SlideShare a Scribd company logo
1 of 8
Download to read offline
Copyright © 2012 by ScottMadden. All rights reserved.
Five Strategic Priorities for
Generation and Transmission Cooperatives
Winter 2012
Contact: Brad Kitchens (sbkitchens@scottmadden.com)
Marc Miller (mdmiller@scottmadden.com)
Copyright © 2012 by ScottMadden. All rights reserved.
Introduction
Generation and Transmission cooperatives face a rapidly changing business outlook with complex and high-stakes
challenges on many fronts. We believe these organizations must address five strategic priorities to confront the future
with confidence. This insight provides a summary for a five-part series that ScottMadden will publish.
1
Managing
Generation
Assets
Ensuring
Grid Security
and
Reliability
Gaining
Access to
Capital
Markets
Improving
the
Effectiveness
of
Stakeholder
Management
Fostering
Economic
Development
Copyright © 2012 by ScottMadden. All rights reserved.
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
(MW)
Top Cooperatives
CurrentGeneration Capacity by Fuel Type
Hydro
Renewable
Natural Gas
Coal
Managing Generation Assets
2
The management of generation assets, never easy, is even more challenging in today’s environment of volatile commodity
prices, aging infrastructure, environmental mandates, and regulatory and capital market uncertainty.
Almost half of the total MW capacity of top cooperatives* is coal.
Establishing a formal approach to portfolio lifecycle optimization is
becoming critical.
Physical Assets
Life Cycle Costs
Resource Optimization
Risk
Asset Value
Ensuring assets operate at design parameters with minimal off-normal operations
Optimizing initial and ongoing investment to maximize an asset’s value over its life cycle
Maximizing the contribution from those who manage the asset through review of performance
Managing engineering, operational, and financial risk
Developing additional value from physical assets and management/operational competencies
DescriptionComponent
Gas
 Impact of the “rush to gas”
on future demand (and
prices)
 Environmental pressures on
shale gas extraction
Coal
 Regulatory uncertainty
 Environmental pressure
 Feasibility of retiring older
units
Nuclear
 Long development time and
higher project schedule risk
 Uneasiness about future
capital costs and current
economics (low gas price)
 Environmental scrutiny (e.g.,
on spent fuel)
Wind
 Extent and timing of
renewable energy standards
 Low capacity factor and
intermittency
 Geographic constraints and
transmission availability
Each resource type has key issues that complicate resource
planning:
The lifecycle value of a portfolio can be optimized through a comprehensive asset management strategy.
*Defined here as those with assets more than $1 billion or annual revenue more than $500 million
Copyright © 2012 by ScottMadden. All rights reserved.
$47.4
$57.2
$49.0
$43.0 $41.1
$48.4
$59.9
$74.1
$82.8
$77.6 $74.2
$-
$10
$20
$30
$40
$50
$60
$70
$80
$90
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
$Billions
AnnualCapitalExpenditures
Gaining Access to Capital Markets
3
0%
20%
40%
60%
80%
100%
120%
Debt(%)
Topcooperatives
Debt/ Capitalization
-
0.50
1.00
1.50
2.00
2.50
Ratio(X)
Topcooperatives
DebtService CoverageRatio
 A median DSC ratio of 1.31x is within the
range of a Fitch study in which ratios of
public power firms rated AA or A ranged from
1.25x to 1.7x from 2005 to 2009*
 Relatively high debt levels (a median of
86% of total capitalization) reflect the large
balance sheets and low risk profile of most
cooperatives
*Sources: SNL Financial and EEI Finance Department, U.S. Public Power Peer Study June 16, 2010
**Defined here as those with assets more than $1 billion or annual revenue more than $500 million
 Total property, plant and equipment
jumped nearly 20% in the past six years,
from $816B in 2005 to $998B in 2010*
 Annual capital expenditures at investor-
owned utilities have grown from $47B in
2000 to $74B in 2010
Regulatory & Legislative Environment
 Strong rate-making ability or positive
regulatory relationships
 Consistent engagement with key
stakeholders
Business & Economic Environment
 A diverse and growing service area
 Community support for conservation and
investments in efficiency
Management & Operations
 Experienced and effective leadership
 Competitive operational performance
 A diverse and low cost resource mix
Financial Performance
 Strong historical financials, including
balance sheet stability, appropriate debt-
service ratios, and sufficient liquidity
Dimensions of Business
Strength
How Do Capital Markets Judge Cooperatives?
With potentially costly environmental upgrades on the horizon and the need to increase capacity over the long term, capital
needs continue to rise.
What is driving Cooperatives to Access
Capital Markets?
 At the same time, RUS financing is
declining and becoming more restrictive
— RUS financing was $7.5B in
2008, and estimated to be
only $6.1B in 2012, a $1.4B
decrease
The 21 top cooperatives** demonstrated the following financial characteristics in 2010:
Copyright © 2012 by ScottMadden. All rights reserved.
Ensuring Grid Security and Reliability
4
In 2008, FERC gave NERC the power to establish mandatory bulk power system requirements for security and reliability and
to audit compliance and levy fines. Since then, NERC standards and requirements have grown and are growing.
NERC Compliance Maturity Model
Ongoing Compliance
 Continuous cycle (as
standards evolve,
procedures are
updated and
personnel are
trained)
 Demonstrated culture
of compliance
 Active regulatory
relationships
Integration and
Automation
 Requirements
coordinated by all
business units
 Documents
managed
electronically
 Workflow and
metrics automated
Accountability
 Dedicated
compliance
organization
established
 Individual standard
owners assigned
Defined Processes
 Compliance
requirements defined
 Mitigation activities
established
HighLow Maturity Level
Top 10 Violations (March 2010 – March 2011)
 Top companies are working to ensure that their
organizations can evolve to meet changing NERC
and FERC priorities
 In 2012 and beyond, NERC will use a risk-based
approach to reliability, including a heavy focus on
Critical Infrastructure Protection (CIP) standards
— 8 of the top 10 standards violated, and
80% of total violations, are CIP
 In addition to managing key reliability metrics,
companies should also build a mature and
effective compliance program
 Compliance programs are most effective when
they impact multiple dimensions of an
organization, including:
— Organizational Structure
— Standards Development
— Employee Training
— Program management
— Risk management
— Systems and Processes
— Technology Management
Rulemaking and Enforcement is Evolving
Copyright © 2012 by ScottMadden. All rights reserved.
Fostering Economic Development
5
Cooperatives can be powerful drivers of economic development for their communities. In spite of competing demands on
financial resources, economic development is a perennial top priority at best-in-class companies, with the most successful
sharing a few common characteristics
 Visible and Accountable Leadership: Support for initiatives is maintained throughout the organization, leadership is accountable, and
progress is reviewed and communicated regularly
 Consistent and Significant Resources: Every year, substantial technical, financial, and human resources are dedicated to fostering
economic development
 Focused and Measurable Objectives: Customized initiatives, with clear goals, are designed based on a broad set of proven approaches
Required Commitment
Data and Analytical Resources
 Site Selection/Certification:
Providing access to
geographic information
systems (GIS)
 Economic Data: Providing
access to analysis of industry
sectors, demographic data,
economic trends, and electric
usage estimates
 Publications: Publishing
documents or periodicals
addressing local or regional
economic concerns
Planning and Development
Management
 Engineering and Project
Management: Providing
engineering services for site
evaluation and planning, or
project managers to navigate
the site development process
 Strategic and Community
Plan Assistance: Enabling
communities to direct change
through assistance with
evaluating resources and
objectives
Community and Industry
Collaboration
 Funds: Creating funds for
economic development, job
creation, or the enhancement
of infrastructure
 Grants: Awarding
development grants to
deserving entities
 Incentives: Providing
businesses with incentives to
conserve or improve energy
efficiency
 Educational Programs:
Working with local colleges to
create educational sessions or
comprehensive grant
programs
Impact
How Do Top Performing Companies Approach Economic Development?
Copyright © 2012 by ScottMadden. All rights reserved.
Improving the Effectiveness of
Stakeholder Management
Cooperatives face unique governance challenges: while working to meet the expectations of investors, voters, citizens,
and government entities, they must also work to preserve transparency and member control.
6
Cooperatives Face A Balancing Act
 Promotes transparency and collaboration among stakeholders and the utility
 Incorporates stakeholder input into strategic planning decisions
 Fosters stakeholder understanding of planning constraints and viewpoints
 Establishes stakeholder “buy-in” and support of the planning process
 Increases support from policy and rate-making authorities
An Effective Stakeholder Management Plan
 Conflicting stakeholder expectations and financial
and strategic constraints combine to form a
challenging landscape
Clean Energy
Advocates
Environmental
Advocates
Retail Customers
Wholesale
Customers
Academia
Generation
Partners
Governments at
All Levels
Financial
Analysts
Stakeholder
Engagement
Chambers of
Commerce
Misc. Business
Interests
Expectations Constraints
Higher material and
labor costs
Decreases in demand
Aging infrastructure
and regulatory
uncertainty
Volatile commodity
prices
Investment in
renewable energy
Environmental
improvements
Sustained earnings
growth
Low rates and reliable
power
Copyright © 2012 by ScottMadden. All rights reserved.
Contact Us
ScottMadden has undertaken numerous consulting projects for cooperatives across the country. If you are interested in
learning more about strategic priorities for Generation and Transmission Cooperatives, please contact us.
Brad Kitchens
President and CEO
ScottMadden, Inc.
3495 Piedmont Rd, Bldg 10
Suite 805
Atlanta, GA 30305
Phone: 404-814-0020
sbkitchens@scottmadden.com
Marc Miller
Director
ScottMadden, Inc.
3495 Piedmont Rd, Bldg 10
Suite 805
Atlanta, GA 30305
Phone: 404-814-0020
mdmiller@scottmadden.com

More Related Content

What's hot

2020, the latest developments in Environment, Social and Governance investing
 2020, the latest developments in Environment, Social and Governance investing 2020, the latest developments in Environment, Social and Governance investing
2020, the latest developments in Environment, Social and Governance investingnetwealthInvest
 
SASB 101 January, 2016
SASB 101 January, 2016SASB 101 January, 2016
SASB 101 January, 2016Jean Rogers
 
The Reconstruction Of Executive Incentives
The Reconstruction Of Executive IncentivesThe Reconstruction Of Executive Incentives
The Reconstruction Of Executive Incentivescvg2014
 
Underwater Equity
Underwater EquityUnderwater Equity
Underwater Equityfwhittlesey
 
UN SDGs Sustainability Impacts Practices and Assessment KPIs
UN SDGs Sustainability Impacts Practices and Assessment KPIsUN SDGs Sustainability Impacts Practices and Assessment KPIs
UN SDGs Sustainability Impacts Practices and Assessment KPIsAlex G. Lee, Ph.D. Esq. CLP
 
Cedar ESG Global Equities
Cedar ESG Global EquitiesCedar ESG Global Equities
Cedar ESG Global Equitiescedarportfolio
 
Material Engagement
Material Engagement Material Engagement
Material Engagement Nawar Alsaadi
 
Growth is every CEO's challenge - Deloitte Consulting Presentation
Growth is every CEO's challenge - Deloitte Consulting PresentationGrowth is every CEO's challenge - Deloitte Consulting Presentation
Growth is every CEO's challenge - Deloitte Consulting Presentationekagan
 
London 2015 Speaker Slide Template 16-9 FINAL copy
London 2015 Speaker Slide Template 16-9 FINAL copyLondon 2015 Speaker Slide Template 16-9 FINAL copy
London 2015 Speaker Slide Template 16-9 FINAL copyfwhittlesey
 
ESG engagement inisghts (v 1.1)
ESG engagement inisghts (v 1.1)ESG engagement inisghts (v 1.1)
ESG engagement inisghts (v 1.1)Nawar Alsaadi
 
ESG integration in Equities and Fixed Income
ESG integration in Equities and Fixed IncomeESG integration in Equities and Fixed Income
ESG integration in Equities and Fixed IncomeNawar Alsaadi
 
Partnerships: Engaging American Manufacturers
Partnerships: Engaging American ManufacturersPartnerships: Engaging American Manufacturers
Partnerships: Engaging American ManufacturersAlliance To Save Energy
 
Barclays ESG_Brochure_US_18_small Sustainable Investing and bond returns NOV ...
Barclays ESG_Brochure_US_18_small Sustainable Investing and bond returns NOV ...Barclays ESG_Brochure_US_18_small Sustainable Investing and bond returns NOV ...
Barclays ESG_Brochure_US_18_small Sustainable Investing and bond returns NOV ...Andrew Bellak
 
Financing Tools for a Green Building Stock
Financing Tools for a Green Building StockFinancing Tools for a Green Building Stock
Financing Tools for a Green Building Stocknilskok
 
Governance Past Present Future
Governance Past Present FutureGovernance Past Present Future
Governance Past Present Futurecvg2014
 
Real Estate Lending and Sustainability: The Business Case for Risk Management...
Real Estate Lending and Sustainability: The Business Case for Risk Management...Real Estate Lending and Sustainability: The Business Case for Risk Management...
Real Estate Lending and Sustainability: The Business Case for Risk Management...GRESB
 

What's hot (20)

Stakeholders Take Center Stage: Director Views on Priorities and Society
Stakeholders Take Center Stage: Director Views on Priorities and SocietyStakeholders Take Center Stage: Director Views on Priorities and Society
Stakeholders Take Center Stage: Director Views on Priorities and Society
 
2020, the latest developments in Environment, Social and Governance investing
 2020, the latest developments in Environment, Social and Governance investing 2020, the latest developments in Environment, Social and Governance investing
2020, the latest developments in Environment, Social and Governance investing
 
SASB 101 January, 2016
SASB 101 January, 2016SASB 101 January, 2016
SASB 101 January, 2016
 
The Reconstruction Of Executive Incentives
The Reconstruction Of Executive IncentivesThe Reconstruction Of Executive Incentives
The Reconstruction Of Executive Incentives
 
Underwater Equity
Underwater EquityUnderwater Equity
Underwater Equity
 
Esg Reporting Guide
Esg Reporting GuideEsg Reporting Guide
Esg Reporting Guide
 
UN SDGs Sustainability Impacts Practices and Assessment KPIs
UN SDGs Sustainability Impacts Practices and Assessment KPIsUN SDGs Sustainability Impacts Practices and Assessment KPIs
UN SDGs Sustainability Impacts Practices and Assessment KPIs
 
Cedar ESG Global Equities
Cedar ESG Global EquitiesCedar ESG Global Equities
Cedar ESG Global Equities
 
Material Engagement
Material Engagement Material Engagement
Material Engagement
 
Growth is every CEO's challenge - Deloitte Consulting Presentation
Growth is every CEO's challenge - Deloitte Consulting PresentationGrowth is every CEO's challenge - Deloitte Consulting Presentation
Growth is every CEO's challenge - Deloitte Consulting Presentation
 
London 2015 Speaker Slide Template 16-9 FINAL copy
London 2015 Speaker Slide Template 16-9 FINAL copyLondon 2015 Speaker Slide Template 16-9 FINAL copy
London 2015 Speaker Slide Template 16-9 FINAL copy
 
ESG engagement inisghts (v 1.1)
ESG engagement inisghts (v 1.1)ESG engagement inisghts (v 1.1)
ESG engagement inisghts (v 1.1)
 
ESG integration in Equities and Fixed Income
ESG integration in Equities and Fixed IncomeESG integration in Equities and Fixed Income
ESG integration in Equities and Fixed Income
 
Artifex guide to succesful esg investing
Artifex guide to succesful esg investingArtifex guide to succesful esg investing
Artifex guide to succesful esg investing
 
Partnerships: Engaging American Manufacturers
Partnerships: Engaging American ManufacturersPartnerships: Engaging American Manufacturers
Partnerships: Engaging American Manufacturers
 
018-019_IW_1212
018-019_IW_1212018-019_IW_1212
018-019_IW_1212
 
Barclays ESG_Brochure_US_18_small Sustainable Investing and bond returns NOV ...
Barclays ESG_Brochure_US_18_small Sustainable Investing and bond returns NOV ...Barclays ESG_Brochure_US_18_small Sustainable Investing and bond returns NOV ...
Barclays ESG_Brochure_US_18_small Sustainable Investing and bond returns NOV ...
 
Financing Tools for a Green Building Stock
Financing Tools for a Green Building StockFinancing Tools for a Green Building Stock
Financing Tools for a Green Building Stock
 
Governance Past Present Future
Governance Past Present FutureGovernance Past Present Future
Governance Past Present Future
 
Real Estate Lending and Sustainability: The Business Case for Risk Management...
Real Estate Lending and Sustainability: The Business Case for Risk Management...Real Estate Lending and Sustainability: The Business Case for Risk Management...
Real Estate Lending and Sustainability: The Business Case for Risk Management...
 

Similar to Five Strategic Priorities: Generation and Transmission Cooperatives

Gaining Access to Capital Markets
Gaining Access to Capital MarketsGaining Access to Capital Markets
Gaining Access to Capital MarketsScottMadden, Inc.
 
Deloitte_JCAmado_ClimateResilienceReadinessIndex_Aug25_08072014FINAL
Deloitte_JCAmado_ClimateResilienceReadinessIndex_Aug25_08072014FINALDeloitte_JCAmado_ClimateResilienceReadinessIndex_Aug25_08072014FINAL
Deloitte_JCAmado_ClimateResilienceReadinessIndex_Aug25_08072014FINALGlobal Risk Forum GRFDavos
 
The Reinvention Reset | Accenture
The Reinvention Reset | AccentureThe Reinvention Reset | Accenture
The Reinvention Reset | Accentureaccenture
 
OECD presentation - Financing the energy transition in emerging and developin...
OECD presentation - Financing the energy transition in emerging and developin...OECD presentation - Financing the energy transition in emerging and developin...
OECD presentation - Financing the energy transition in emerging and developin...OECD Environment
 
Benchmarking for Natural Gas LDCs
Benchmarking for Natural Gas LDCsBenchmarking for Natural Gas LDCs
Benchmarking for Natural Gas LDCsScottMadden, Inc.
 
DEMYSTIFYING CLIMATE TRANSITION SCENARIOS - Ryan Whisnant
DEMYSTIFYING CLIMATE TRANSITION SCENARIOS - Ryan WhisnantDEMYSTIFYING CLIMATE TRANSITION SCENARIOS - Ryan Whisnant
DEMYSTIFYING CLIMATE TRANSITION SCENARIOS - Ryan WhisnantGreenBiz Group
 
2015 Sustainability Report Investors' Conference Call
2015 Sustainability Report Investors' Conference Call2015 Sustainability Report Investors' Conference Call
2015 Sustainability Report Investors' Conference CallTeckResourcesLtd
 
The Business of Sustainability
The Business of SustainabilityThe Business of Sustainability
The Business of SustainabilityMichael Jordan
 
Investing in CSR: From Wall St to Main St - Harvard Kennedy School CSRI Visit...
Investing in CSR: From Wall St to Main St - Harvard Kennedy School CSRI Visit...Investing in CSR: From Wall St to Main St - Harvard Kennedy School CSRI Visit...
Investing in CSR: From Wall St to Main St - Harvard Kennedy School CSRI Visit...Graham Sinclair
 
Adelman initiates SKWS as a BUY
Adelman initiates SKWS as a BUYAdelman initiates SKWS as a BUY
Adelman initiates SKWS as a BUYDane Adelman
 
Deloitte stay ahed of the game
Deloitte stay ahed of the gameDeloitte stay ahed of the game
Deloitte stay ahed of the gameFranco Ferrario
 
Deloitte stay ahed of the game
Deloitte stay ahed of the gameDeloitte stay ahed of the game
Deloitte stay ahed of the gameFranco Ferrario
 
Credit: A Core Building Block for DB Schemes Investing in a Low Yield Environ...
Credit: A Core Building Block for DB Schemes Investing in a Low Yield Environ...Credit: A Core Building Block for DB Schemes Investing in a Low Yield Environ...
Credit: A Core Building Block for DB Schemes Investing in a Low Yield Environ...Redington
 
SEC Bootcamp with Deloitte
SEC Bootcamp with DeloitteSEC Bootcamp with Deloitte
SEC Bootcamp with DeloitteGreenBiz Group
 
Business Responsibility Reporting
Business Responsibility ReportingBusiness Responsibility Reporting
Business Responsibility ReportingRSM GC
 
Webinar: The New Consumers of Utility Data
Webinar: The New Consumers of Utility DataWebinar: The New Consumers of Utility Data
Webinar: The New Consumers of Utility DataUrjanet
 
03 09-15 march investor presentation final
03 09-15 march investor presentation final03 09-15 march investor presentation final
03 09-15 march investor presentation finalAES_BigSky
 
Capital and infrastructure solution brochure Single FINAL
Capital and infrastructure solution brochure Single FINALCapital and infrastructure solution brochure Single FINAL
Capital and infrastructure solution brochure Single FINALChristopher Matthews
 

Similar to Five Strategic Priorities: Generation and Transmission Cooperatives (20)

Gaining Access to Capital Markets
Gaining Access to Capital MarketsGaining Access to Capital Markets
Gaining Access to Capital Markets
 
Deloitte_JCAmado_ClimateResilienceReadinessIndex_Aug25_08072014FINAL
Deloitte_JCAmado_ClimateResilienceReadinessIndex_Aug25_08072014FINALDeloitte_JCAmado_ClimateResilienceReadinessIndex_Aug25_08072014FINAL
Deloitte_JCAmado_ClimateResilienceReadinessIndex_Aug25_08072014FINAL
 
The Reinvention Reset | Accenture
The Reinvention Reset | AccentureThe Reinvention Reset | Accenture
The Reinvention Reset | Accenture
 
OECD presentation - Financing the energy transition in emerging and developin...
OECD presentation - Financing the energy transition in emerging and developin...OECD presentation - Financing the energy transition in emerging and developin...
OECD presentation - Financing the energy transition in emerging and developin...
 
Benchmarking for Natural Gas LDCs
Benchmarking for Natural Gas LDCsBenchmarking for Natural Gas LDCs
Benchmarking for Natural Gas LDCs
 
DEMYSTIFYING CLIMATE TRANSITION SCENARIOS - Ryan Whisnant
DEMYSTIFYING CLIMATE TRANSITION SCENARIOS - Ryan WhisnantDEMYSTIFYING CLIMATE TRANSITION SCENARIOS - Ryan Whisnant
DEMYSTIFYING CLIMATE TRANSITION SCENARIOS - Ryan Whisnant
 
2015 Sustainability Report Investors' Conference Call
2015 Sustainability Report Investors' Conference Call2015 Sustainability Report Investors' Conference Call
2015 Sustainability Report Investors' Conference Call
 
The Business of Sustainability
The Business of SustainabilityThe Business of Sustainability
The Business of Sustainability
 
Investing in CSR: From Wall St to Main St - Harvard Kennedy School CSRI Visit...
Investing in CSR: From Wall St to Main St - Harvard Kennedy School CSRI Visit...Investing in CSR: From Wall St to Main St - Harvard Kennedy School CSRI Visit...
Investing in CSR: From Wall St to Main St - Harvard Kennedy School CSRI Visit...
 
Managing Generation Assets
Managing Generation AssetsManaging Generation Assets
Managing Generation Assets
 
Adelman initiates SKWS as a BUY
Adelman initiates SKWS as a BUYAdelman initiates SKWS as a BUY
Adelman initiates SKWS as a BUY
 
Deloitte stay ahed of the game
Deloitte stay ahed of the gameDeloitte stay ahed of the game
Deloitte stay ahed of the game
 
Deloitte stay ahed of the game
Deloitte stay ahed of the gameDeloitte stay ahed of the game
Deloitte stay ahed of the game
 
Credit: A Core Building Block for DB Schemes Investing in a Low Yield Environ...
Credit: A Core Building Block for DB Schemes Investing in a Low Yield Environ...Credit: A Core Building Block for DB Schemes Investing in a Low Yield Environ...
Credit: A Core Building Block for DB Schemes Investing in a Low Yield Environ...
 
SEC Bootcamp with Deloitte
SEC Bootcamp with DeloitteSEC Bootcamp with Deloitte
SEC Bootcamp with Deloitte
 
Business Responsibility Reporting
Business Responsibility ReportingBusiness Responsibility Reporting
Business Responsibility Reporting
 
Webinar: The New Consumers of Utility Data
Webinar: The New Consumers of Utility DataWebinar: The New Consumers of Utility Data
Webinar: The New Consumers of Utility Data
 
03 09-15 march investor presentation final
03 09-15 march investor presentation final03 09-15 march investor presentation final
03 09-15 march investor presentation final
 
Capital and infrastructure solution brochure Single FINAL
Capital and infrastructure solution brochure Single FINALCapital and infrastructure solution brochure Single FINAL
Capital and infrastructure solution brochure Single FINAL
 
Sustainable Energy Roadmaps
Sustainable Energy RoadmapsSustainable Energy Roadmaps
Sustainable Energy Roadmaps
 

More from ScottMadden, Inc.

Creating IT Value-A Better Way to Make IT Investment Decisions
Creating IT Value-A Better Way to Make IT Investment DecisionsCreating IT Value-A Better Way to Make IT Investment Decisions
Creating IT Value-A Better Way to Make IT Investment DecisionsScottMadden, Inc.
 
Benchmarking for Natural Gas LDCs
Benchmarking for Natural Gas LDCsBenchmarking for Natural Gas LDCs
Benchmarking for Natural Gas LDCsScottMadden, Inc.
 
ScottMadden Fossil Benchmarking Analysis
ScottMadden Fossil Benchmarking Analysis ScottMadden Fossil Benchmarking Analysis
ScottMadden Fossil Benchmarking Analysis ScottMadden, Inc.
 
Overcoming the Challenges of Large Capital Programs/Projects
Overcoming the Challenges of Large Capital Programs/ProjectsOvercoming the Challenges of Large Capital Programs/Projects
Overcoming the Challenges of Large Capital Programs/ProjectsScottMadden, Inc.
 
ScottMadden HR Shared Services Benchmarking Study Highlights 2019
ScottMadden HR Shared Services Benchmarking Study Highlights 2019ScottMadden HR Shared Services Benchmarking Study Highlights 2019
ScottMadden HR Shared Services Benchmarking Study Highlights 2019ScottMadden, Inc.
 
ScottMadden Fossil Benchmarking Analysis
ScottMadden Fossil Benchmarking Analysis ScottMadden Fossil Benchmarking Analysis
ScottMadden Fossil Benchmarking Analysis ScottMadden, Inc.
 
ScottMadden Finance Shared Services Benchmark Highlights 2020
ScottMadden Finance Shared Services Benchmark Highlights 2020ScottMadden Finance Shared Services Benchmark Highlights 2020
ScottMadden Finance Shared Services Benchmark Highlights 2020ScottMadden, Inc.
 
The ScottMadden Energy Industry Update Webcast: Everything Counts ... In Larg...
The ScottMadden Energy Industry Update Webcast: Everything Counts ... In Larg...The ScottMadden Energy Industry Update Webcast: Everything Counts ... In Larg...
The ScottMadden Energy Industry Update Webcast: Everything Counts ... In Larg...ScottMadden, Inc.
 
ScottMadden's Energy Industry Update for the 2019 Utility Supply Chain Confer...
ScottMadden's Energy Industry Update for the 2019 Utility Supply Chain Confer...ScottMadden's Energy Industry Update for the 2019 Utility Supply Chain Confer...
ScottMadden's Energy Industry Update for the 2019 Utility Supply Chain Confer...ScottMadden, Inc.
 
Energy Industry Update Webcast: Don't Stop Believin'
Energy Industry Update Webcast: Don't Stop Believin'Energy Industry Update Webcast: Don't Stop Believin'
Energy Industry Update Webcast: Don't Stop Believin'ScottMadden, Inc.
 
Technology for HR Shared Services
Technology for HR Shared ServicesTechnology for HR Shared Services
Technology for HR Shared ServicesScottMadden, Inc.
 
Building a Business Case for Shared Services
Building a Business Case for Shared ServicesBuilding a Business Case for Shared Services
Building a Business Case for Shared ServicesScottMadden, Inc.
 
Fundamentals of Designing, Building, & Implementing a Service Delivery Center
Fundamentals of Designing, Building, & Implementing a Service Delivery CenterFundamentals of Designing, Building, & Implementing a Service Delivery Center
Fundamentals of Designing, Building, & Implementing a Service Delivery CenterScottMadden, Inc.
 
Next Generation Shared Services Centers
Next Generation Shared Services CentersNext Generation Shared Services Centers
Next Generation Shared Services CentersScottMadden, Inc.
 
California’s Combined Cycle Costs in the Age of the Duck Curve
California’s Combined Cycle Costs in the Age of the Duck CurveCalifornia’s Combined Cycle Costs in the Age of the Duck Curve
California’s Combined Cycle Costs in the Age of the Duck CurveScottMadden, Inc.
 
Capital Program Assessment Overview
Capital Program Assessment OverviewCapital Program Assessment Overview
Capital Program Assessment OverviewScottMadden, Inc.
 
Value of Strategic Direction
Value of Strategic DirectionValue of Strategic Direction
Value of Strategic DirectionScottMadden, Inc.
 
Generation Trends: What are the Impacts on Transmission?
Generation Trends: What are the Impacts on Transmission? Generation Trends: What are the Impacts on Transmission?
Generation Trends: What are the Impacts on Transmission? ScottMadden, Inc.
 
The Electric Vehicle Market: Utility Perspective and Considerations for Utili...
The Electric Vehicle Market: Utility Perspective and Considerations for Utili...The Electric Vehicle Market: Utility Perspective and Considerations for Utili...
The Electric Vehicle Market: Utility Perspective and Considerations for Utili...ScottMadden, Inc.
 

More from ScottMadden, Inc. (20)

Creating IT Value-A Better Way to Make IT Investment Decisions
Creating IT Value-A Better Way to Make IT Investment DecisionsCreating IT Value-A Better Way to Make IT Investment Decisions
Creating IT Value-A Better Way to Make IT Investment Decisions
 
Benchmarking for Natural Gas LDCs
Benchmarking for Natural Gas LDCsBenchmarking for Natural Gas LDCs
Benchmarking for Natural Gas LDCs
 
ScottMadden Fossil Benchmarking Analysis
ScottMadden Fossil Benchmarking Analysis ScottMadden Fossil Benchmarking Analysis
ScottMadden Fossil Benchmarking Analysis
 
Overcoming the Challenges of Large Capital Programs/Projects
Overcoming the Challenges of Large Capital Programs/ProjectsOvercoming the Challenges of Large Capital Programs/Projects
Overcoming the Challenges of Large Capital Programs/Projects
 
ScottMadden HR Shared Services Benchmarking Study Highlights 2019
ScottMadden HR Shared Services Benchmarking Study Highlights 2019ScottMadden HR Shared Services Benchmarking Study Highlights 2019
ScottMadden HR Shared Services Benchmarking Study Highlights 2019
 
ScottMadden Fossil Benchmarking Analysis
ScottMadden Fossil Benchmarking Analysis ScottMadden Fossil Benchmarking Analysis
ScottMadden Fossil Benchmarking Analysis
 
ScottMadden Finance Shared Services Benchmark Highlights 2020
ScottMadden Finance Shared Services Benchmark Highlights 2020ScottMadden Finance Shared Services Benchmark Highlights 2020
ScottMadden Finance Shared Services Benchmark Highlights 2020
 
The ScottMadden Energy Industry Update Webcast: Everything Counts ... In Larg...
The ScottMadden Energy Industry Update Webcast: Everything Counts ... In Larg...The ScottMadden Energy Industry Update Webcast: Everything Counts ... In Larg...
The ScottMadden Energy Industry Update Webcast: Everything Counts ... In Larg...
 
ScottMadden's Energy Industry Update for the 2019 Utility Supply Chain Confer...
ScottMadden's Energy Industry Update for the 2019 Utility Supply Chain Confer...ScottMadden's Energy Industry Update for the 2019 Utility Supply Chain Confer...
ScottMadden's Energy Industry Update for the 2019 Utility Supply Chain Confer...
 
Energy Industry Update Webcast: Don't Stop Believin'
Energy Industry Update Webcast: Don't Stop Believin'Energy Industry Update Webcast: Don't Stop Believin'
Energy Industry Update Webcast: Don't Stop Believin'
 
Combined Cycles
Combined CyclesCombined Cycles
Combined Cycles
 
Technology for HR Shared Services
Technology for HR Shared ServicesTechnology for HR Shared Services
Technology for HR Shared Services
 
Building a Business Case for Shared Services
Building a Business Case for Shared ServicesBuilding a Business Case for Shared Services
Building a Business Case for Shared Services
 
Fundamentals of Designing, Building, & Implementing a Service Delivery Center
Fundamentals of Designing, Building, & Implementing a Service Delivery CenterFundamentals of Designing, Building, & Implementing a Service Delivery Center
Fundamentals of Designing, Building, & Implementing a Service Delivery Center
 
Next Generation Shared Services Centers
Next Generation Shared Services CentersNext Generation Shared Services Centers
Next Generation Shared Services Centers
 
California’s Combined Cycle Costs in the Age of the Duck Curve
California’s Combined Cycle Costs in the Age of the Duck CurveCalifornia’s Combined Cycle Costs in the Age of the Duck Curve
California’s Combined Cycle Costs in the Age of the Duck Curve
 
Capital Program Assessment Overview
Capital Program Assessment OverviewCapital Program Assessment Overview
Capital Program Assessment Overview
 
Value of Strategic Direction
Value of Strategic DirectionValue of Strategic Direction
Value of Strategic Direction
 
Generation Trends: What are the Impacts on Transmission?
Generation Trends: What are the Impacts on Transmission? Generation Trends: What are the Impacts on Transmission?
Generation Trends: What are the Impacts on Transmission?
 
The Electric Vehicle Market: Utility Perspective and Considerations for Utili...
The Electric Vehicle Market: Utility Perspective and Considerations for Utili...The Electric Vehicle Market: Utility Perspective and Considerations for Utili...
The Electric Vehicle Market: Utility Perspective and Considerations for Utili...
 

Recently uploaded

How to Use api.constrains ( ) in Odoo 17
How to Use api.constrains ( ) in Odoo 17How to Use api.constrains ( ) in Odoo 17
How to Use api.constrains ( ) in Odoo 17Celine George
 
Education and training program in the hospital APR.pptx
Education and training program in the hospital APR.pptxEducation and training program in the hospital APR.pptx
Education and training program in the hospital APR.pptxraviapr7
 
UKCGE Parental Leave Discussion March 2024
UKCGE Parental Leave Discussion March 2024UKCGE Parental Leave Discussion March 2024
UKCGE Parental Leave Discussion March 2024UKCGE
 
Presentation on the Basics of Writing. Writing a Paragraph
Presentation on the Basics of Writing. Writing a ParagraphPresentation on the Basics of Writing. Writing a Paragraph
Presentation on the Basics of Writing. Writing a ParagraphNetziValdelomar1
 
Easter in the USA presentation by Chloe.
Easter in the USA presentation by Chloe.Easter in the USA presentation by Chloe.
Easter in the USA presentation by Chloe.EnglishCEIPdeSigeiro
 
CAULIFLOWER BREEDING 1 Parmar pptx
CAULIFLOWER BREEDING 1 Parmar pptxCAULIFLOWER BREEDING 1 Parmar pptx
CAULIFLOWER BREEDING 1 Parmar pptxSaurabhParmar42
 
Practical Research 1 Lesson 9 Scope and delimitation.pptx
Practical Research 1 Lesson 9 Scope and delimitation.pptxPractical Research 1 Lesson 9 Scope and delimitation.pptx
Practical Research 1 Lesson 9 Scope and delimitation.pptxKatherine Villaluna
 
Patient Counselling. Definition of patient counseling; steps involved in pati...
Patient Counselling. Definition of patient counseling; steps involved in pati...Patient Counselling. Definition of patient counseling; steps involved in pati...
Patient Counselling. Definition of patient counseling; steps involved in pati...raviapr7
 
How to Make a Field read-only in Odoo 17
How to Make a Field read-only in Odoo 17How to Make a Field read-only in Odoo 17
How to Make a Field read-only in Odoo 17Celine George
 
Human-AI Co-Creation of Worked Examples for Programming Classes
Human-AI Co-Creation of Worked Examples for Programming ClassesHuman-AI Co-Creation of Worked Examples for Programming Classes
Human-AI Co-Creation of Worked Examples for Programming ClassesMohammad Hassany
 
Quality Assurance_GOOD LABORATORY PRACTICE
Quality Assurance_GOOD LABORATORY PRACTICEQuality Assurance_GOOD LABORATORY PRACTICE
Quality Assurance_GOOD LABORATORY PRACTICESayali Powar
 
In - Vivo and In - Vitro Correlation.pptx
In - Vivo and In - Vitro Correlation.pptxIn - Vivo and In - Vitro Correlation.pptx
In - Vivo and In - Vitro Correlation.pptxAditiChauhan701637
 
Ultra structure and life cycle of Plasmodium.pptx
Ultra structure and life cycle of Plasmodium.pptxUltra structure and life cycle of Plasmodium.pptx
Ultra structure and life cycle of Plasmodium.pptxDr. Asif Anas
 
Practical Research 1: Lesson 8 Writing the Thesis Statement.pptx
Practical Research 1: Lesson 8 Writing the Thesis Statement.pptxPractical Research 1: Lesson 8 Writing the Thesis Statement.pptx
Practical Research 1: Lesson 8 Writing the Thesis Statement.pptxKatherine Villaluna
 
Philosophy of Education and Educational Philosophy
Philosophy of Education  and Educational PhilosophyPhilosophy of Education  and Educational Philosophy
Philosophy of Education and Educational PhilosophyShuvankar Madhu
 
CHUYÊN ĐỀ DẠY THÊM TIẾNG ANH LỚP 11 - GLOBAL SUCCESS - NĂM HỌC 2023-2024 - HK...
CHUYÊN ĐỀ DẠY THÊM TIẾNG ANH LỚP 11 - GLOBAL SUCCESS - NĂM HỌC 2023-2024 - HK...CHUYÊN ĐỀ DẠY THÊM TIẾNG ANH LỚP 11 - GLOBAL SUCCESS - NĂM HỌC 2023-2024 - HK...
CHUYÊN ĐỀ DẠY THÊM TIẾNG ANH LỚP 11 - GLOBAL SUCCESS - NĂM HỌC 2023-2024 - HK...Nguyen Thanh Tu Collection
 
The basics of sentences session 10pptx.pptx
The basics of sentences session 10pptx.pptxThe basics of sentences session 10pptx.pptx
The basics of sentences session 10pptx.pptxheathfieldcps1
 
Drug Information Services- DIC and Sources.
Drug Information Services- DIC and Sources.Drug Information Services- DIC and Sources.
Drug Information Services- DIC and Sources.raviapr7
 
The Singapore Teaching Practice document
The Singapore Teaching Practice documentThe Singapore Teaching Practice document
The Singapore Teaching Practice documentXsasf Sfdfasd
 

Recently uploaded (20)

How to Use api.constrains ( ) in Odoo 17
How to Use api.constrains ( ) in Odoo 17How to Use api.constrains ( ) in Odoo 17
How to Use api.constrains ( ) in Odoo 17
 
Education and training program in the hospital APR.pptx
Education and training program in the hospital APR.pptxEducation and training program in the hospital APR.pptx
Education and training program in the hospital APR.pptx
 
UKCGE Parental Leave Discussion March 2024
UKCGE Parental Leave Discussion March 2024UKCGE Parental Leave Discussion March 2024
UKCGE Parental Leave Discussion March 2024
 
Presentation on the Basics of Writing. Writing a Paragraph
Presentation on the Basics of Writing. Writing a ParagraphPresentation on the Basics of Writing. Writing a Paragraph
Presentation on the Basics of Writing. Writing a Paragraph
 
Easter in the USA presentation by Chloe.
Easter in the USA presentation by Chloe.Easter in the USA presentation by Chloe.
Easter in the USA presentation by Chloe.
 
CAULIFLOWER BREEDING 1 Parmar pptx
CAULIFLOWER BREEDING 1 Parmar pptxCAULIFLOWER BREEDING 1 Parmar pptx
CAULIFLOWER BREEDING 1 Parmar pptx
 
Practical Research 1 Lesson 9 Scope and delimitation.pptx
Practical Research 1 Lesson 9 Scope and delimitation.pptxPractical Research 1 Lesson 9 Scope and delimitation.pptx
Practical Research 1 Lesson 9 Scope and delimitation.pptx
 
Patient Counselling. Definition of patient counseling; steps involved in pati...
Patient Counselling. Definition of patient counseling; steps involved in pati...Patient Counselling. Definition of patient counseling; steps involved in pati...
Patient Counselling. Definition of patient counseling; steps involved in pati...
 
How to Make a Field read-only in Odoo 17
How to Make a Field read-only in Odoo 17How to Make a Field read-only in Odoo 17
How to Make a Field read-only in Odoo 17
 
Human-AI Co-Creation of Worked Examples for Programming Classes
Human-AI Co-Creation of Worked Examples for Programming ClassesHuman-AI Co-Creation of Worked Examples for Programming Classes
Human-AI Co-Creation of Worked Examples for Programming Classes
 
Quality Assurance_GOOD LABORATORY PRACTICE
Quality Assurance_GOOD LABORATORY PRACTICEQuality Assurance_GOOD LABORATORY PRACTICE
Quality Assurance_GOOD LABORATORY PRACTICE
 
In - Vivo and In - Vitro Correlation.pptx
In - Vivo and In - Vitro Correlation.pptxIn - Vivo and In - Vitro Correlation.pptx
In - Vivo and In - Vitro Correlation.pptx
 
Ultra structure and life cycle of Plasmodium.pptx
Ultra structure and life cycle of Plasmodium.pptxUltra structure and life cycle of Plasmodium.pptx
Ultra structure and life cycle of Plasmodium.pptx
 
Practical Research 1: Lesson 8 Writing the Thesis Statement.pptx
Practical Research 1: Lesson 8 Writing the Thesis Statement.pptxPractical Research 1: Lesson 8 Writing the Thesis Statement.pptx
Practical Research 1: Lesson 8 Writing the Thesis Statement.pptx
 
Philosophy of Education and Educational Philosophy
Philosophy of Education  and Educational PhilosophyPhilosophy of Education  and Educational Philosophy
Philosophy of Education and Educational Philosophy
 
Finals of Kant get Marx 2.0 : a general politics quiz
Finals of Kant get Marx 2.0 : a general politics quizFinals of Kant get Marx 2.0 : a general politics quiz
Finals of Kant get Marx 2.0 : a general politics quiz
 
CHUYÊN ĐỀ DẠY THÊM TIẾNG ANH LỚP 11 - GLOBAL SUCCESS - NĂM HỌC 2023-2024 - HK...
CHUYÊN ĐỀ DẠY THÊM TIẾNG ANH LỚP 11 - GLOBAL SUCCESS - NĂM HỌC 2023-2024 - HK...CHUYÊN ĐỀ DẠY THÊM TIẾNG ANH LỚP 11 - GLOBAL SUCCESS - NĂM HỌC 2023-2024 - HK...
CHUYÊN ĐỀ DẠY THÊM TIẾNG ANH LỚP 11 - GLOBAL SUCCESS - NĂM HỌC 2023-2024 - HK...
 
The basics of sentences session 10pptx.pptx
The basics of sentences session 10pptx.pptxThe basics of sentences session 10pptx.pptx
The basics of sentences session 10pptx.pptx
 
Drug Information Services- DIC and Sources.
Drug Information Services- DIC and Sources.Drug Information Services- DIC and Sources.
Drug Information Services- DIC and Sources.
 
The Singapore Teaching Practice document
The Singapore Teaching Practice documentThe Singapore Teaching Practice document
The Singapore Teaching Practice document
 

Five Strategic Priorities: Generation and Transmission Cooperatives

  • 1. Copyright © 2012 by ScottMadden. All rights reserved. Five Strategic Priorities for Generation and Transmission Cooperatives Winter 2012 Contact: Brad Kitchens (sbkitchens@scottmadden.com) Marc Miller (mdmiller@scottmadden.com)
  • 2. Copyright © 2012 by ScottMadden. All rights reserved. Introduction Generation and Transmission cooperatives face a rapidly changing business outlook with complex and high-stakes challenges on many fronts. We believe these organizations must address five strategic priorities to confront the future with confidence. This insight provides a summary for a five-part series that ScottMadden will publish. 1 Managing Generation Assets Ensuring Grid Security and Reliability Gaining Access to Capital Markets Improving the Effectiveness of Stakeholder Management Fostering Economic Development
  • 3. Copyright © 2012 by ScottMadden. All rights reserved. 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 (MW) Top Cooperatives CurrentGeneration Capacity by Fuel Type Hydro Renewable Natural Gas Coal Managing Generation Assets 2 The management of generation assets, never easy, is even more challenging in today’s environment of volatile commodity prices, aging infrastructure, environmental mandates, and regulatory and capital market uncertainty. Almost half of the total MW capacity of top cooperatives* is coal. Establishing a formal approach to portfolio lifecycle optimization is becoming critical. Physical Assets Life Cycle Costs Resource Optimization Risk Asset Value Ensuring assets operate at design parameters with minimal off-normal operations Optimizing initial and ongoing investment to maximize an asset’s value over its life cycle Maximizing the contribution from those who manage the asset through review of performance Managing engineering, operational, and financial risk Developing additional value from physical assets and management/operational competencies DescriptionComponent Gas  Impact of the “rush to gas” on future demand (and prices)  Environmental pressures on shale gas extraction Coal  Regulatory uncertainty  Environmental pressure  Feasibility of retiring older units Nuclear  Long development time and higher project schedule risk  Uneasiness about future capital costs and current economics (low gas price)  Environmental scrutiny (e.g., on spent fuel) Wind  Extent and timing of renewable energy standards  Low capacity factor and intermittency  Geographic constraints and transmission availability Each resource type has key issues that complicate resource planning: The lifecycle value of a portfolio can be optimized through a comprehensive asset management strategy. *Defined here as those with assets more than $1 billion or annual revenue more than $500 million
  • 4. Copyright © 2012 by ScottMadden. All rights reserved. $47.4 $57.2 $49.0 $43.0 $41.1 $48.4 $59.9 $74.1 $82.8 $77.6 $74.2 $- $10 $20 $30 $40 $50 $60 $70 $80 $90 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 $Billions AnnualCapitalExpenditures Gaining Access to Capital Markets 3 0% 20% 40% 60% 80% 100% 120% Debt(%) Topcooperatives Debt/ Capitalization - 0.50 1.00 1.50 2.00 2.50 Ratio(X) Topcooperatives DebtService CoverageRatio  A median DSC ratio of 1.31x is within the range of a Fitch study in which ratios of public power firms rated AA or A ranged from 1.25x to 1.7x from 2005 to 2009*  Relatively high debt levels (a median of 86% of total capitalization) reflect the large balance sheets and low risk profile of most cooperatives *Sources: SNL Financial and EEI Finance Department, U.S. Public Power Peer Study June 16, 2010 **Defined here as those with assets more than $1 billion or annual revenue more than $500 million  Total property, plant and equipment jumped nearly 20% in the past six years, from $816B in 2005 to $998B in 2010*  Annual capital expenditures at investor- owned utilities have grown from $47B in 2000 to $74B in 2010 Regulatory & Legislative Environment  Strong rate-making ability or positive regulatory relationships  Consistent engagement with key stakeholders Business & Economic Environment  A diverse and growing service area  Community support for conservation and investments in efficiency Management & Operations  Experienced and effective leadership  Competitive operational performance  A diverse and low cost resource mix Financial Performance  Strong historical financials, including balance sheet stability, appropriate debt- service ratios, and sufficient liquidity Dimensions of Business Strength How Do Capital Markets Judge Cooperatives? With potentially costly environmental upgrades on the horizon and the need to increase capacity over the long term, capital needs continue to rise. What is driving Cooperatives to Access Capital Markets?  At the same time, RUS financing is declining and becoming more restrictive — RUS financing was $7.5B in 2008, and estimated to be only $6.1B in 2012, a $1.4B decrease The 21 top cooperatives** demonstrated the following financial characteristics in 2010:
  • 5. Copyright © 2012 by ScottMadden. All rights reserved. Ensuring Grid Security and Reliability 4 In 2008, FERC gave NERC the power to establish mandatory bulk power system requirements for security and reliability and to audit compliance and levy fines. Since then, NERC standards and requirements have grown and are growing. NERC Compliance Maturity Model Ongoing Compliance  Continuous cycle (as standards evolve, procedures are updated and personnel are trained)  Demonstrated culture of compliance  Active regulatory relationships Integration and Automation  Requirements coordinated by all business units  Documents managed electronically  Workflow and metrics automated Accountability  Dedicated compliance organization established  Individual standard owners assigned Defined Processes  Compliance requirements defined  Mitigation activities established HighLow Maturity Level Top 10 Violations (March 2010 – March 2011)  Top companies are working to ensure that their organizations can evolve to meet changing NERC and FERC priorities  In 2012 and beyond, NERC will use a risk-based approach to reliability, including a heavy focus on Critical Infrastructure Protection (CIP) standards — 8 of the top 10 standards violated, and 80% of total violations, are CIP  In addition to managing key reliability metrics, companies should also build a mature and effective compliance program  Compliance programs are most effective when they impact multiple dimensions of an organization, including: — Organizational Structure — Standards Development — Employee Training — Program management — Risk management — Systems and Processes — Technology Management Rulemaking and Enforcement is Evolving
  • 6. Copyright © 2012 by ScottMadden. All rights reserved. Fostering Economic Development 5 Cooperatives can be powerful drivers of economic development for their communities. In spite of competing demands on financial resources, economic development is a perennial top priority at best-in-class companies, with the most successful sharing a few common characteristics  Visible and Accountable Leadership: Support for initiatives is maintained throughout the organization, leadership is accountable, and progress is reviewed and communicated regularly  Consistent and Significant Resources: Every year, substantial technical, financial, and human resources are dedicated to fostering economic development  Focused and Measurable Objectives: Customized initiatives, with clear goals, are designed based on a broad set of proven approaches Required Commitment Data and Analytical Resources  Site Selection/Certification: Providing access to geographic information systems (GIS)  Economic Data: Providing access to analysis of industry sectors, demographic data, economic trends, and electric usage estimates  Publications: Publishing documents or periodicals addressing local or regional economic concerns Planning and Development Management  Engineering and Project Management: Providing engineering services for site evaluation and planning, or project managers to navigate the site development process  Strategic and Community Plan Assistance: Enabling communities to direct change through assistance with evaluating resources and objectives Community and Industry Collaboration  Funds: Creating funds for economic development, job creation, or the enhancement of infrastructure  Grants: Awarding development grants to deserving entities  Incentives: Providing businesses with incentives to conserve or improve energy efficiency  Educational Programs: Working with local colleges to create educational sessions or comprehensive grant programs Impact How Do Top Performing Companies Approach Economic Development?
  • 7. Copyright © 2012 by ScottMadden. All rights reserved. Improving the Effectiveness of Stakeholder Management Cooperatives face unique governance challenges: while working to meet the expectations of investors, voters, citizens, and government entities, they must also work to preserve transparency and member control. 6 Cooperatives Face A Balancing Act  Promotes transparency and collaboration among stakeholders and the utility  Incorporates stakeholder input into strategic planning decisions  Fosters stakeholder understanding of planning constraints and viewpoints  Establishes stakeholder “buy-in” and support of the planning process  Increases support from policy and rate-making authorities An Effective Stakeholder Management Plan  Conflicting stakeholder expectations and financial and strategic constraints combine to form a challenging landscape Clean Energy Advocates Environmental Advocates Retail Customers Wholesale Customers Academia Generation Partners Governments at All Levels Financial Analysts Stakeholder Engagement Chambers of Commerce Misc. Business Interests Expectations Constraints Higher material and labor costs Decreases in demand Aging infrastructure and regulatory uncertainty Volatile commodity prices Investment in renewable energy Environmental improvements Sustained earnings growth Low rates and reliable power
  • 8. Copyright © 2012 by ScottMadden. All rights reserved. Contact Us ScottMadden has undertaken numerous consulting projects for cooperatives across the country. If you are interested in learning more about strategic priorities for Generation and Transmission Cooperatives, please contact us. Brad Kitchens President and CEO ScottMadden, Inc. 3495 Piedmont Rd, Bldg 10 Suite 805 Atlanta, GA 30305 Phone: 404-814-0020 sbkitchens@scottmadden.com Marc Miller Director ScottMadden, Inc. 3495 Piedmont Rd, Bldg 10 Suite 805 Atlanta, GA 30305 Phone: 404-814-0020 mdmiller@scottmadden.com