|
For more than 30 years, ICF International has helped chart
appropriate courses through complex and challenging regulatory,
litigation, policy, and legislative issues. Our expert testimony
and support for scores of successful cases, including a US$12
billion bankruptcy case, reinforce our reputation for credibly
advocating client views before regulatory commissions and
courts.
Asset and Contract Valuation and Forward Price Forecasting
Contract Dispute. ICF International provided
expert opinion in a power contract dispute case involving
the curtailment of power at a gas-fired cogeneration facility.
Contract Negotiation. ICF International acted
as lead negotiator and expert consultant on two cases for
the Hopi Tribe. The first involved the successful renegotiation
of a coal royalty agreement. The second is an ongoing case
related to water supply in which a key issue is the coal
water slurry pipeline used by the Mohave plant in Arizona.
Forward Price Forecasting. ICF International
performed power market due diligence and assessed forward
prices, dispatch, and revenues for the 500MW Broad River
plant, one of the first plants to be financed in a merchant
environment in the VACAR region. Calpine/SkyGen was the developer,
and CSFB was the lead arranger.
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.
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.
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 RMRs 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.
Oil and Gas Pipeline Valuation and Approval
Pipeline Approval. ICF International testified in Florida
state proceedings on the need for new gas pipelines.
Regulatory Proceedings for Proposed
Pipeline. ICF International
provided litigation support and expert testimony for the
proposed Altamont pipeline before regulatory proceedings
in the United States and Canada.
Pipeline Expansion. To support regulatory
intervention, ICF International examined the implications associated
with the potential dramatic expansion of pipeline export
capacity from Canada into the U.S. Midwest for 1998-2005.
The expansions considered included TCPL, Foothills, Alliance,
and Viking-Voyager. ICF International also commented on the
ability of the Canadian gas, electric, and power industry
to produce economically the natural gas necessary for all
pipeline additions.
Pipeline Valuation. ICF International evaluated the market impacts associated with
various potential projects intending to transport natural
gas from Alberta and British Columbia to the U.S. Midwest.
Assessments examined the impact over time on wellhead prices,
city gate prices, gas drilling, and production levels. Studies
provided the basis for major investment decisions and supported
filings before several regulatory agencies.
Rate Structure and Stranded Cost Analyses
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 ten-year gas price forecast based on our
analysis.
Restructuring Filing, Stranded Costs,
and Resource Mix. ICF International
was a part of team that performed a management audit of
Public Service Electric & Gas’s (PSE&G) stranded
cost and restructuring filings with the New Jersey Board
of Public Utilities (NJBPU). The primary objective of this
project was to provide support to the staff of the NJBPU
during the proceedings associated with the review and approval
of PSE&G’s filing. ICF International reviewed PSE&G’s
stranded cost recovery proposals, conducted extensive modeling
of the electric market in the mid-Atlantic region, conducted
a detailed review of the accounting data on specific generation
assets in order to determine the level of uneconomic generation
assets, and worked with PSE&G and staff to develop consensus
levels of stranded cost. The results of this assistance were
summarized in a final report to the Board and through expert
witness testimony during the regulatory hearings before an
administrative law judge.
Testimony. ICF International provided expert testimony, market
price forecasts, and asset valuations on behalf of FirstEnergy
in a large stranded-cost case argued before the Public Utilities
Commission of Ohio.
Power Plant Finance Analysis. ICF International
supported Pennsylvania Electric Company (PECO) in a stranded-cost
case before the Pennsylvania Public Utility Commission, providing
forecasts for future market prices, power plant revenues,
power plant dispatch, grid system operations, model-based
market value assessment, extensive multiple model review,
and assistance in testimony evaluation
Utility Audit. 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.
Environmental Compliance
Environmental Compliance Planning. ICF International has examined the impacts of potential multipollutant
emission reduction scenarios on compliance planning decisions
and the valuation of generation assets for a number of clients.
In scenarios that include current legislative initiatives,
emissions constraints on SO2, NOx,
CO2,, and mercury were modeled simultaneously
to determine their impacts on retrofit decisions that were
determined to be optimal when facing Title IV SO2 and
NOx SIP Call policies alone. Modeled outputs
were then used to develop pro forma asset valuations for
individual units as well as a company's portfolio of coal,
oil/gas steam, combined cycle, and combustion turbines.
Flexibility mechanisms for carbon equivalent emissions
were explicitly accounted for and modeled. These analyses
were performed for various electric generating companies
using Integrated Planning
Model (IPM®) modeling.
Environmental Regulatory Support. For over
a decade, ICF International has been the lead consultant to
the U.S. Environmental Protection Agency (EPA), U.S. Department
of Energy (DOE), electric utilities, Electric Power Research
Institute (EPRI), Utility Air Regulatory Group (UARG), and
other companies on a wide range of projects related to the
economic and environmental effects of acid rain and other
air pollution regulatory controls. These analyses have involved
assessment of technical, economic, financial, and policy
issues, as well as estimation of emission; utility cost;
projected use of conventional and new SO2, NOx, and
particular control technologies; and coal production impacts.
Multipollutant Impacts Assessment. For
a private client, ICF International evaluated the impacts of
alternative regulatory scenarios for NOx, SO2,
carbon,
and mercury on the value of a utility’s generation
assets. The evaluation included an evaluation of Ozone Transport
Region’s Memorandum
of Understanding, the proposed "SIP Call," and
potential mercury and CO2 regulations.
Environmental Impacts Assessment. ICF International
supported the environmental assessment of the impact of Federal
Energy Regulatory Commission's (FERC) regional transmission
organization rule (FERC Order 2000) on the electric sector.
Evaluation of Legislative Proposal. ICF International provided analytical support to the Clean Energy
Group (CEG) to examine the Group's 4-pollutant (SO2,
NOx, carbon, and mercury) legislative
proposal. Using the IPM® model,
we assessed the impacts on the U.S. electric sector of the
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.
Climate Policy. ICF International provides
support to EPA on climate policy, including assessments of
domestic greenhouse gas emissions control policies, including
market based, cap and trade systems. ICF International has
evaluated alternative approaches for developing a carbon
cap and trade system, the benefits of banking and borrowing
schemes, alternative sectors that might be included,
the level of emissions captured by such a system, and the
potential for “leakage.”
Greenhouse Gas Emission Reduction. ICF International supported the EPA in analyzing the economic and
social costs of various policy strategies for mitigating
the impacts of global climate change. ICF International assessed
the technical and economic potential of implementing various
technologies in the agriculture, forestry, energy, and transportation
sectors to reduce GHG emissions. ICF International identified
market and institutional barriers to implementing technologies
successfully.
Acid Rain Policy. ICF International completed
a series of Regulatory Impact Analyses (RIA) of proposed
and final NOx limits for
utility boilers in Phase I and Phase II of the Acid Rain
Program. Impacts of deregulation on SO2 emission
trading under Phase I and Phase II of the Acid Rain Program
also were analyzed. ICF International prepared the draft
and final regulatory impact analyses of the SO2 allowance
trading system as an element of EPA's Acid Rain regulations.
Clean Air Act. ICF International has been
the leading consultant to the EPA and industry on the economic
and environmental impacts of the Clean Air Act Amendments
and other air regulatory initiatives. For the EPA, ICF International evaluated the costs of compliance with the acid
rain regulations (Title IV) of the Clean Air Act Amendments
(CAAA) of 1990, focusing on Title IV's forecasted effects
on utility SO2 emissions, utility costs and electricity
rate increases, and regional coal markets. Prior to the passage
of the Act, we evaluated all of the major legislative proposals,
as well as alternative proposals by industry and environmental
groups. We evaluated the environmental and economic impact
of two major pieces of proposed legislation, the Senate and
House Acid Rain bills of 1990. ICF International also examined
two acid rain proposals (S-316, the Proxmire Bill, and the
30 Year/1.2 lb. proposal) under several alternative levels
of emissions trading to determine the scope and magnitude
of cost and coal market changes incurred under expanded emissions
trading.
Real Options Analysis. For a mid-Atlantic
power company, ICF International conducted a real options analysis
to determine the optimal sequential compliance strategy for
the upcoming NOx SIP Call regulation. As part
of this effort, ICF International used IPM® to
evaluate numerous NOx control technology options
for each of the power company's generation units. Technologies
evaluated included Selective Catalytic Reduction (SCR), Selective
Non-Catalytic Reduction (SNCR), and RJM's layered NOx technology.
IPM® also was
used to evaluate how compliance strategies were affected
by major uncertainties including gas prices, electric demand
growth, weather, and technology performance. The value of
the power generator's portfolio for alternative compliance
strategies under each uncertainty outcome was used in a real
options decision analysis framework to identify the optional
compliance choice.
Resource Planning and Fuel Diversity
Integrated Resource Planning Regulatory
Intervention. ICF International provided expert testimony in Indiana and Nevada
regarding development and application of integrated resource
planning standards. ICF International staff also played
key roles in the development of integrated resource plans
and planning processes in a number of states, including
Michigan, Illinois, and Kentucky. Work included assistance
with development of regulatory rules and preparation
of Integrated Resource Planning (IRP) filings.
Demand-Side Options for a Northeastern
Utility. ICF International
provided Niagara Mohawk Power Company an assessment of the
economic and market penetration of demand-side investment
options such as high efficiency refrigerators and air conditioners,
building insulation, shower/faucet flow restrictors, fluorescent
lights, and the resource potential from low-head hydro and
wind energy. Corresponding estimates made by the Environmental
Defense Fund were reviewed. Based on these assessments and
estimates, ICF International provided assistance in analyzing
the economics and risks of alternative investment strategies
for Niagara Mohawk involving construction of the Nine-Mile
Point nuclear power plant and conservation and renewables.
Integrated Resource Planning Program
Plan. ICF International
assisted DOE with the development
of the Department’s IRP
state intervention strategy. Under the strategy, the Department
would intervene in state IRP proceedings at the invitation
of the states to present testimony with respect to the
linkages between state and federal resource planning policies.
ICF International staff assisted with the development and
review of testimony.
Integrated Resource Plan, with Externality
Analysis. ICF International assisted Hawaiian Electric Power Company (HECO)
in the development of an integrated resource plan and collaborative
planning process. Project work included a review of the economics
of alternative electricity supply options for meeting future
electricity demand. Part of ICF International’s support
to HECO included expert testimony on all issues related to
integrated resource planning. In addition, ICF International
assisted HECO and its affiliates in developing methodologies
for incorporating environmental externalities into the first
cycle of integrated resource planning, which was particularly
critical due to the large number of active environmental
interveners. ICF International’s activities also involved
developing extensive data on Demand Side Management (DSM)
programs and screening demand-side options. The final plan
involved the three independent electric utilities on Oahu,
Maui, and Hawaii.
Estimating the Potential for Energy
Efficiency. ICF International
developed estimates of the technical, economic and achievable
potential for energy efficiency in the service territories
of Wisconsin Electric and Wisconsin Public Service. The estimates
were required as elements of the State of Wisconsin’s
power plant certification process. ICF International developed
a process-based energy accounting model that tracks energy
using stock in the residential, commercial, and industrial
sectors, and simulates the adoption of energy efficient technologies
and practices over time. The model produces estimates of
potential by end use and sector, and includes estimates of
the costs of achieving different levels of energy efficiency
potential. In the Wisconsin Electric and Wisconsin Public
Service cases, ICF International converted annual estimated
savings into hourly load shapes that were compatible with
the Electric Generation Expansion Analysis System (EGEAS)
capacity expansion model used by the companies. ICF International
also drafted written testimony based on its analysis that
will serve as an expert witness in the certification proceedings.
Analysis of Distributed Generation
(DG) Systems within Local Distribution Networks. ICF International prepared a white paper
evaluating the potential for the use of distributed generation
to supplement local integrated resource planning requirements,
and the cost effectiveness of such an approach. The white
paper included:
1) a review of existing literature and case
studies focusing on the reliability of distributed generation
2)
regional marketplaces in the United States to estimate
the required growth in resources
3) a review of regional
transmission and distribution congestion
After thorough review
of these items, ICF International developed an opinion of
the market opportunity and key risks associated with utilization
of DG resources to supplement system planning requirements.
Strategic Green Power Options, Resource Assessment, and
Distributed Generation.
ICF International analyzed innovative green power options available
to a major Midwest electric utility interested in green power
to develop additional market share on behalf of Commonwealth
Edison. The analysis was conducted from both the wholesale
and retail perspective and included providing the utility
with the current status of the green power market, the potential
green power demand and supply options available in its
region, and what green power programs currently existed.
Among the various tasks, ICF International developed a potential
supply curve for renewable resource generated electricity
available to the utility within a multi-state area. The supply
curve proved to be a useful tool in determining the quantity
and cost of green power as well as various technologies’ relative
position among other green power supplies in its marketing
region. Within the analysis, ICF International also examined
how potential carbon regulation and greenhouse gas offset
values could affect the costs of green power supplies by
creating a "carbon
subsidy" on a ¢/kWh basis.
Transmission, Regional Transmission Organizations (RTO),
and Market Structures
RTO Cost-Benefit Study. For 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 Regional
Transmission Organization (RTO) structure. The RTO framework
proposes to establish consistent and effective market rules
governing transmission systems and power markets over a large
area. Using IPM®,
ICF International analyzed the impact of RTOs on regional electric
prices and energy trade under a business-as-usual case and
three RTO benefits scenarios.
Transmission Siting Analysis. ICF International
identified suitable sites to build a 500 MW combined-cycle
generation unit for a client entering the Wisconsin power
market. The study considered potential risk factors, such
as demand growth, existing installed capability, transmission
adequacy, voltage support, and transmission congestion issues
that could affect the deliverability of megawatts.
Merchant Transmission. ICF International has
been engaged on a continuous basis to assist clients in identifying
and valuing merchant transmission investment opportunities.
We have assisted clients in identifying merchant transmission
investment opportunities in the Northeast markets and the
Midwest markets. We assisted clients in estimating optimal
transmission capacities to ensure a specified return on equity
while simultaneously considering the key risks, including
capacity investments from generation and load response programs.
We are in the process of supporting a potential merchant
power transmission investment financing.
Transmission Congestion Impact. ICF International
determined the impact of transmission congestion on the ability
of several merchant plants to serve load in the Entergy,
Southwest Power Pool (SPP), and Tennessee Valley Authority
(TVA) markets. An economic dispatch of power plants was performed
in the regions considering the effects of transmission constraints
and contingency limits. ICF International showed the impact
of constrained transmission lines on the dispatch and revenue
of the plants and identified the transmission facilities
that were most limiting to the plants. ICF International further
identified transmission facility upgrades that would most
effectively improve the delivery of power in the regions.
Transmission Facilities Expansion. ICF International investigated the effect of the expansion of key
transmission facilities in the Western Electricty Coordinating
Council (WECC) market on power prices in the region. The
work included a transmission constrained economic dispatch
of units in the region and the determination of nodal prices
pre- and post-expansion. The price impact of congestion and
the mitigating effect of the relaxation of the constrained
facilities were estimated.
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.
Transmission Risk Assessment. ICF International
was engaged by a client to assist in managing its operational
risk and flexibility in transmission in the mid-Atlantic
market. Specifically ICF International estimated the transmission
risk exposure on all the major bulk power transmission facilities,
the estimated duration of hours of congestion on each transmission
line link, and the optimal value and type of Financial Transmission
Rights (FTR) needed to hedge transmission price risk for
physical transactions and for supporting trading positions.
Transmission Valuation. ICF International
recently assisted a client in the mid-Atlantic regional power
market to estimate the market value of supplying reactive
power from a portfolio of units to maintain flowgate capacities
between two regional markets. This study estimated the target
portfolio’s
leverage in keeping the flowgate open between the regions
and converted the leverage into value.
Natural Gas Regulations and Contracts
Regulatory Analysis and Advocacy. ICF has provided regulatory analysis and advocacy support under a retainer contract for a diverse group of pipeline shippers. Activities involved preparing and presenting proprietary analysis of rulemaking proceedings, policy statements, and orders issued in individual proceedings to determine the impact of these proceedings on gas markets and activity of gas shippers, preparing analysis and testimony filings for shippers in individual dockets, appearing on behalf of the shipper group at the Federal Energy Regulatory Commission (FERC) public conferences and FERC technical conferences, and meeting with other stakeholder groups regarding FERC proceedings.
Market Competition. ICF provided testimony before Canadian provincial regulators regarding competition and market concentration in the natural gas market. The approach to the analysis, which was accepted by the regulators, applied an innovative method to demonstrate the extent of the relevant geographic and product market that justified the deregulation of large amounts of natural gas storage.
Natural Gas Prices. ICF provided expert testimony for a multibillion-dollar arbitration case in California related to electricity sales during the 2000 to 2004 period. The testimony concerned natural gas prices, use of price indices in contract price formulas, and gas procurement practices.
Contract Pricing. For an Alaskan gas producer, ICF provided testimony on contract pricing and other provisions related to a sale to a local distribution company. ICF’s analyses include the use of appropriate price indices and estimation of the economics of alternative-fixed versus swing-volume sales options.
Market Conditions. ICF provided expert testimony on behalf of a shipper on an interstate gas pipeline in a case involving contract rights that could be affected by market events. ICF provided a structured analysis of the market conditions, examined and defined the contract terms in the context of prevailing business practices, and provided a framework for and quantification of economic damages.
Bankruptcy and Mergers & Acquisitions (M&A)
Bankruptcy Litigation for CSW. ICF International provided
litigation support in the US$1 billion Cajun bankruptcy case
for Central and Southwest (CSW). ICF International gave expert
testimony and served as lead witness for CSW before both
the Federal Bankruptcy Court and the Louisiana Public Utilities
Commission on issues ranging from coal contracting, coal
prices, and coal transportation costs, to power market conditions
and regulated rates.
Bankruptcy Litigation for Madison Gas and Electric. Madison Gas and Electric retained ICF in an arbitration case involving breach of contract claims by an officer and principal of an unregulated energy marketing affiliate of the utility. ICF’s role was to place the actions surrounding the bankruptcy into the context of energy industry restructuring and market events, including price volatility.
Divestiture Review. For a large pulp, paper,
mining, and metals company, ICF International was responsible
for managing a divestiture review of three facilities. The
work included identifying and estimating current and potential
environmental liabilities and evaluating the facility's regulatory
compliance status. All work, including soil and water sampling
and analysis and final report, was completed within three
weeks of the client’s initial request.
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.
|
