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ERG was retained by the City of Aspen, Colorado to investigate the feasibility of the City’s acquisition of the electric assets and operations of the Holy Cross Electric Association (HCEA) that historically have provided electric service within certain portions of the City. In this regard, ERG staff developed a projection of future demand and energy for the City’s existing municipal electric system including potentially acquired customers. A valuatiion of HCEA’s electric system assets subject to acquisition by the City was performed. ERG staff also determined the costs and revenues associated with serving potentially acquired customers, as well as the economic/financial feasibility of the undertaking, and legal and regulatory aspects of the City’s proposed acquisition. A confidential report was prepared for the City Attorney concerning the analyses performed by ERG.
Members of ERG represented the City of Pueblo, Colorado (City) in Docket No.07A - 108EG before the Colorado Public Utilities Commission (CPUC), concerning the proposal of the Aquila Corporation (Aquila) to sell their retail electric and gas assets and operations to the Black Hills Corporation (BH). Historically, the City has been a retail electric service area of Aquila. Working with the City’s Special Counsel, member’s of ERG provided independent review and analysis of the economic and financial aspects of the proposed transfer, future power supply issues and costs, future operations costs, staffing issues, potential reliability issues, the overall cost of the proposed transaction to retail ratepayers, recovery of an acquisition premium, ring fencing issues, and the forward going cost of the BH’s acquisition upon retail rates. Two members of ERG sponsored expert testimony on these issues in the CPUC proceeding. In addition, members of ERG played a leadership role in negotiating the transfer of Aquila’s franchise with the City to BH.
For the City of Evanston, Illinois, Members of the Firm developed and presented a series of in-depth workshops for City Alderman, City Energy Commission members, and key City staff centered around an investigation into the full gamut of electric service options which might be afforded the City, its businesses and residents with the advent of emerging electric competition. In this regard, ERG staff presented workshops on the present state of the electric utility industry, electric franchise options, municipalization, retail open access issues, federal and state regulatory and legislative activities , competition, deregulation and restructuring issues.
The Cities of Floresville, Poth and Stockdale, Texas comprise the Floresville Electric Light & Power System (FELPS). Historically, Floresville has provided for all operations and maintenance. In conjunction with a decision by the Cities of Poth and Stockdale to sell their electric system assets to Floresville, members of the Firm prepared an independent valuation and appraisal of the transmission, substation and distribution assets to be transferred as a test of the reasonableness of the purchase and sale price agreed to by the three cities. An Appraisal Report was prepared which considered the value of the electric system assets to be transferred on an Original Cost Less Depreciation, Replacement Cost New, Replacement Cost New Less Depreciation and Going Concern bases.
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Members of ERG performed a study investigating the technical, economic and financial feasibility of the City of Montrose’s acquisition of the electric distribution assets and operations of the Delta-Montrose Electric Association located with the City limits. Upon completion of the study, ERG recommended that the City not proceed with any further acquisition activities owing to a lack of economic/financial feasibility.
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Members of the Firm provided assistance to the City of Enid, Oklahoma in evaluating its options concerning future electric service including development of a preliminary valuation of Oklahoma Gas & Electric’s (OG&E) local distribution and substation facilities in support of purchase negotiations. ERG staff developed several alternative models including the establishment of an open-access system to afford City electric consumers the ability to freely choose power suppliers, development of a traditional vertically integrated municipal utility, and several other variations. ERG staff also developed and presented a workshop for Council members regarding current trends in the electric industry relative to competition and deregulation at the local, state, and national levels. A report was prepared on the results of the investigations including an opinion as to the feasibility of proceeding with the development of a municipally-owned electric system. Members of the Firm provided assistance to the City in the conduct of a formal appraisal of OG&E’s facilities and to the City’s Special Washington, D.C. Counsel in the petitioning of the FERC for a stranded cost determination by OG&E.
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Members of the Firm assisted the City of Las Cruces, New Mexico, in investigating alternatives for electric supply to the City. In particular, members of the Firm performed a comprehensive feasibility study which investigated the City’s development of a duplicate electric system to provide service as a competitive supplier within the City. ERG’s services included: the development of demographic and economic profiles of the City to assist the City Council in its selection of those sub-areas to be served by the City's duplicate electric system; the development of a conceptual design of a new distribution system that could be built in a phased approach to achieve maximum load serving capability while maintaining the present electrical system reliability at the lowest capital cost per kilowatt; development of a comprehensive Competitive Request for Proposals from area utilities, independent power producers, cogenerators and renewable resource providers for a 15 year bulk power supply; and, development of comprehensive Competitive Request for Proposals for operations and maintenance services to the newly constructed electric system. In addition, members of the Firm provided assistance to the City in evaluating the availability and cost of long-term firm power supply and in evaluating the availability and cost of securing the services of an outside contractor to operate and maintain the electric distribution system. A preliminary resource plan and retail rate schedules were developed as part of the engagement.
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On behalf of the City of Las Cruces, New Mexico, expert testimony was sponsored by a member of the Firm before the FERC in two separate dockets concerning the Central & Southwest Corporation (CSW) - El Paso Electric Company Merger Proceedings. The testimony addressed transmission access, pricing and comparability issues. In particular, testimony centered around the proposed use of El Paso Electric’s HVDC Eddy County Tie by CSW post merger, which would severely limit Las Cruces’ ability to affect long term reliable power supply necessary to serve its electric system customers.
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Members of the Firm performed studies assessing the feasibility of the County acquiring certain water production assets and operations of the U.S. Department of Energy (USDOE) which historically have provided water supply for both the County and the Los Alamos National Laboratory. Major project tasks included: assessment of County staffing requirements and interface impacts upon existing County utility operations; development of a capital financing structure concerning the proposed acquisition; development of retail rates and cost of service; determination of capital improvement project requirements; and performance of an economic/financial analysis the proposed acquisition. ERG staff participated in followup discussions and negotiations with USDOE.
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