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ICF International offers in-depth knowledge of market dynamics,
natural synergies and hedges, and the ability to customize
the analytic process. Our valuations and due diligence
analyses have supported the financing of more than US$20
billion in energy assets. Comprehensive understanding of
the market, combined with our flexibility, creativity,
and perspective, earn trust and respect in the financial
community.
Power and Transmission Asset Due Diligence
Transmission Investment
Support. ICF International continually helps clients identify
and value merchant transmission investment opportunities
in the Northeast, Midwest, and Western markets. We help clients
realize value through determining optimal transmission capacities
to ensure a specified return on equity while simultaneously
considering the key risks, such as capacity investments
from generation and load response programs. We supported
a potential merchant power transmission investment financing.
Cogeneration Due Diligence Support. ICF International has provided independent valuation and due diligence
review for financial arrangers, developers, and investors
in support of cogeneration development in the United States,
Canada, and Singapore. Our analyses typically include pro-forma
style models, risk comparisons to other project types, and
review of the market impact of the cogeneration technology.
Our due diligence review focuses on economic and financial
feasibility, pricing, and reliability of the fuel supply
and transportation; dispatchability of the project; and the
technical operating assumptions.
Site Assessment Due Diligence. ICF International
helped a client enter the Wisconsin power market by employing
our transmission
modeling expertise to identify suitable
sites to build a combined-cycle generation unit. In recommending
potential locations for the client, the study considered
potential risk factors, such as demand, existing installed
capability, transmission adequacy, voltage support, and transmission
congestion issues on the deliverability of megawatts, while
providing the necessary initial due diligence efforts to
support further project review.
Forecasting Congestion and Managing
Congestion Risk. ICF International used its transmission expertise to assist a client
in the Electric Reliability Council of Texas (ERCOT) zonal
congestion market to forecast congestion costs along the
region’s
commercially significant transmission constraints. We also
forecasted—on a near-term, multi-year basis—potential
revenues to the client's plants from the provision of congestion
relief.
Valuation. ICF International provided an independent valuation
and due diligence review for an investor buying an interest
in a Canadian cogeneration project. ICF International validated
the existing pro forma model and developed independent assumptions
for key project parameters. ICF International's valuation compared
the proposed investment to other projects of similar risk.
The due diligence review focused on the pricing and reliability
of the Canadian gas supply and transportation, the dispatchability
of the project, and the technical operating assumptions.
Power Plant Certification. ICF International provided detailed
analysis of energy-efficiency potential as part of power
plant certification proceedings for two Midwestern utilities.
ICF International staff developed testimony supporting the analysis
and is serving as expert witnesses.
Oil and Gas Asset Due Diligence
Natural Gas Storage and Pipeline
Valuation. ICF International assessed the value of
a proposed storage project and related natural gas pipeline
in the United States Southwest for a private power company
interested in bidding on capacity. Using ICF International's Energy Asset Decision Support System (EADSS™),
we identified how the proposed storage and additional pipeline
would alter the flow patterns, enhance deliverability, and
reduce price volatility. This engagement required modeling
gas and electric market interactions.
High Deliverability Gas Storage in
U.S. Northeast. ICF International
analyzed the commercial feasibility of a salt cavern natural
gas storage project in the northeastern United States for
a gas storage developer and service company. We performed
an economic analysis of the regional market for high-deliverability
storage service and the alternative services available to
prospective customers. Pipeline capacity, conventional seasonal
storage, and liquefied natural gas (LNG) options were considered
as potential alternatives. Potential competing markets
included regional power generation, industrial, and core
market sectors. We researched potential storage service
customers, including local distribution companies (LDC)
and gas marketers, as well as direct service for power
generators and industrials.
Evaluating Natural Gas Gathering Facilities. On behalf of
an interstate pipeline, ICF International estimated the value
of a non-jurisdictional gathering pipeline system. The analysis
used the ICF International's Energy Asset Decision Support System (EADSS™) to examine the implications
of possible new production coming on line, gas market prices
on different connecting pipelines, and competition from
nearby gathering systems. The analysis showed the expected
stream of revenues and the high and low values associated
with project uncertainties.
Pipeline Valuation. ICF International supported
valuations of the Texas Oasis pipeline and the Weeks Island
Pipeline. For the former, we examined producer options for
shipping on alternative pipelines to help identify what rates
could be charged based on shipper opportunity costs and market
prices in the Katy and Waha areas. For the Strategic Petroleum
Reserve, we helped the government develop information to
submit an offering memorandum for selling the surplus Weeks
Island oil line as a gas pipeline. We identified markets,
differential values in these markets, potential buyers, and
an estimate of the value.
Alaskan Pipeline. For producers on the
Alaskan North Slope, ICF International evaluated the effect
of Alaskan and MacKenzie Delta gas on U.S. and Canadian gas
markets, prices, and pipeline flows. We evaluated various scenarios to assist the producers in
understanding the implications of different assumptions and
configurations for bringing frontiers supplies into the market.
Environmental and Renewables Asset Due Diligence
Air Regulatory
Risk Assessment. ICF International performed air
quality computer analyses on a fast-response basis for
an industrial facility with its own electric generating
capacity. The analysis involved evaluation of U.S. Environmental
Protection Agency (EPA) control strategy development based
on a rollback model for SO2 in Ohio, and on
the development of an alternative modeling approach. We
improved the emissions inventory, obtained local wind observations,
and modified Gaussian dispersion models to account for
terrain elevations. The modifications created strong correspondence
between predicted and observed concentrations. In this
case, emissions inventory errors nearly led to imposition
of unnecessary controls at a potential cost of tens of
millions of dollars.
Due Diligence Review of an Oil Company. ICF International identified and estimated potential environmental
liabilities associated with past and present company operations
as part of a due diligence review for an independent oil
company. Because the acquisition involved a stock swap, management
was concerned that significant environmental liabilities
could affect the desirability of the offer. Working under
an extremely tight deadline, our staff assembled publicly
available information on more than four dozen North American,
European, and Latin American current and past operations
and then identified likely liabilities.
Air Regulation Compliance Due Diligence. ICF International developed a bid for an electric power company
for existing electric generation assets that included an
optimal air regulation compliance strategy that minimized
investment costs and preserved option values to future air
regulatory uncertainties, such as President Bush’s
Clear Skies Initiative.
Estimation of Costs for Corrective
Action. ICF International
conducted a review of a potential acquisition for a Fortune
50 chemical and specialty products company with six manufacturing
plants in France, Spain, England, and the United States.
This project involved assessing each facility's environmental,
health, and safety (EHS) status, conducting on-site
sampling and analyses to characterize potential contamination,
developing technical solutions, and preparing budget-quality
cost estimates for implementation.
Baseline Assessment and Review. ICF International
developed a rapid baseline environmental assessment of operations
for an established electric utility faced with new management.
We directed a review of the operation to provide the new
team due diligence on
the status of current operations. We also developed a plan
to help manage and eliminate the utility's potential liabilities.
ICF International was able to develop an exposure cost for the
operations and an implementation plan to minimize those exposures.
Market Expert Opinion for an Initial Public Offering
(IPO). ICF International served as market experts
undertaking market and technical due diligence for a carbon
credit project development company seeking to float on
London's AIM stock market.
Forward Valuation and Dispatch Analysis
Dispatchability Assessment. ICF International performed an independent assessment of the
dispatchability and the forward revenue stream of a gas-fired
cogeneration plant in Houston, Texas, being developed by
Reliant. The debt portion of the project was financed successfully
in the bank market and closed in 2000. Bank of America
was the lead arranger. ICF International also supported the
equity investment portion of the facility for the developer.
Staff analyzed the complex environmental compliance legislation
currently proposed for Texas.
Forward Valuation and Stranded Cost
Due Diligence. ICF International provided forecasts
for future market prices, power plant revenues, power plant
dispatch, and grid system operations for the first U.S.
stranded cost case. We also provided asset valuations and
market price forecasts for a major energy company in the
largest U.S. stranded cost case. ICF International has worked
with several companies to value their expected forward
generation asset position in support of stranded costs
hearings.
Dispatchability Assessment. ICF International performed an
independent assessment of the dispatchability and the forward
revenue stream of a coal-fired steam plant. ICF International
incorporated the latest environmental legislation affecting
the facility and modeled the market interaction throughout
most of the Eastern Interconnect. The project was financed
in the bank market and financing closed in 1999.
Restructuring and Divestitures
Utility Asset Divestiture. ICF International
facilitated the successful divestiture of a large demand
response program from a regulated Texas distribution utility
to a Northeast-based unregulated technology firm. ICF International
provided advisory and facilitation services through the development
of a prospectus, initial asset valuation, marketing, proposal
evaluation, and negotiations. ICF International also provided
critical support for the transaction through successful intervention
with Texas regulators and ERCOT market design and the
identification of third-party retail energy provider
partners for the technology firm. This engagement required
ICF International's integrated analytics, business acumen,
and market intelligence and network to actively support
the successful close of this transaction.
Predivestiture Assessment of Oil and
Gas Properties. ICF International provided an independent opinion regarding the
environmental liabilities that may be present on the oil
and gas production properties of a company deciding to divest
a portion of its energy business. We conducted site environmental
assessments of 20 of its key well-sites, compressor stations,
gas treatment plants, and crude oil storage batteries, in
all covering 700,000 acres of production property, in a week.
Our ability to quickly deploy five teams of environmental
professionals from around the world was essential to our
ability to meet the client's schedule. Site work was completed
within two weeks. Our report, which was used to support our
client's representation of substantial compliance with environmental
regulations in the transaction, was delivered within two
weeks of fieldwork completion.
Gas Market Restructuring. For Oglethorpe,
ICF International reviewed gas market restructuring and deregulation
in Georgia. ICF International analyzed various restructuring
proposals and legislation that encouraged performance-based
regulation and an unbundling of gas sales service. These
restructuring proposals were among the most comprehensive
and wide-ranging in the United States, and included provisions
for certification of gas marketers, election to compete by
local distribution companies, safety of system supply, and
an orderly transition to a competitive marketplace, with
options for re-regulation in some areas if competition failed.
ICF International summarized and explained the restructuring
proposals to Oglethorpe management, identified key uncertainties,
and developed a 10-year gas price forecast based on our analysis.
Divestiture Review. For a large pulp, paper,
mining, and metals company, ICF International staff was responsible
for managing a divestiture review of three facilities. The
work included identifying and estimating current and potential
environmental liabilities and evaluating the facilities’ regulatory
compliance status. All work, including soil and water sampling,
analysis, and final report, was completed within three weeks
of the client’s initial request.
Utility Audit of Restructuring Filing. ICF International performed
the management audit of a major utility’s restructuring
filing before the New Jersey Board of Public Utilities (NJBPU)
and advised the NJBPU staff during the review and approval
proceedings. Staff prepared final reports on the restructuring
filing and provided expert testimony during the NJBPU hearings.
Divestiture Assessments. For a major Canadian
chemical, plastics, and rubber manufacturer, ICF International
staff directed environmental due
diligence assessments in anticipation of the divestiture
of its rubber operations. These assessments were conducted
at facilities in the United States, Canada, and Europe to
evaluate whether the facilities were in substantive compliance
with applicable regulatory requirements and to identify actual
and potential environmental liabilities. The report was presented
to the purchaser and was included as part of the representations
and warranties made by the client.
Mergers and Acquisitions and Financing
Power Plant Acquisition
Support. For numerous generation asset auctions
and sales, ICF International provided the fundamental analysis
for investors to evaluate the forward performance of individual
assets and portfolios of assets. ICF International’s analysis
included review of the expected case performance, as well
as stress analysis associated with specific risks, such as
fuel costs, introduction of new generation facilities, transmission
congestion, and demand variations. ICF International has evaluated
portfolios throughout the United States and Canada that include
nuclear, hydroelectric, fossil, and renewable capacity types.
Recent assessments have focused on assets in the European
and Asian markets.
Distribution Asset Acquisition. ICF International
has provided integrated teams of strategists, planners, engineers,
and analysts to conduct due diligence of utility distribution
assets for acquisition. ICF International teams provided financial
valuation, estimated costs of required system improvements,
and developed revenue models and alternative rate structures.
ICF International also supported the negotiation of the purchase
agreement. In this work, ICF International has pioneered the
adaptation of activity-based costing methodology to distribution
utility rate design.
Market Assessment for Pipeline Refinancing. ICF International conducted a market assessment for the refinancing
of the Iroquois pipeline system to benefit its potential
lenders and note-holders. We assessed gas supply, demand,
and trans- portation in the Northeast United States. We also
examined the gas production outlook and the value of supply
from relevant sources, determined the range of gas market
outlooks for the Northeast, and assessed the competitive
position of the pipeline in its northeastern market.
GENCo Portfolio Financing. ICF International
supported the first-of-its-kind GENCo formation for a large
utility and several rating agencies. We have since provided
support for several GENCo related financings. Our services
included valuating the GENCo portfolio, as well as providing
a framework for evaluating markets and risks associated with
unregulated operation of GENCo assets. Specific items reviewed
include assessment of potential retirements, environmental
factors, and competitive market conditions. Our studies also
consider risks and associated mitigating factors relative
to geographic diversity and primemover diversity within the
portfolios, and have been well received by the financial
community and rating agencies such as Moody's, S&P, and
Fitch.
Market Assessment for Financing of New Pipeline
Construction. ICF International was retained by
a consortium of banks to provide a market assessment for
financing the construction of the $1 billion Maritimes
and Northeast Pipeline System (M&N)
between Nova Scotia and New England. We also were retained
on behalf of lenders for Iroquois Pipeline’s refinancing
and later its Eastchester Expansion into New York City.
In all of these assignments, we analyzed the long-term
potential, viability, and economics of gas supply, reviewed
long-term gas demand forecasts, and assessed relative competitive
positions of fuel suppliers and pipelines delivering into
the New York and New England markets. ICF International also
provided similar lender support in the Pacific Northwest
and California for the PGT Expansion.
Merchant Power Plant Financings. ICF International
supported the first-of-its-kind development for a number
of financing transactions, including the first 144A bond
financing for a merchant coal-fired power plant, the first
new peaking-plant financing in the Midwest, and the first
project-financed merchant plant in Canada. In addition, we
supported numerous bank syndication and capital market transactions
in North America, including:
- New England
- Pennsylvania-New Jersey-Maryland power pool (PJM)
- Mid-America Interconnected Network (MAIN)
- East Central Area Reliability Coordination Agreement
(ECAR)
- the Rockies
- Virginia Carolina Reliability Group (VACAR)
- ERCOT
- Entergy
- Southern
- Tennessee Valley Authority (TVA)
- Alberta
Our analyses
include forecasts of market prices, characterization of market
uncertainties, determination of market risk, wholesale power
revenues, and fuel costs. ICF International also assisted in
the marketing efforts for the bond offerings and in obtaining
investment-grade ratings from Moody’s, S&P, and
Fitch.
Regional Transmission Organization (RTO) Cost-Benefit
Study. For
the Federal Energy Regulatory Commission (FERC), ICF International
addressed the question of how regional transmission organizations
would impact regional power markets in the United States
in a cost-benefit
analysis of the proposed FERC RTO structure.
The RTO framework proposes to establish consistent and effective
market rules governing transmission systems and power markets
over a large area. Using ICF International's Integrated Planning Model (IPM®),
we analyzed the impact of RTOs on regional electric prices
and energy trade under a business-as-usual case and three
RTO benefits scenarios.
Legislative Support. ICF International supported
development of a merchant Integrated Gasification Combined
Cycle (IGCC) facility. Our analysis included review of the
operational characteristics of the unit and recommendations
and verification of performance standards for operation.
ICF International also determined the forward expected dispatch
and revenue stream from operation of the unit, as well as
the expected value to consumers. Our staff testified before
state legislative committees in support of this project development.
Evaluation of Legislative Proposal. ICF International provided analytical support to the Clean Energy
Group to examine the group's four-pollutant (SO2,
NOx, carbon,
and mercury) legislative proposal. Using ICF International's Integrated Planning Model (IPM®),
we assessed the impacts on the U.S. electric sector of the
Clean Energy Group (CEG) proposal and competing proposals.
From the analysis, we projected impacts on system compliance
costs, regional and national energy prices, and emission
allowance prices. Components of the CEG proposal have since
been integrated into Senator Carper's proposed Clean Air
Planning Act of 2002.
Dispute Litigation Support. ICF International provided litigation
support for a large power company regarding a dispute that
emerged during the merger between our client and another
large power company. The dispute was related to the misrepresentation
of risk management practices by the other company. The dispute
was successfully resolved in our client’s favor.
Climate Policy Support on Greenhouse Gases. ICF International provides support to EPA on climate
policy, including assessments of domestic greenhouse
gas emissions control policies, such as market-based, cap-and-trade
systems. Our firm has evaluated alternative approaches for
developing a carbon cap-and-trade system, benefits of banking
and borrowing schemes, addressing alternative sectors that
might be included, the level of emissions captured by such
a system, and the potential for "leakage." Our
staff has also evaluated the potential benefits of co-control
strategies as well as the impacts of renewable portfolio
standards.
Contracting Practices. ICF International provided
support and expert testimony concerning the prudence of Houston
Lighting & Power's
coal contracting practices. After testimony was filed, the
State of Texas dropped its prudence case, saving the company
more than $100 million in potential damages.
Reliability Must Run Dispute. ICF International
was engaged to perform an independent assessment of Reliability
Must Run (RMR) requirements for a load pocket in the Western
Electricity Coordinating Council (WECC) market. The task
was to identify the minimum RMR requirements from utility
generators in a load pocket and the demand levels beyond
which RM’s
would be required. The analysis was used to support an Independent
Power Producer to make the case against an incumbent utility
on the designation of excessive RMR Megawatts within the
load pocket.
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