review proposed preventative maintenance programs; and perform Fair Market Value and Distress Value appraisals of the two projects. When completed, these units will deliver power under contract to Empresa Nacional de Energia Electrica ("ENEE") the national electric utility. The two installations consist of thirteen units totaling approximately 138 MW of capacity. Due to the asset-based structure of the financing, the bank was concerned regarding the allocation and use of common facilities and the ability of the local operations and maintenance staff to keep the equipment in good operating condition. ERG's
assessments enabled the bank to address its concerns in support
of proceeding with the time sensitive asset-based financing
of both projects. In addition, while on-site, ERG personnel
provided advice and While in Honduras for this engagement, ERG staff encountered the extensive devastation caused by Hurricane Mitch in October 1998. Though, recovery efforts are well underway, there is still much more work needed to reestablish the country's infrastructure. When completed, the power plants reviewed by ERG will be major contributors toward the economic recovery of Honduras. ERG recently completed a power supply study performed for a joint action agency consisting of 18 municipal utilities located in the Southeastern U.S. The study assessed the viability of repowering aging gas-fired conventional boilers at 6 municipal power facilities, and compared potential combined-cycle repowering opportunities, with new greenfield power plant development, and merchant power offers.
Seventeen units at six sites were identified as candidates for repowering; the units ranged in size from a low of 5 MW to a high of 41 MW, and in age from 27 years to 40 years. As part of the analysis, ERG staff visited and reviewed the selected facilities, assessed the candidate equipment, and developed estimated cost and performance parameters for each of the repowering options. In addition to assessing the technical feasibility of the repowering options, and in order to compare the repowering opportunities with competing alternatives, ERG performed a system wide economic analysis. The analysis involved forecasting member utilities loads and fuel prices, and forecasting the availability of, and prices for wholesale market power. As part of the study, the utilities= existing generating system was modeled for comparison to potential supply-side options. Total production costs for the system were developed and compared under various operating and capacity expansion scenarios through the year 2020. Study results are being used by the agency in support of its future supply decision making in a time where the market is fraught with regulatory and fuel price uncertainty and hampered by the financial downgrading of large power producers as a result of the collapse of Enron and the deregulated energy market debacle in California.
ERG recently completed a feasibility study which investigated the development of a potable water supply system for a group of Native American clients located in the Southwestern U.S. ERG’s study was accomplished to investigate the following: (i) alternative engineering designs for water production, storage and distribution facilities; (ii) project cost estimation, (iii) an assessment of projected rates of return on investment; (iv) alternative project financing methods and potential sources of capital necessary to fund the project; (v) discounted cash flow financial modeling, and (vi) development of a proposed contractual agreement between the parties for development of the project. Several significant issues facing water supply systems in dry and arid areas of the country, such as scarcity of water sources, rapid growth associated with increase in population, and other unique local characteristics were considered in ERG’s analyses. ERG provided valuable expertise in performing an assessment of project financing options. Although cash investment was possible, ERG determined that project funding via issuance of the revenue bonds would benefit the project, given the relative risks of developing a new water production system, and in support of maintaining the project’s revenue stability. ERG prepared twelve project development and funding scenarios for several wholesale and retail system alternatives, which considered alternative system sizing, water source availability, variable municipal bond yields, and the prospect of potential system growth. ERG was also intimately involved in developing a draft contractual agreement between the participants in the project. Based upon
ERG’s study results, preliminary project development activities
have commenced.
In recent years, prices in U.S. natural gas markets have shown significant volatility which have resulted in great fluctuations in monthly natural gas bills of retail distribution system customers. ERG was recently retained by a Southeastern Retail Regulatory Commission to investigate the feasibility of alternative purchase gas adjustment mechanism designs for utilities in their jurisdiction. ERG investigated adjustment methodologies which are commonly in use around the country to determine if any one mechanism above others is preferred by regulators to dampen the affect of natural gas price volatility to retail end-use customers. As part of this engagement, ERG reviewed what factors directly or indirectly affected the price of natural gas. Such factors included but were not limited to: (i) weather and end-user consumption patterns; (ii) gas procurement procedures and resulting gas supply contract structures; (iii) use of financial hedging, futures, swaps, and options; (iv) gas storage availability/utilization; (v) pipeline capacity conditions; and (vi) natural gas costs and demand projections. In order to meet the regulator’s objective of minimizing the impact of volatile natural gas prices on monthly retail natural gas bills, ERG proposed that a twelve-month rolling average methodology, as an alternative to the utilities existing purchased gas adjustment clauses be taken into consideration. In addition, ERG also recommended utilities should investigate ways to minimize their exposure to extreme natural gas price fluctuations by segmenting portions of their gas supply portfolio with spot market purchases, short/long term contracts, hedging instruments and more efficient operation of available gas storage services. ERG continues to monitor the effect of its recommendations upon monthly natural gas bills on behalf of the regulator.
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international
bank to perform appraisals and site inspections of two Central
American power plant expansion projects. The two projects,
which the bank was considering, involved the installation
of additional low speed diesel engine generating units and
associated auxiliary equipment at two existing sites in Northeastern
and Southwestern Honduras. 
counsel
to project staff regarding further development of the projects
and future operation and maintenance considerations. 