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Our track record in analysis and forecasting of power
markets speaks for itself―ICF International accurately
predicted the extreme power price spikes, energy shortages,
and blackouts of recent years. Our insight has facilitated
the financing of more than US$20 billion in power assets.
Government clients rely on ICF International's superior analytics
to develop energy and environmental policy in turbulent
markets around the world.
Power Market Forecasts
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.
Estimation of Market Value for Reactive Power. ICF International estimated the market value of supplying reactive
power from a portfolio of units to maintain flowgate capacities
between two regional markets for a power generator and
trader in the mid-Atlantic regional power market. This
study estimated the target portfolio's leverage in keeping
the flowgate between the regions open and converted the
leverage into value.
Operating Reserve Price Forecasting.
ICF International provided price forecasts for the value of three classes of operating
reserves in the mid-Atlantic regional power market for a generation provider
and trader. Our forecasts were based on a simultaneous analysis of the reserve
and power markets to optimally determine the prices for energy, capacity,
and operating reserves using the Integrated
Planning Model (IPM®). Our analysis determined which plants were
best suited to provide reserves and the appropriate point at which reserve
provision was more profitable than energy provision for those plants.
Market Assessment of Operating Reserves.
ICF International can forecast market prices for all classes of operating reserves
for the integrated regional power markets in the United States to support
market transactions and generation asset valuation. ICF International forecast
prices for three classes of operating reserves, i.e., Ten-Minute Spinning
Reserves, Ten-Minute Non-Spinning Reserves, and Thirty-Minute Supplemental
Reserves.
Asset Financing
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 prime mover diversity within
the portfolios, and have been well received by the financial
community and rating agencies such as Moody's, S&P,
and Fitch.
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, PJM, MAIN, ECAR, the Rockies, VACAR, ERCOT,
Entergy, Southern, TVA, and 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.
Power Plant Finance Analysis. ICF International
supported 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.
Mergers and Acquisitions
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.
Restructuring and Divestitures
Restructuring Audit for New Jersey Board of Public
Utilities. ICF International performed a management
audit of a major utility's restructuring filing with the
New Jersey Board of Public Utilities (NJBPU) and advised
the NJBPU staff during the review and approval of the filing
proceedings. We examined the utility's proposals and reviewed
the preparedness of the utility for full retail access
in 1999. In addition, ICF International prepared a final report
on the restructuring filings and provided expert testimony during NJBPU hearings
on the filings.
Cajun Bankruptcy Case for Central and Southwest. We
provided litigation support in the US$1 billion Cajun bankruptcy
case for Central and Southwest. Our services included expert
testimony before both the Federal Bank Court and the Louisiana
Public Utilities Commission on a range of issues, including
coal contracting, coal and coal transportation prices, power
market conditions, and regulated rates.
Forward Valuation and Dispatch Analysis
Generation Dispatch Analysis. For two
developers of a major power generation project in the greater
Phoenix, Arizona, area, ICF International provided a range of
services, including: evaluating how the project would likely
be dispatched in the Western Electric Coordinating Counsel
(WECC) and the local market, given other existing capacity
and significant amounts of new capacity coming on line; assessing
impacts on the plant of "contingencies"
in which certain regional generating stations and transmission
lines became unavailable; and analyzing the impact of the
potential addition of a new transmission line that would
enhance the project's ability to sell power to more distant
wholesale customers.
Forward Price Assessment. 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 Virginia and Carolinas (VACAR) region.
Calpine/SkyGen was the developer, and Credit Suisse First
Boston (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.
Coal-Fired 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.
Gas-Fired 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.
Regulatory and Policy Impact Analysis
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 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 its Integrated
Planning Model (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.
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.
Deregulation and Bulk
Power Reliability for the U.S. Department of Energy. ICF International provided technical support to the Task Force
on Bulk Power Reliability. Issues addressed included
the role of markets and the roles of Independent System
Operators (ISOs) with respect to reliability.
Electric Generation Deregulation. For
an investor-owned utility, ICF International evaluated the reasonableness
of introducing competition into the generation sector. The
analysis was submitted to Government with regard to pending
legislation. The analysis evaluated three types of competition:
for new generation, for the sale of existing generation,
and for on-site customer generation. ICF International provided
specific policy and strategic recommendations.
Market Power. ICF International testified
in New York on proposed market rule proposals that were subject
to both New York Independent System Operator and Federal
Regulatory Energy Commission (FERC) approvals. The proposed
rules were related to the mitigation of market power.
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