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COMPETITIVE PROPOSAL TO PROVIDE A MARKETING, FINANCIAL AND MANAGEMENT REVIEW OF THE CLEARWATER GAS SYSTEM · ANAGEMENT CONSULTING I COMPETITIVE PROPOSAL TO PROVIDE A MARKETING, FINANCIAL AND MANAGEMENT REVIEW OF THE CLEARWATER GAS SYSTEM FOR THE City of Clearwater, Florida ] J J J J J J II I" ": ~ ~!;Rl ~&~ ~~taIGI ~~~~". t: ~ ll!Jl1 ~ ." I,. 'I': I I I I I I I I I I I I I I I I I I I ~ BLACK & VEATCH 201 South Orange Avenue, Suite 500, Orlando, Florida 32801, (407)419-3500, Fax: (4071 419-3501 July 5, 1996 Mr. George McKibben Purchasing Manager City of Clearwater 100 S. Myrtle Avenue Clearwater, Florida 34616-5520 RE: Request for Proposal to Perform a "Strategic Plan Review Involving the Marketing, Financial, and Management of the Clearwater Gas System" Dear Mr. McKibben: Black & Veatch, in association with Barakat & Chamberlin, Inc., is pleased to submit this proposal to perform a Marketing, Financial, and Management Review of the Clearwater Gas System (CGS) Strategic Plan. As management, marketing, and financial consultants to public and private energy utilities across the nation, we possess excellent credentials in providing strategic assessments for our clients. We know the gas industry, the competitive environment in which CGS must operate, and the day-to-day management and operating practices, tools, and policies used by successful gas utilities comparable to CGS. We believe this expeliise and knowledge can benefit both the City of Clearwater (City) and CGS in this important assignment. Our approach to evaluating a strategic plan is based on the clear and focused principles which we utilize in preparing such plans for utilities. These include: 1. The strategic plan must be customer-focused in order to provide competitive value. 2. The strategic plan must scrutInIZe the business functions over which the utility has direct control (e.g., price, market, sales, and levels of customer service) and weigh the current and future impacts of external factors over which the utility does not have direct control (e.g., economic, demographic, regulatory, societal, technical and political). I I I I I I I I I I I I I I I I I I I Mr. George McKibben Page 2 July 5, 1996 3. The strategic plan must be conducted in a collaborative manner which encourages creative input from both management, staff, and possibly other entities external to the organization. 4. The final strategic plan must be supported by both management and staff in order to maximize future benefits. As client liaison on this assignment, I will be responsible for providing the City with updates and progress reports as well as assuring client satisfaction throughout the study. I will also be assisting Mr. Mike Metzler who we have assigned as Project Manager for this assignment. Mr. Metzler will provide direction and coordination for our project team. He and I will both be responsible for ensuring that you receive the quality end product you deserve. We invite you to review our proposal to assist the City with this important assignment. If you have any questions or require further information, please contact me at (407) 419- 3500 or (407) 419-3576 (direct line). We appreciate the opportunity to submit this proposal and would consider it a privilege to be of service to the City of Clearwater. Very truly yours, Ga Penland Paschall, Ph.D. Executive Consultant GPP:lkm Enclosure I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Contents Overview Project Approach Introduction Objective Approach Work Plan Strategic Assessment Task 1 - Project Initiation Meeting Task 2 - Conduct Management Interviews Task 3 - Preliminary Evaluation of Strategic and Marketing Plan Task 4 - Conduct Workshop No.1 with Management Task 5 - Conduct a High Level Management and Organizational Assessment Task 6 - Conduct High Level Marketing Plan Assessment Task 7 - Conduct Financial Assessment Task 8 - Develop Benchmark Criteria and Perform Assessment With Comparable Utilities Task 9 - Conduct Workshop No.2 With Management Task 10 - Conduct Public Hearings Qualifications Black & Veatch Management Consulting Division Energy Utilities Qualifications Strategic Business Planning Utility Strengthening Services Rate Studies Barakat & Chamberlin Strategic Business and Market Planning Strategic Fuels Pricing Utility Bidding Program Assistance Strategic Pricing and Rates Experience and References Black & Veatch Barakat & Chamberlin References Page A-I B-1 B-1 B-1 B-1 C-l C-l C-l C-l C-2 C-2 C-2 C-3 C-3 C-3 C-4 C-4 D-l D-l D-4 D-6 D-6 D-7 D-lO D-ll D-ll D-ll D-ll D-ll E-l E-l E-17 E-24 ~ Management Consulting 1156 TC-1 I I City of Clearwater, Florida Contents I Page Key Professional Personnel F-l I Black & Veatch F-l Barakat & Chamberlin F-2 I Litigation History 0-1 Black & Veatch 0-1 Bodily Injury Claims 0-1 I Construction Claims 0-1 Barakat & Chamberlin 0-2 I Timeframe H-l Estimated Budget 1-1 I I I I I I I I I I I I ~ Management Consulting TC-2 1156 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Overview The City of Clearwater (City) owns and operates Clearwater Gas System (CGS). CGS is an underground pipe natural gas and liquid petroleum (LP) local distribution company (LDC) which commenced service in 1923. Originally, CGS manufactured gas from coal and coke. The manufacture of gas was discontinued in 1959 at which time CGS began taking natural gas from the Florida Gas Transmission (FGT) pipeline. The current contract between CGS and FGT includes a peak throughput of 12,000 MMBTU/day. CGS generates approximately $16 million in revenues annually and maintains a payroll of 96 employees. CGS currently serves approximately 13,000 customers in and around the City including thirteen (13) municipalities; the unincorporated areas of northern Pinellas County; and, southwestern Pasco County. The total service area of CGS includes 252 square miles; an area with a population in excess of 600,000 residents. The Pinellas County service area spans 135 square miles. CGS is currently in the process of extending its gas mains and services into a 117 square mile service area in southwestern Pasco County. CGS's territory is bordered on the south, east and north by Peoples Gas System, Inc. (Peoples Gas). Peoples Gas is an investor-owned gas utility and the largest LDC (ranked by number of customers) in the State of Florida. During the past year or so, CGS has begun an expansion program aimed at accelerating its customer saturation within Pinellas County while also expanding its customer base within southwestern Pasco County. A Strategic Business Plan was adopted for CGS in 1993 and updated in 1995. The City Commission is currently seeking an independent consulting firm, with both gas and marketing experience, to review, assess and evaluate the financial and marketing reasonable- ness of the current Strategic Business Plan for CGS. The review will include: 1. A clear identification of the intermediate and long-term impacts of the Plan. 2. An evaluation of the financial, operational (including organizational structure and reporting relationships), marketing and management efficiency and effectiveness of CGS. 3. An evaluation of CGS objectives, goals and productivity indicators relative to the gas industry and CGS target market. We have prepared a project approach and work plan designed specifically to meet the needs of the City in this endeavor. Sections B and C of our proposal contain a detailed project approach and work plan for this assignment. The qualifications of Black & Veatch and Barakat & Chamberlin are outlined in Section D. Our experience with and references from similar evaluations for other utilities are included in Section E. The credentials of our project team are outlined in Section F. Section G presents the our litigation history. The project ~ Management Consulting 1156 A-1 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Overview schedule and our cost proposal are discussed in Sections H and I, respectively. A copy of our standard consulting services agreement in included in Appendix 1. Appendix II contains detailed resumes for our professional staff and project team. ~ Management Consulting 1156 A-2 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Project Approach Introduction The challenges facing municipally-owned energy utilities as we move toward the twenty-first century are enormous and expanding at an ever increasing pace. Customers' demands for increased levels of service at lower costs, the need to respond to the communities' economic development plans, deregulation, and increased competition require the successful utility to establish, review, and update their strategic plans based on solid business and marketing principles while not losing sight of the governmental nature of its organization. A strategic business plan, including a marketing element, forged through a collaborative effort of management and staff assisted by a knowledgeable consultant and reinforced with input from external stakeholders can ensure the utility's foundation for the future. Objective The primary objective of this study's review is to determine if the current strategic business plan and the associated financial, marketing, operational, and management elements included in the plan are appropriate and provide maximum benefits to CGS and the City. This review will entail an evaluation of CGS' s current financial strategic plan, marketing plan, operational and organizational effectiveness, management practices and policies, and competitive position with their comparable utilities. The results of our studies will be summarized in a final report which will include specific recommendations and associated action plan. Organizational structure has become an important factor in reviews conducted by bond rating agencies and the financial markets. It can have a profound effect on both bond ratings and interest rates for a utility's debt. We recognize that numerous structures are utilized by utilities and have worked for utilities with various corporate structures and governance situations. With this experience, we will guide and advise the City on appropriate alternatives for CGS. The study will focus attention on the priorities of CGS and the manner in which it currently responds to those priorities through its programs and resources. The resulting action plan will serve as a guide for both management and staff and provide a well-developed and clearly- presented plan that outlines the utility's future initiatives to parties external to the organization including: representatives of City government, customers, and possibly future debt investors of the system. Approach To be effective and maximize future benefits, a strategic assessment and resulting action plan must assist CGS in making its resulting vision, goals, objectives, and strategies an integral ~ Management Consulting 1156 B-1 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Project Approach part of all levels of management, staff, and operation. From experience, three principles are critical to this process: 1. There must be a resulting shared VISIOn of the goals within the CGS organization. Organizations which are driven by clear purposes, shared values, and specific goals and objectives have a greater capacity for success than those which lack this common and shared direction. 2. There should be a common understanding of available resources, the operating environment and the principles upon which the strategies and organizational efforts will be based. 3. There should be an across-the-board acceptance of the direction and urgency of the strategies and implementation plans, and support for the direction they require. The Black & Veatch project team does not believe there is a universal or "cookbook" method for performance of a strategic assessment. We believe that the project approach and work plan employed during the process needs to be specifically tailored to the client's current business situation, expressed study outcomes and expectations, and internal resource limitations. Based on the City's stated needs, we propose the following general activities. · Assess the appropriateness of the current Strategic Plan based on changes occurring within the industry, overall effectiveness and rewards, and potential for implementation. · Review and assess the appropriateness of the marketing efforts being undertaken in support of the current strategic plan, the area's overall growth, and other energy sources available within the area. · Review and evaluate CGS' s existing financial status along with the projections made as part of the current strategic plan. · Determine the current level of service being provided customers. · Analyze CGS' s competitive position, marketing approach, and ability to acquire additional market share. · Analyze CGS's goals and objectives relative to other natural gas systems. · Evaluate the management efficiency and effectiveness of CGS. ~ Management Consulting 1156 B-2 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Project Approach . Compare various operational performance standards and financial ratios with other like-sized natural gas operations. . Analyze the methodology used to obtain capital financing for system expansIOn. · Analyze organizational structure and reporting relationships. · Prepare appropriate recommendations. The study approach will recognize all internal and external factors which impact CGS' s management, marketing, and operations. Finally, the study will be conducted in a collaborative manner with both management and staff in order to enhance the future benefits of the study for the City and CGS. ~ Management Consulting 1156 B-3 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Work Plan This section presents our detailed work plan for the performance of an evaluation of the Strategic Plan. Major tasks to be accomplished include: · Needs Assessment · Current Plans Assessment · Defining and/or Redefining Intermediate and Long-term Goals, Objectives, and Strategies Strategic Assessment The objective of this study is to assist the City in the definition and/or redefinition of CGS' s intermediate and long-term goals, objectives, and strategies based upon the results of a needs assessment, review of current strategic and marketing plans, and comparative operations analysis with other similar utilities. The results of this study will drive the development and adoption of an action plan for implementation of enhancements to meet redefined goals, objectives, and strategies. In order to perform a productive strategic assessment of the current strategic and marketing plans, we will require knowledge regarding CGS's current perceived strengths, weaknesses, opportunities and threats. Information assembled in this task will be used to evaluate whether the current plan promotes the strengths of the organization, addresses the weaknesses, enhances its opportunities, and considers perceived current and future threats whether competitive or other. Task 1 - Project Initiation Meeting The purposes of the project initiation meeting are: 1. Review with management the project approach and work plan for understanding (and modification, if desired). 2. Establish clear goals and objectives for the study. 3. Establish communication and resource links within CGS. 4. Schedule management interviews. The project team at the conclusion of this meeting will prepare a memorandum summarizing all discussions. A list of basic data needs for the study will be submitted prior to this meeting and will be supplemented as the study progresses. Task 2 - Conduct Management Interviews The purpose of these interviews is to identify, from a management perspective, the perceived strengths, weaknesses, opportunities, and threats facing CGS. In addition, discussions will Ii) Management Consulting 1156 C-1 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Work Plan be held to address the current strategic and marketing plans. The results of the interviews will be summarized by the project team in a format that can be used for subsequent discussions and decision making purposes. Task 3 - Preliminary Evaluation of Strategic and Marketing Plan Based on the information gathered for completing the above tasks, the project team will perform a preliminary assessment of CGS' s strategic and marketing plans. The purpose of this preliminary assessment is to identify areas of strengths and weaknesses within the current plans and other items to be addressed which may enhance the value of the plans for the future. The intent of the review is to assist CGS in preparing for and responding to the challenges and opportunities created by increased competition, rapidly changing markets, and deregulation. To maintain market share in this changing environment, CGS must offer and price services that reflect how customers value such services when compared to other providers. Task 4 - Conduct Workshop No.1 with Management The purpose of this workshop is to draft revised organizational goals, objectives, and strategies which will provide direction for the remainder of the study. The project team will prepare and distribute to management a memorandum summarizing discussions and conclusions resulting from this workshop. Task 5 - Conduct a High Level Management and Organizational Assessment The purpose of this task is to perform a high level assessment of the key business and operations functions of CGS. The evaluation will center around those key functions which impact the elements of price, marketing, sales, and product over which CGS has control. Organizational structure is a critical factor for bond rating agencies and financial markets and has become an important factor in reviews by such agencies and markets. Having worked for a wide variety of utilities with different corporate structures and policy making boards, we can give the City the insight and guidance necessary for evaluating appropriate alternatives for CGS. The assessment will be accomplished using draft goals, objectives, and strategies as guides for resulting recommendations. The results of this task will be summarized in a memorandum and distributed to management for review and comment. Suggested areas for review include: 1. Existing general policies and procedures. 2. Communication links and critical information flow patterns and appropriateness. 3. Performance standards, resource utilization (financial as well as human), work scheduling, staffing and management and staff training programs. 4. Automation. ~ Management Consulting 1156 C-2 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Work Plan 5. Customer service activities. 6. Span of control. 7. Organizational structure. Task 6 - Conduct High Level Marketing Plan Assessment The purpose of this task will be to perform a high level marketing plan assessment. The evaluation will focus on the reasonableness of CGS' s strategic plan to increase marketing success throughout its service territory. For CGS to successfully preserve its customer base, it must answer three key questions: · Who are our customers? · What products and services do they want? · How much are they willing to pay for the services and the products they desire? Our experience has shown that companies answer these questions by dividing customers by market segment; identifying those segments that show the greatest potential; forming market segment teams to study in detail customers' needs and wants; analyze the competition; and identify product and pricing strategies. The evaluation will determine the feasibility of CGS' s strategic marketing plan to identify both its potential and "at risk" customer groups and to generate products and services that are competitively priced to acquire and/or retain these customers. Where necessary, the assessment will include recommendations on how to modify or alter CGS's current strategic plan such that it will better serve CGS in its efforts to expand customer base as well as confront and counter the loss of customers to "predatory" pricing. Task 7 - Conduct Financial Assessment This task will provide the City with a high level financial assessment of CGS. The assessment will be conducted at the macro level to determine the financial viability of CGS. In addition, the strategic marketing plan will be reviewed with respect to the expected effects of major plan elements on CGS financial operations. A procedure will be recommended to assist CGS staff in quantifying the effect that future changes to the plan are expected to have on the expenses, costs, and profitability of CGS. Task 8 - Develop Benchmark Criteria and Perform Assessment With Comparable Utilities The purpose of this task is to benchmark key performance indicators directly applicable to CGS with those of comparable utilities. Performance measures will be developed in the areas of financial, operations, marketing, customer service, and organizational issues. The ~ Management Consulting 1156 C-3 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Work Plan benchmark actIvItIes will begin early enough in the study to provide adequate time for responses from utilities and the use of the current Black & Veatch performance measures data base. The results of this assessment will be summarized by the project team in a memorandum and distributed to management for review and comment. Every effort will be made by the project team in performing this assessment to acquire information which is directly comparable to COS' s operation. There is always a danger in performing a benchmarking assessment of comparing apples with oranges. Our project team's experience with utilities across the nation should eliminate this problem. Task 9 - Conduct Workshop No.2 With Management The purpose of this 1/2 to one day workshop is to review the results of all tasks completed since Workshop No.1 and use this information to finalize revised goals, objectives, and strategies for the future management and operation of COSo Task 10 - Conduct Public Hearings The purpose of this task is to present the final report in two public hearings for COSo ~ Management Consulting 1156 C-4 I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Qual ifications Black & Veatch Black & Veatch was founded in 1915 and is recognized as one of the leading engineering- financial-management consulting organizations in the world. The firm's consultants have distinguished records of service covering a wide range of experience. The reputation of the firm attests to its staff's professional abilities, as well as to their dedication to providing high quality services. Black & Veatch's clients include utilities, state and county governments, municipalities, public districts, financial institutions, private industry, and governmental agencies throughout the United States and worldwide. The firm has engaged in over 29,000 assignments for more than 6,100 clients. As an independent partnership, Black & Veatch is directed by an Executive Committee comprised of a Chairman and six managing partners. The firm is headquartered in Kansas City, Missouri, and maintains numerous regional offices throughout the United States and overseas. Black & Veatch has built a diversified national and international practice emphasizing utility, environmental, industrial, and special facility services. The firm is organized into specialized operating groups to best meet each client's needs. Group Managing Partner R. G. Ruisch Group Managing Partner J. L. Patlon Group Managing Partner J. H. Robinson, Jr. Group Managing Partner RD. Hardlen Power Division Managing Partner P. G. Davidson Environmental Division Managing Partner L. C Rodman Division Head W. G. stannard Division Managing Partner R. D. Hardlen Assistant Division Helld J.R. McKinley I ~ Management Consulting 1156 D-1 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Qual ifications · Management Consulting Division The Management Consulting Division provides special services in financial, accounting, rate, feasibility, and management studies to public and investor-owned utilities, local governments, industry, financial institutions, and other governmental agencIes. · Energy Group The Energy Group provides engineering services for electric power generation, transmission, and distribution requirements. The Pritchard Corporation is a petro- chemical division of the Energy Group which provides design, engineering, procurement, and construction services for process industries. · Environmental Group The Environmental Group provides complete engineering services in all facets of the water, wastewater, stormwater, solid waste, and transportation fields. · Facilities Group The Facilities Group provides a comprehensive range of planning, engineering, and architectural services to industry, local governments, and agencies of the United States government. More than 50 percent of Black & Veatch's permanent staff of over 5,000 are graduate professionals of various disciplines. These include professional engineers in the civil, sanitary, electrical, mechanical, nuclear, chemical, architectural, and structural engineering fields. Associated with them are financial and management specialists, economists, accountants, attorneys, systems analysts, computer programmers, architects, planners, hydrologists, biochemist, skilled technicians, and administrative personnel. ~ Management Consulting 1156 D-2 I I City of Clearwater, Florida Qual ifications I Black & Veatch offers a complete scope of services to best accommodate each client's unique needs. Extensive management and financial experience and diversified staff capabilities enable Black & Veatch to assume total responsibility for diverse projects worldwide. I I I I I Management Consulting I . FinJl1ciJI Plans . Valualion Certiticale . FinanciJI SOflWJfe . Appraisals . Contract Reviews and Negotiation . Power Supply Plans . Fuel Supply Plans . Facilities Planning . Wastewater Plans . WJter Supply Plans . Flood Plans . Market Studies . Lmd Use . Raw Studies . Depreciation Rate Studit.s ,. Bu~int'ss Planning . Expert \Vitness Te,timony . Vaille of Service . SI:d'f TfJining . Facilities Spac~ Pl<lOning . Impact Fees . StormwJter Utility Development . Operations Reports I I I I I I I I I Energy . Fossil . Nuclear GJS Turbines Combincd Cycle \V aste-to-Energy Hydro Transmission Distribution Communications Cogeneration Plant OperJtions Pennitting & Licensing . SCADA . NalUral Gas Processing . Enhanced Oil Recovery . Petroleum Refining . Pelroehemicals/Chemicals . Sulfur Recovery Environmental . Water Supply . WJter Distribution . Water Treatment . Water Reclamation . Wastewater Collection . Wastewater Treatment . Hazardous \V aste Cleanup Management . Residuals Management . Solid Waste Disposal . Water Resources . Transportation . Mined Land Rcclamation . Control Systems . lndusttial Waste Treatment . Systems Planning Facilities . Computer Facilities . Marine Engineering . Security Systems . Hardened Structures . Master Planning . Utilities Restoration . Office Buildings . Education Facilities . Medical Facilities . Interior Architecture . Correctional Facilities . R&D Facility Design . Facility Reutilization . Industrial . Pulp and Paper . Clean Rooms . Renovation/Retrofit Ii) Management Consulting 1156 I 0-3 I I I I I I City of Clearwater, Florida Qual ifications Management Consulting Division Black & Veatch has specialized in providing financial and management consulting services to public and investor-owned utilities, governmental agencies, financial institutions, and industry, both domestic and foreign, since the firm was formed in 1915. The Management Consulting Division employs a full-time staff of 75, with a diversity of undergraduate and advanced degrees in finance, accounting, engineering, economics, business administration, human resource management, and computer science. Most of the staff have devoted all or a major portion of their careers to utility financial and management consulting services. I I I I The Division provides utility consulting services in three key areas: strategic financial planning and modeling, regulated utility and energy services, information management, and institutional strengthening. The following summarizes specific services under each major activity. Strategic Financial PlanningIModeling Regulated Utility/ Energy Services I I · Project Feasibility/Financing · Financial Modeling · Bond Feasibility Studies . Capital Improvement Program Review · Operations Reports · Operating Budget Review . Revenue Requirements . Cost of Service Studies . Rate Studies . Innovative User Charges · Strategic Financial Planning/Modeling Services Relating to the Energy Industry · Property/Business Valuation . Cost Allocation, Rate Design, Cost Recovery Systems · Pricing Studies · Depreciation Studies · Demand Side Management . Expert Witness Testimony . Load Forecast/Supply Planning . Rate Case Preparation I I I I I Information Management Institutional Strengthening · GIS Consulting . MIS Strategic Services . Infrastructure Control Systems . Capital Improvement Planning/Tracking . Asset/Resource Management . Utility Strengthening Services · Human Resource Studies . Organizational Effectiveness · Customer/Community Relations . Workshop Development . Training Programs · Productivity Assessments I I ~ Management Consulting 1156 D-4 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Qual ifications The requirements of state and federal regulatory commissions now touch practically every major area of utility management. Personnel assigned to the Management Consulting Division have accumulated a broad knowledge of state and federal regulations pertaining to utility rates, property valuation, socioeconomic impact, manpower requirements, accounting systems, and organization and management functions. The Division maintains its position as an industry leader through active participation in a variety of professional societies and industry associations. Among the firm's personnel are a number of nationally recognized utility financial and management experts. Management Consulting Division professionals participate in research and development and training related to utility rates and financing. For any assignment our consultants work in experienced teams familiar with the particular service to be provided to the client. Each project team is led by a Partner-in-Charge or a Senior Project Manager who is responsible for all phases of the work plan associated with the assignment, maintaining close and frequent communication with the client during the course of the project, and the quality of the end product. During each assignment our project team will not only carry out the assignment at hand, but will be alert for other areas where improvement will provide value-added service to clients. We approach each project with a broad, rather than narrow, focus based on the following perspecti ves: 1. We work closely with key members of the client's organization impacted directly or indirectly by the project. We explain in detail the objective, purpose, and goal of each individual task. We listen to our client's suggestions during the course of the study and are not inflexible in changing the work plan to better fit the needs of our clients. This approach permits us to reach the end of a study with no surprises or misconceptions of the end results by the client. Agreed to objectives and goals are met in an efficient and cost and schedule sensitive manner. 2. We are not the only ones with answers. We work jointly with clients and consider ourselves to be an extension of the client's staff. We serve in various capacities during the course of a project including counselor, catalyst, consultant, resource linker, advocate, coach, and planner. We never serve as dictator. We leverage your knowledge of your business and its operating environment with our national experience with utilities and problem solving capabilities to formulate implementable and customer focused solutions. 3. We are dedicated to your success not only with a particular project but also in the future. Your organization's continued health in the future ~ Management Consulting 1156 D-5 I I I I I I I I I I I I I I I I 'I I I City of Clearwater, Florida Qualifications hopefully will provide us with future opportunities to be of service. We always look forward to a long term relationship with our clients and know this is possible if we produce the measurable results your project deserves. The strength of the Management Consulting Division of Black & Veatch lies in its proven capability to provide comprehensive, practical, and implementable programs that serve its clients. While the Management Consulting Division of the firm will take the lead role in providing services required, experts from other business units within the firm will be called upon to provide necessary expertise in matters related to engineering design and related technical issues. Among these business units are: Power Division, Transmission & Distribution Division, Environmental Division, Advanced Environmental Technologies Division, and B&V Waste Science and Technology Corp. Energy Utilities Qualifications Since the Management Consulting Division was established as a separate business unit in 1949, it has been actively engaged in providing services to the energy industry. Clients served have included both regulated and non-regulated utilities, customers, and regulatory agencies. Services range from rate studies to load forecasting and supply planning. The following describes financial and management services which the Management Consulting Division provides for gas utilities. Strategic Business Planning The Management Consulting Division has a wealth of experience in providing management consulting services to energy utilities. Our strategic business planning approach ensures that all factors affecting management and operation are taken into consideration when formulating a comprehensive business plan. An effective plan must consider three factors: customer base, internal goals and objectives, and external forces and their interrelationships. This approach allows for the development of a workable, step-by-step plan to match the client resources with their vision of the future. Recognizing that strategic business planning is not a short-term fix, but rather a long-range commitment, the Management Consulting Division works closely with clients by forming teams to analyze operations and develop action plans. By using a collaborative project approach, we involve customers, employees, and management in the strategic planning process. Beginning with the vision and mission statement to carrying out specific action plans, involvement by all groups is the key to a successful strategic business plan. ~ Management Consulting 1156 D-6 I I I I I' I I I I I I I I I I I I I I City of Clearwater, Florida Qualifications Utility Strengthening Services The Management Consulting Division has provided utility strengthening services to utilities for nearly 80 years. While the scope of our services has changed over the course of these years to reflect transitions in the utility industry, one goal has remained constant: to help our clients deliver dependable and economical utility services to their customers. Today, the task of delivering dependable and economical utility services is more challenging than ever before. Stringent environmental regulations, an uncertain economic climate, and infrastructure deterioration are just a few of the concerns facing systems every day. To meet the challenges, the Management Consulting Division assists clients in making sure a strong organization is in place. This organization needs to be proactive, productive, competent, and service-oriented. The Division has the experience and resources to ensure the client organization is functioning effectively and efficiently. The Division's expertise in the areas of organizational effectiveness, human resources, information management, and customer and community relations helps our clients build on current strengths while focusing on future challenges and visions. Management Audits. By definition, a management audit represents a comprehensive review of utility activity. Studies performed by Management Consulting Division personnel include evaluation of the organization's structure, the overall planning and control process, financial management, engineering and construction activities, operations and maintenance activities, facilities utilization, manpower management, staffing requirements, the accounting and data processing system, the internal control system, material management and inventory control, employee and customer relations, customer services, and the quality of service provided. The audits performed reflect a balanced assessment of utility performance indicating both strengths and weaknesses along with recommendations for improving utility operations and performance. Operations Analysis. Operations reports provide a reVIew and analysis of trends in historical system operations. Such reviews include evaluation of compliance with bond covenants, established systems of accounts and financial reporting, and operating procedures. Operations analyses also include evaluation of the adequacy of the level of maintenance and repair to maintain the value of utility investment in system property, and the ability of rates and charges to meet future operating and capital requirements. Operations reports must meet the needs of report users in order to be an effective management tool. Financial institutions and bond holders must have assurances that existing customers have the capability of paying the cost of system operations. In addition to internal checks and balances, utility management is increasingly relying on operations reports as an independent check on the strengths and weaknesses of utility operations and as a communica- tion vehicle through which utility needs and requirements may be expressed to the public. ~ Management Consulting 1156 0-7 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Qual ifications Regulatory boards and rate paying customers desire an independent check and assurance that utility operations are cost effective. Management and Accounting Information Systems. One of the primary tools of effective management is a well organized and designed statistical and accounting system. Systems prepared by personnel in the Management Consulting Division provide information in a format to aid management in making timely decisions and to permit utility operations to be effectively planned and controlled. Accounting studies review the existing procedures involved in customer accounting, accounts receivable, cost accounting by utility function, accounting for materials and supplies, payroll, contract administration, and fixed asset accounting. Financial accounts and records are reviewed for their conformance with the requirements of the Federal Energy Regulatory Commission for electric and gas utilities and the National Association of Regulatory Utility Commissioners for water and wastewater utilities. Recommendations regarding enhancement of management reports, utility chart of accounts, field time and expense reporting, work order systems, fund and cash management procedures, and other requirements are made as necessary. Economic and Financial Feasibility Studies. Costs and benefits of proposed projects and their alternatives are identified and evaluated during economic and financial feasibility studies, which provide a basis for capital investment decisions. Personnel in the Management Consulting Division have performed feasibility studies relating to the addition of pipeline capacity and interconnections, the economic feasibility of alternative peak shaving projects, the benefits of power pooling, expansion of electric generating systems, replacement or improvement of water and wastewater treatment plants, the operation of grain handling and storage facilities, and the development of parks and recreation complexes. Sound managerial planning for construction of major capital improvement projects typically requires a comprehensive financial feasibility study. In cases where the project is to be financed by the issuance of municipal bonds, the demonstration of financial feasibility is an integral and essential part of the official statement for the bond sale. The basic purpose of an economic and financial feasibility study is to determine the financial viability of the project. Such a study includes consideration of a complex set of factors which must be analyzed in order to determine their effects on potential revenues and costs and benefits of the facility. The main components of a feasibility study include conceptual design, cost estimates of capital and operation and maintenance expenses, market analysis, financial capability, revenue projections, and feasibility analysis. All of these components are critical to the success of the study. Bond Feasibility Studies. The Management Consulting Division is often engaged by clients to develop material to be included in official statements for the sale of utility revenue bonds, including the normally required engineer's certificate of financial feasibility. Bond indenture provisions frequently require an inspection of utility plant facilities to determine the ~ Management Consulting 1156 D-8 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Qualifications adequacy of facilities to meet future customer requirements and whether or not the properties have been maintained in good repair and sound operating condition. Personnel in the Management Consulting Division have extensive experience in the performance of such physical reviews in conjunction with engineering certifications. Management Consulting Division personnel have coordinated entire official statements from text writing, demographic and economic summaries, and inclusion of auditor and bond attorney statements, to the printing of the official statement and bid forms and the mailing of this material to prospective bidders. Our recent experience indicates that in-depth presentations to rating agencies involving local officials, consulting engineers, accountants, and others are required to ensure the most favorable rating possible. Personnel in the Management Consulting Division are experienced in coordinating presentations to the bond rating houses on official statements which we have developed or on which we have assisted in the development. Since 1984, the Management Consulting Division has assisted in the sale of over $22 billion in utility bonds involving more than 200 separate issues. Capital Improvement Financing Plans. A sound capital improvement financing plan is essential for utilities to responsibly meet their capital resource requirements. Capital financing plans may include a review of the completeness of the capital improvement program in meeting system needs, a review of the adequacy of the capital improvement program cost estimates, a review of alternative sources of financing, and a review of the implementation schedule to determine the impact on annual cash requirements. Capital financing plans are an integral part of most rate studies performed by personnel of the Management Consulting Division. Our capital improvement financing plans are designed to minimize the impact on utility costs, and subsequently on the utility's customers. In developing the plan, recognition is given to local policy regarding cash versus debt financing and alternative types of debt financing; the purpose for which the expenditure is being made, e.g., to improve service to existing customers or to meet future demands; and potential alternative sources of funds, which may include annual revenues from charges for service, capacity charges, grants, and contributions. Alternative plans are analyzed through the use of projected cash flow statements to assess the impact on the utility's annual cash requirements, and to determine the optimum combination of the various funding sources which will meet the needs and objectives of the utility. Where long term debt financing is required, our financing plan will include recommendations regarding alternative types of available debt financing, and the timing and magnitude of the proposed debt issues. Personnel assigned to the Management Consulting Division can also provide valuable assistance to the utility through development of informational and educational materials designed to gain voter approval in those cases where a referendum is required to issue bonds. ~ Management Consulting 1156 0-9 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Qualifications Rate Studies Personnel of the Management Consulting Division are experienced in the development of rates and charges for publicly-owned and investor-owned electric and gas utilities. Our combined engineering and financial expertise enables us to develop soundly based rate structures, either in traditional forms or, when appropriate, innovative forms to address specific client needs and circumstances. Charges are developed based on sound rate making principles which are supportable before regulatory agencies and customer groups. Recent studies have focused on the design of competitive market-based rates and incentive rates based on analysis of the potential revenue implications of the rate alternatives. ~ Management Consulting 1156 0-10 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Qual ifications Barakat & Chamberlin Barakat & Chamberlin is an economic, business, and strategy consulting firm that helps utilities prepare for and respond to the challenges and opportunities created by increased competition, rapidly changing markets, and deregulation. To maintain market share in this changing environment, utilities must offer and price services that reflect how customers value such services when compared to other providers. For more than a decade, Barakat & Chamberlin has been a leader in the U.S. and Canada in showing utilities how to provide cost-effective management programs and services that offer customers value. Our capability to evaluate the City's strategic plan is briefly outlined below. Strategic Business and Market Planning Barakat & Chamberlin has assisted numerous utilities and utility subsidiaries in evaluating the potential for expanding services into new markets. We have assisted numerous energy service companies in evaluating new business opportunities and developing business plans. We have also analyzed competitive economics and customer choice issues for natural gas, electricity, and heating oil markets. Strategic Fuels Pricing We have participated in numerous strategic fuels planning studies. A recent project involves assisting a utility in California in evaluating the potential of building a new transmission pipeline to compete directly with the local distribution company. Utility Bidding Program Assistance Our firm is a leader designing and managing supply acquisition programs for utilities and end-users. Our experience encompasses programs for fuels, electric power, and retail energy services. We have created and issued RFPs, evaluated proposals, recommended winning bids, and developed contract negotiation strategies. We also have provided technical and analytical support during contract and bidding negotiations. Strategic Pricing and Rates An adjunct to our strategic market planning services includes in-depth experience estimating costs, designing tariffs, and developing innovative rates and pricing strategies for gas and electric utilities. Some members of our firm have been involved with gas utility cost and rate issues for nearly 30 years. ~ Management Consulting 1156 0-11 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Experience and References Black & Veatch The Management Consulting Division has specialized in assisting utilities and local govern- ment with comprehensive management, financial, rate, accounting, economic, and data processing expertise and maintains a position as an industry leader in utility financial consulting. In the last five years alone, Black & Veatch's Management Consulting Division has conducted over 1,000 financial studies across the nation and abroad. The variety of engagements during this period include consulting services relating to: · Strategic business planning. · Management and organization studies. · Utility operations assessments and reports. · Staffing and scheduling studies. · Benchmarking and performance indicators studies. · Institutional strengthening. · Revenue requirements and adequacy of rates. · Design of utility rates, charges, and pricing structures. · Revenue bond feasibility studies and rating agency presentations. · Capital improvement financing plans, including alternative methods, such as long- term debt, connection charges, and current revenues. · Property inventory and valuation, including the establishment of property records. · Market studies. · Depreciation rate studies. · Cost allocation. · Accounting and management information systems. · Computer software applications. · Financial feasibility studies. · Statistical analysis. · Socioeconomic impact studies. · Utility service requirements. · Geographical Information Systems. · Regionalization. The experience records on the following pages consist of representative clients nationwide for whom Black & Veatch has provided management and financial services relevant to the work requested by Clearwater. A more extensive list of representative engagements for gas utility studies are included on the following pages. ~ Management Consulting 1156 E-1 I I I BLACK & VEATCH MANAGEMENT CONSULTING DIVISION PROJECT EXPERIENCE FOR GAS SERVICES Project Work Items Vl (\) (\) .... <<i (\) .:: 0.:: ..c E '(;; 0::; <<i ., 0. t::: (\) ::l ~ ;>, 0.:: c: ,S ~ ., t::: <<i 0.:: ell 0 , , Vl ..... Cl .g (\) (\) t:: c: 0 :0 () () 0 (\) ~ (\) "(;J .;; ';; 0. E (\) t::: <<i Vl Vl Vl <<i '" Vl (\) t:: .... .... t::: 1:l 0.:: E ;e -... () '(;; E- o (\) (\) '" ~~ .... 0. ell ell .... '3 t:: (\) Vl t Cl Vl 0. Vl (\) ..... ..... t::: 0' 0 '" .- .... 0. (\) 0.:: 0 0 b/J .S (\) .- >. (\) .0 (\) ~ 5 - 0.:: <<i -... u.. '<;j U Vl 'in Vl .:: <<i c.. () '" t:: ~ t::: 0 0 =a (\) .!::l 0. 's "(;J ~ .... .S 0 ~ ~ 'u ::l "(;J 'u (\) og t::: ::l (\) <<i t:: (\) t::: 0 t::: Vl Vl ::l .... (\) E ell t::: t::: "0 ::l & .... (\) (\) .0 0. ;> .... Vl 0 '" c:: '50 (\) <<i <<i c:: (\) (\) 0 '" () c:: 0 c:: "(;J >< 0. Client 0.:: 0.:: ~ Cl 0.:: Z 0 ~ [; i!l ~ > ~ 0 ALABAMA JasPer Utility Board . I . I ALASKA Earth Resources, Inc. .1 I I ARIZONA Arizona Public Service Company . . Mesa, City of . . . Santa Cruz Properties, Inc. . ARKANSAS Arkansas-Missouri Power Company 1 I . 1 CALIFORNIA Long Beach 1 .1 Sacramento Municipal Utility District 1 I , ., .1 COLORADO Colorado Springs Department of Utilities . . Denyer - Great Western Sugar Company . K N Energy, Inc. . . . . . . . . . Midlands Energy Company . Peoples Natural Gas . . . . CONNECTICUT Connecticut Department of . . . Public Utility Control Connecticut Natural Gas Corooration . . . New Elll!land Power Company . . . Norwich Department of Public Utilities . . . . . Southern Connecticut Gas Company . . . Yankee Gas Services Company . . . FLORIDA HOl!an & Hartson, Attornevs , I . , GEORGIA Atlanta Gas Light Co. . I I . ILLINOIS Gas Research Institute 1 . I U.S. Steel Corporation I. I . IOWA Burlington . Iowa-Illinois Gas and Electric Company . Midwest Gas . . . . . . . Peoples Natural Gas . . . . . . . . . I I I I I I I I I I I I I I I I 6/27/96 I I I BLACK & VEATCH MANAGEMENT CONSULTING DIVISION PROJECT EXPERIENCE FOR GAS SERVICES Project Work Items '" Il) Il) ... c:5 Il) .:: e:::: ..c E 'c;j Q) c:5 ;) 0- t::: Il) ;::l ::;; >. e:::: 0:: .S ~ ;) t::: c:5 e:::: CI'J 0 , , '" ....... Cl .g Il) Il) t C 0 :0 u u 0 Il) ~ Il) "c;j 'S: 'S: 0- E Il) t::: c:5 '" '" '" c:5 ~ '" Il) t ... ... t::: ~ e:::: E :.E ..... u 'c;j fo- 0 Il) Il) ~ ~~ ... CI'J CI'J ... '3 l:: Il) .;;; '" 0- ....... t Cl 0- '" Il) ....... t::: 0"' 0 ~ .- ... 0- Il) e:::: 0 0 I:lIl Il) .- ..... Il) ..c Il) <t: S ~ ~ .S e:::: c:5 >. ..... u.. .;;; u '" '" '" .:: c:5 Il) .!::l 0. u ~ ... l:: ~ t::: 0 0 =a 0- '12 "c;j &: .S .S u u 'u ;::l - 'u Il) t::: t::: ~ ;::l Il) c:5 ~ c:5 ..... ..... ~ 0 t::: ... '" '" ;::l Il) E CI'J t::: t::: ""0 ;::l Il) ... Il) Il) ..c 0- ;> ... '" 0 ~ t::: '50 0- Il) c:5 c:5 c: Il) Il) 0 ~ u c: 0 c: "c;j >< 0- Client e:::: e:::: :::J Cl e::::z 0 ~ u: co ~ > ~ 0 KANSAS Gas Service Comnanv . . . K N Energy, Inc. . . . . . . . Kansas Gas Sunnly Corn. . . Kansas Public Service . . . . . Peonies Natural Gas . . . . . . . Utili Corn United Inc. . . Wichita, City of . . . Winfield Municinal . . KENTUCKY Fulton I I . LOUISIANA Alexandria Utilities Division I . .1 . ., . 1 . 1 . MASSACHUSETTS New England Power Co. . . 1 1 I . MICHIGAN Michigan Consolidated Gas Company I 1 1 . MINNESOTA Midwest Gas . . . . Minnegasco, Inc. . . Northern Minnesota Utilities . . Northern States Power . . . MISSOURI Missouri Gas Energv (Gas Service Co.) . . . . Missouri Public Service . . . . Snringfield City Utilities . NEBRASKA Central Telephone & Utilities Corporation . Fremont, City of . . Hastings Utilities Department . . K N Energv Inc. . . . . . . Midwest Gas . . Minnel!asco, Inc. . . Nebraska Natural Gas Company . . . . . . Peonies Natural Gas . . . . . NEW MEXICO Las Cruces . . . . Los Alamos National Lab . . Rio Grande Natural Gas Association . . . . I I I I I I I I I I I I I I I I 6/27/96 I I I BLACK & VEATCH MANAGEMENT CONSULTING DIVISION PROJECT EXPERIENCE FOR GAS SERVICES Proiect Work Items Vl <I.l <I.l .... c:o <I.l ,S 0::: ..c E '@ ., c:o v 0. C <I.l ::l ~ >. 0::: 0:: ,S ~ v c c:o 0::: en 0 , , Vl ...... Cl E <I.l <I.l t:: 'i: 0 ::0 u u 0 <I.l ~ <I.l '"@ ';: ';: 0. E <I.l C c:o Vl Vl Vl c:o '" Vl <I.l t:: .... .... c ~ -- u '@ E- <I.l <I.l '" 0::: E :c Cl: 0 en en .... '5 I:; <I.l '<;j .... Vl 0. ...... ...... t Cl := '€ 0. Vl <I.l 0" 0 '" 0. <I.l 0::: 0 0 c -- <I.l .0 <I.l <t: S 01) ,S <I.l ,- >. u.. '<;j U ~ ~ ,S 0::: c:o -- I:; Vl Vl Vl c:o Q.) .~ 0.. u '" ~ c 0 0 =a 0. '12 '"@ <I.l ... ,S ,S ~ U '<) <I.l ::l - ::> '<) u.. <I.l ~ -- C <I.l C '" CIl 0 C c:o ... c:o Vl Vl ::l ... <I.l E c C "0 <I.l ... <I.l <I.l .0 0. > ... Vl 0 '" c '60 ::l 0- <I.l c:o c:o C <I.l <I.l 0 '" u C 0 C '"@ >< 0. Client 0::: 0::: :J Cl o:::z 0 UJ ~ c:o UJ > UJ 0 NEW YORK Central Hudson Gas & Electric Corooration . . . Consolidated Edison Comnany of New York . . . New York State Electric and Gas . . . Nia!!ara-Mohawk Power Como ration . . . . . Oran!!e & Rockland Utilities, Inc, . . . . . . Penn- York Customer Groun . . . . NORTH CAROLINA Carolina Utility Customer's Association . I . . PENNSYLVANIA Pennsylvania & Southern Gas Co, I . Sharon Steel Corporation I . I . SOUTH CAROLINA Bamber!! Board of Public Works . Chester County Natural Gas Authority . . . . . . . Clarendon County . Greenwood Commissioners . . of Public Works Johnson & Johnson . Lancaster County Natural Gas Authority . . . . . .' . Oran!!ebur!! Deoartment of Public Utilities . . . . . . . Peoples Natural Gas Company of South . . . . . . Carolina South Carolina Pipeline Corporation . . . Resale Customer Grouo York County Natural Gas Authority . . . . . . . SOUTH DAKOTA Central Teleohone & Utilities Corooration I . TEXAS Coastal States Gas Corooration . Dallas Indeoendent School District . Pioneer Natural Gas Comoanv . UTAH N, L , Industries . I u, S, Steel .1 1 . VIRGINIA Charlottesville . . . I I Greensville County I . WEST VIRGINIA Columbia Gas Transmission Corooration . I I I I I I I I I I I I I I I I I 6/27/96 - - ~ tv ::::! -0 0\ - - - - - - - - - - - - - - - - - ~ ~ ~ '1:1 Z Z Z Z ..... n ~ ~ po 0 0 0 0 (') 0 ..., ..., ;:I. ..., ;:I. :><" ~ -< 0 0 (') 0 s- S- a a 0 ::r ::r en 0 =' 6> (1l (1l (1l (1l 0 0 :: ~. ~. =' ..., 3 ..., ..., =' (1l =' =' =' < ~ .... '1:1 0 ~ ~ :: 0 0 po n Z c 0 po po =' C':l 2: po c en en 0 en 0 =' 0 n 0 ~ ('i. n a o' po 0 ~. en S ~: 0 en po en ~ 0 S. ~ ~ (1l en ..., <' 0 o. <: po Q po po =' ~ ('i. R C;;' en 0 o' (1l o' n ..., g n =' 0 ;:0::: 0 0 ~ OJ a ..., z > a ;:0::: po C;;' z ~ 0 en "" o. =' "U RD ;0 < 0 m '-)> m~ 00 ~::J: . . . . . . . . Rates/Cost of Service - Retail m X~ "U)> mZ . Rates/Cost of Service - Pipeline 31)> !ZG'l om Unbundlingffransportation Rates m~ .... m OZ ;o~ . . . Depreciation G'lO )>0 cnZ Revenue Requirements/Weather '1:1 cncn . . . mC Normalization/Rate of Return ~. ;o!:i (1l <- ~ _Z OG'l Gas Supply/DemandlDSM :E me 0 <: ..., :><" Economic/ '" c;; . Financial Feasibility a 0 en Z Bond Feasibility/ Engineer Certificate . V aluationl Appraisal . . . . . . . . . . Expert Witness Testimony Operations Reports I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Experience and References Alexandria, Louisiana Mr. A. E. Craig, Jr. Director of Utilities City of Alexandria 915 Third Street Alexandria, LA 71301 (318) 449-5008 Black & Veatch has conducted various studies for the City of Alexandria since the initial economic feasibility study related to additions and improvements to the combined utility systems for the City in 1962. The purpose of the initial study was to determine the feasibility of financing recommended capital additions and improvements to the City's electric, water, natural gas, and wastewater systems with utility revenue bonds. Black & Veatch has conducted utility revenue adequacy studies and made recommendations for changes to rates and charges for the City's utilities. In accordance with Bond Resolution dated February 29, 1956, and subsequent bond resolu- tions, the City of Alexandria, Louisiana, retained Black & Veatch as the consulting engineer for the purpose of reporting on the operations of the Utilities System which is comprised of the electric, gas, and water utilities. As a part of this service, we prepared a report with respect to the Utilities System, the management of the business thereof, and the operation and maintenance of the utilities for the fiscal years ending April 30, 1990 and 1991. Our report showed that the City has satisfactorily performed and complied with the provisions set forth in the Bond Resolution with respect to: 1. The operations of the Utilities System. 2. The physical condition of the properties of the Utilities System. 3. Adherence to the provisions of the Bond Resolution. 4. The efficiency of the management of the property of the Utilities System. 5. The proper and adequate keeping of books of account and record. 6. Adherence to budget and budgeting control. 7. Other things bearing on efficient operations of the Utilities System. Our report also provided recommendations for the maintenance and operations of the Utilities System. We have prepared similar reports for the City since 1983. In 1987, Black & Veatch conducted an evaluation of a proposal by the Central Louisiana Electric Company to acquire and operate the City's electric system. The analysis included a determination of the financial impact of the proposed acquisition on the City. The evaluation included consideration of the proposed purchase price, franchise fees, payments in lieu of taxes, interdepartmental electric services, and various other factors. ~ Management Consulting 1156 E-6 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Experience and References In 1990, Black & Veatch studied an offer from Louisiana Energy and Power Authority (LEPA) to provide all-requirements electric supply service to the City. The purpose of the study was to provide the City with an overview assessment of the contracts proposed by LEP A, the underlying arrangements for all-requirements service, and review and comment on contract provisions. On behalf of the City, in 1991, Black & Veatch conducted a review of natural gas supply proposals for the City. The purpose of the review was to verify that alternative City plans and supplier proposals were based on reasonable assumptions. Our review included present value comparisons of alternative supply options. City Utilities of Springfield Springfield, Missouri Mr. Gerald L. Lee Assistant General Manager City Utilities of Springfield 301 E. Central Springfield, MO 65801 (417) 381-8760 Black & Veatch has been engaged by the City Utilities of Springfield on recent occasions to prepare operations reports on the City's utility systems. In December 1992, the City engaged Black & Veatch to prepare the triennial report on the electric, gas, and bus transportation systems. Prior to this engagement, Black & Veatch completed the biennial operations report for the water system. In preparing the operations reports, Black & Veatch reviewed numerous operating reports, financial statements, and reports furnished by City Utilities; conducted field inspections of major facilities; and interviewed selected management and staff of the utility. Our reports included overall findings and recommendations for the utility systems and specific findings and recommendations with respect to outstanding revenue bonds, organization and management, financial operations, and each separate utility system. Edmond, Oklahoma Mr. Jerry L. Smith Assistant City Manager 100 East First Edmond, OK 73083-2970 (405) 359-4704 ~ Management Consulting 1156 E-7 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Experience and References Black & Veatch is currently providing services to assist the electric, water, wastewater, and fleet management departments in the development of strategic business plans, including mission statements, goals, objectives, strategies and action plans. The study is designed to maximize the value of the "businesses" operated by the City through the most efficient and effective management and operations techniques available. Rate studies for the electric, water, and wastewater departments will be designed to facilitate the objectives identified in the business plans. Westerville, Ohio Mr. Michael J. Wasylik Assistant City Manager 21 South State Street Westerville,OH 43081-2119 (614) 890-8542 Black & Veatch is in the final stages of completing a management study of the Electric Division and Proposed Engineering Department for the City of Westerville, Ohio. The primary objective of our study is to identify the most efficient staffing levels and organiza- tional structure which will enable the City's Electric Utility and proposed Engineering Department to handle all current and future service demands. The final report will provide an assessment of the existing Electric Utility's organization structure, staffing levels, functions, and operations in order to identify future enhancements. An assessment of the proposed Engineering Department's organization, staffing expertise and levels, proposed functions, and operations is being conducted to provide direction for the Department's formulations. Black & Veatch is also assessing the present levels of service delivery of the Electric Utility to identify areas needing additional strategic planning and strengthening. We are also preparing an overview perspective of existing information technology status and providing direction for future enhancements. The Electric Utility's effectiveness is being evaluated in terms of the achieving goals and objectives through management of all its resources. Ii) Management Consulting 1156 E-8 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Experience and References Wyandotte, Michigan Mr. Thomas M. Daly General Manager Department of Municipal Service City of Wyandotte 3005 Biddle A venue Wyandotte, MI 48192 (313) 282-7100 Black & Veatch recently completed an evaluation of the organization and operations of the municipal power plant of City of Wyandotte's Department of Municipal Service. The evaluation of the power plant included identifying strengths and potential areas for improvement with the existing organization, staffing levels, and operating procedures. In addition, a ten-year financial plan for the combined utility system (electric, water, and cable TV) has been prepared. Grand River Dam Authority Vinita, Oklahoma Mr. Ron Coker General Manager/Chief Executive Officer Grand River Dam Authority P.O. Box 409 Vinita, OK 74301-0409 (918) 256-5545 At the request of the Grand River Dam Authority and pursuant to the Authority's General Bond Resolution No. 4800, Black & Veatch prepared a triennial report on operations. The conclusions reached and findings set forth in the report were based upon a physical examination of the electric power and energy system, a survey of management concerning the conduct of the Authority's business, and the operation and maintenance of the Authority's properties. It was determined that the Authority had performed and complied with the covenants set forth in the resolution with respect to the efficient management of the properties of the system and its business; maintained, charged, and collected sufficient rates; provided for the proper maintenance of the properties of the system; and made necessary repairs, renewals, replacements, and improvements. In 1992, Black & Veatch was retained to prepare a consulting engineer's report for the issuance of $764,585,000 in Revenue Bonds, Refunding Series 1993. This report was included as an appendix to the Official Statement. Based on the financial and rate projections of the report, the requirement for issuance of additional bonds was met. ~ Management Consulting 1156 E-9 I I I I I I I I, I I I I I I I I I I I City of Clearwater, Florida Experience and References Cincinnati Water Works Mr. Bill Knecht Supervisor of Business Planning and Development Cincinnati Water Works 4747 Spring Grove Avenue Cincinnati, OH 45232 (513) 591-7965 Black & Veatch assisted the Cincinnati W ater Works with the development of a comprehen- sive strategic business plan which will lead the utility into the next century. Key elements of the study included the development of a utility vision, mission statement, values, goals and objectives, strategies, and annual action plans. The resulting comprehensive business plan focused the attention of the utility on its priorities and the manner it responds to those priorities through its programs and resources. Through the setting of realistic, measurable standards of performance, the business plan set concrete targets for managers and provided indicators of success. The project approach used in this study was heavily stakeholders collaborative in nature. Specific groups taking part in the study included a management Steering Committee, a Staff Focus Group, a staff Advisory Group, and a Customer Evaluation group. Each group was presented the opportunity to provide direct input in to the strategic planning process. This approach permitted the recognition of all internal and external factors which impact the utility's management and operation. It also permitted the utility to develop strategies and plans that are customer based reflecting an outside-in perspective. New York City Department of Environmental Protection, Bureau of Clean Water Ms. Eileen Kaufman Director of Strategic Planning New York City Department of Environmental Protection 59-17 Junction Boulevard Corona, NY 11368 (718) 595-3508 Black & Veatch was selected by the Department's Bureau of Clean Water to assist in the development of a detailed methodology and work plan for a re-engineering study of the Bureau's operations. The Bureau has over 2,000 employees and has an annual operating budget of over $200 million. The intent of the study was to identify opportunities to improve the quality and efficiency of all aspects of the Bureau's operations. ~ Management Consulting 1156 E-10 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Experience and References Aurora, Colorado Mr. Pete Smith Manager of Water Operations City of Aurora Water Department 1470 South Havana Street Aurora, CO 80012 (303) 695-7382 Black & Veatch recently conducted an operations audit of the Transmission & Distribution Division of its Utilities Department. The audit focused on all operational aspects of construction, repair and maintenance, inventory control, organization structure, work process documentation, and interface with other municipal departments which provide support services. The resulting report recommended reorganization of the Division, enhanced equipment, realignment of staff, and enhanced service delivery. It identified areas in which the Division had established programs and practices which were exemplary as compared with industry standards. Finally, it provided the Utility with a comparability factor to other organizations of similar size and complexity. Little Rock, Arkansas Mr. Don C. Morrow General Manager Little Rock Water P. O. Box 1789 Little Rock, Arkansas 72203 (501) 372-5161 Black & Veatch conducted an overview management study of the Water Works to include findings and recommendations concerning organizational, staffing, operations, personnel, management, and financial practices. The report also recommended revisions to policy matters pertaining to outside-City service, five-year financial and capital improvement program planning, cost of service and rates, developer relationships, and preventive maintenance programs. The organizational and management practices review evaluated: (1) the roles of the Board of Commissioners and top management; (2) key managers and their back-ups; (3) staffing levels throughout the Water Works; (4) management's control of utility operations; and (5) recordkeeping. Confidential Client Management Consulting Division personnel assisted an electric utility located in the Pacific Northwest in developing a strategic business plan. The purpose of the business plan was to establish goals, strengthen long-range strategic financial plans, and develop organization ~ Management Consulting 1156 E-11 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Experience and References restructuring guidelines. The plan was developed through extensive data collection, interviews, and evaluations regarding markets, services, development programs, organization and management structure, financial feasibility, and regulatory strategies. EI Dorado, Arkansas The EI Dorado Utility Commission is responsible for the operation, maintenance, improve- ment and extension of the water and wastewater utilities. Although generally satisfied with the level of services received by system customers, the Commission sought an overview management study to evaluate current conditions and to set the direction for future questions of the utilities. Primary concerns included an aging infrastructure, lack of organizational succession planning, managers with limited exposure to modern management techniques and few formalized policies and procedures for on-going operations. Black & Veatch provided recommendations to strengthen the organizational structure, optimize staffing, improve planning, and establish recordkeeping requirements. Implement- able recommendations for more efficient and more effective operating policy and procedures were provided and areas of commendable program were reported. Since this was a transition point in utility management, the project team offered suggestions for continuous quality improvement and provided assistance in deferring the respective roles of the Commissioners, utility management, and other City services. Albuquerque, New Mexico Black & Veatch undertook a management audit of the Public Works Department's water resources operation covering three distinct areas: (I) management practices, (2) capital improvement program procedures, and (3) productivity/performance. Department operations include water, wastewater, and stormwater systems. The management practices review covered City policies, enterprise fund operations, financial planning, budgeting, financial and cost accounting systems, purchasing, continuing property records, central services, cost alloca- tion plans, and review of the computerized management information system. The technical/ engineering assessment covered the project planning and selection process, interaction with other City departments, engineering services procurement procedures, cost estimating, scheduled maintenance, and reporting mechanisms. The productivity and performance study covered staffing levels, reporting mechanisms, planning, management practices, and technical capabilities. In addition, Black & Veatch conducted an overview evaluation of the engineering division's utilization of professional and technical personnel, organizational structures, and division managers' work responsibilities. Recommendations covering personnel needs were made in the resulting action plan. ~ Management Consulting 1156 E-12 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Experience and References Black & Veatch also assisted the Department with direction for an ongoing staff-developed comprehensive computerized management information system for its water, wastewater, and stormwater systems. Areas covered included uniform system of utility accounts, establish- ment of continuing property records, work order system, time reporting and personnel recordkeeping, inventory of general and mass properties, purchase order system, meter records, material and supply subsystems, construction cost trending, ratemaking procedures, and annual operations reports. Midwest Gas Mr. James J. Howard Vice President Midwest Gas 401 Douglas Street Sioux City, IA 51102 (712) 227-7550 Black & Veatch has prepared numerous jurisdictional and class cost of service studies and rate design studies for the Midwest Gas system (and the former Iowa Public Service Company) in recent years. Studies and supporting testimony and exhibits have been filed before the Iowa Utilities Board and the Minnesota Public Utilities Commission. Other issues which have been examined for Midwest Gas include transportation rates, customer bypass, weather normalization, electric generation rates, and consolidation of rates. Black & Veatch also provided assistance to Midwest Gas in their recent energy efficiency filing before the Iowa Utilities Board. This assistance included the development of avoided gas cost and the determination of estimated cost recovery factors associated with the utility's energy efficiency program. A voided gas costs were determined for the three pipeline systems serving Midwest Gas' system (Northern Natural Gas, Natural Gas Pipeline and American Natural Resources) and for the consolidated system. Orange and Rockland Utilities, Inc. Mr. Tom Traskus Director of Gas Supply Orange and Rockland Utilities, Inc. One Blue Hill Plaza Pearl River, NY 10965 (814) 577-2614 Over the past several years Black & Veatch has been engaged by Orange and Rockland Utilities, Inc. in connection with a number of natural gas utility related issues. Specific past engagements have included investigations regarding the feasibility of additional pipeline ~ Management Consulting 1156 E-13 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Experience and References interconnections, adequacy of the level of contracted for underground gas storage, weather data used in connection with gas utility operations, and pipeline rate proceedings. Recently, Black & Veatch completed a long range natural gas demand study for Orange and Rockland. In this study, Black & Veatch developed long-term customer and peak day demand forecasts for each customer class and peak day sendout for each of Orange and Rockland's divisions. In connection with pipeline rate matters, Orange and Rockland has sponsored Black & Veatch testimony in connection with Algonquin Gas Transmission Company, Columbia Gas Transmission Corporation, Penn-York Energy Corporation and Tennessee Gas Pipeline Company FERC rate proceedings. In these various FERC proceedings, issues addressed included cost allocation and rate design associated zone and distance based rates, transporta- tion service, storage service, and interruptible services. City of Orangeburg, South Carolina Department of Public Utilities Mr. Ted M. Johnson, Jr. Retired Department of Public Utilities City of Orangeburg, South Carolina P. O. Box 1057 Orangeburg, SC 29115 (803) 534-2821 Mr. O. Thomas Miller, Jr. Director of Gas Division Department of Public Utilities City of Orangeburg, South Carolina P. O. Box 1057 Orangeburg, SC 29115 (803) 534-2821 Black & Veatch recently completed an analysis and forecast of the City of Orangeburg, South Carolina Department of Public Utilities (DPU) demand and energy requirements and an analysis of supply alternatives to meet the projected load. Energy sales were forecast by customer rate class by month through 2004. Several supply options were analyzed under South Carolina Electric and Gas' (SCE&G) existing rate, SCE&G's anticipated rate increase, a competitor's existing rate, and the loss of Southeastern Power Administration capacity and energy. Black & Veatch also conducted rate and cost of service studies for the electric, gas, water, and wastewater divisions. As ongoing services, Black & Veatch provides regulatory support and purchased gas assistance. Peoples Natural Gas (A Division of UtiliCorp) Omaha, Nebraska Mr. Larry W. Headley Manager, Rates and Tariffs 1815 Capital Avenue Omaha, NE 68102 (402) 221-2023 Mr. Steven M. Jurek Manager, Rates and Tariffs 1815 Capital Avenue Omaha, NE 68102 (402) 221-2227 ~ Management Consulting 1156 E-14 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Experience and References Peoples Natural Ga engaged Black & Veatch to provide expert witness testimony in separate condemnation proceedings regarding its gas distribution systems in Everly and Hartley, Iowa. Black & Veatch prepared analysis of the fair market value and damages associated with condemnation of the property. Inspections of the property were conducted to determine the existing condition of the facilities. The analysis examined the contractual, physical, and functional damages that would be incurred from severing the individual system from the balance of the gas distribution system. The valuation approaches used in these proceedings included both a discounted cash flow analysis and reproduction cost less depreciation. In each of the engagements, Black & Veatch presented the results of the studies to a three judge condemnation court. Results of the analysis were also presented to District Courts on appeal. Over the past 30 years, Black & Veatch has assisted Peoples Natural Gas with respect to a variety of rate and valuation related issues in connection with service to customers located in Colorado, Iowa, Kansas, and Nebraska. Black & Veatch recently completed comprehensive class cost of service studies in both Kansas and Iowa. These studies reflected cost allocations which recognized fully distributed cost principals as well as competitive market considerations. In addition to the development of cost of service studies, Black & Veatch provided consultation regarding the development and design of rates consistent with the results of the cost studies while recognizing competitive factors in the natural gas industry. For the Iowa properties, Black & Veatch also prepared a comprehensive analysis of the relative investment costs of providing service to different customer classes. Such an analysis provides key information in recognizing the relative costs to serve different customers. York County Natural Gas Authority Lancaster County Natural Gas Authority Chester County Natural Gas Authority Mr. William S. Stephenson General Manager York County Natural Gas Authority P. O. Box 370 Rock Hill, SC 29731-6370 (803) 329-5255 Mr. Troy C. Elmore Manager Lancaster County Natural Gas Authority 836 South Main Street Lancaster, SC 29720 (803) 285-2045 Mr. Mike Enoch Manager Chester County Natural Gas Authority P. O. Box 220 Chester, SC (803) 581-1543 Black & Veatch recently completed a wide range of natural gas consulting services for the York, Lancaster, and Chester County Natural Gas Authorities. These services included the development of long term gas supply studies, analysis of intermediate term cash flow requirements, analysis of cost of service, rate design, development of natural gas tariffs, development of cost of gas recovery mechanisms, and wholesale rate assistance. ~ Management Consulting 1156 E-15 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Experience and References With regard to the long-term gas supply analysis, Black & Veatch used weather information from the National Oceanographic and Atmospheric Administration (NOAA) to develop normal and design day temperature conditions for Winthrop College, South Carolina. This information when combined with historical gas sendout, sales and number of customers provided a basis for determining customer growth and future peak day requirements. Statistical analysis was used to extend this analysis into the future to develop projections of customer growth and future peak day requirements. Based on an analysis of the marginal cost of pipeline supplies versus alternative peaking supplies, Black & Veatch provided the authorities with recommendations regarding the most economical mix of supplies to meet peak day capacity requirements for today and in the future. In addition, Black & Veatch analyzed the historical and future cash flow requirements of the Authorities and made recommendations regarding the appropriate levels of debt financing and rate increases to meet future requirements. Based on the cash flow and cost of service analyses, Black & Veatch developed natural gas tariffs for the Authorities. In order to levelize cost of gas recovery rates and to make the City's gas cost recover consistent with changes occurring in the rate structure of South Carolina Pipeline Corporation, Black & Veatch developed a cost of gas recovery mechanism that seeks to recover all gas costs on an annual basis while at the same time levelizing the unit rate charged from month to month. ~ Management Consulting 1156 E-16 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Experience and References Barakat & Chamberlin Strategic Planning Strategic Gas Acquisition and Marketing Plan Review. Barakat & Chamberlin assessed a proposed strategic gas acquisition and marketing plan for the City of Mesa, Arizona. Our work involved identifying competitors, evaluating customers' needs, and identifying potentially competitive service options. New Market Entry Strategy Development. Barakat & Chamberlin assisted a medium- sized electric utility to explore entry strategies for new markets. We developed a framework to screen both general and specific market entry alternatives for strategic fit and intrinsic attractiveness. In addition, we used preliminary results from the screening to assist the utility in honing its strategy for expansion well beyond its traditional service territory. Retail and Wholesale Market Expansion Study. Barakat & Chamberlin assisted a medium-sized combination utility to assess the market potential for significantly expanded retail and merchant services. We explored the potential size of the market for a wide range of services that could be offered to key customer segments. These were evaluated for a variety of geographical areas. In addition, we analyzed entry risk and prepared estimates of earnings potential in each segment for each potential product/service. Weare following up the expansion study with research into and analysis of targeted commercial market segments. Commodity Choice and Market Share Analysis. Barakat & Chamberlin developed the Advanced Technology-Choice and Load Analysis System (ATLAS) jointly with Consumers Gas of Ontario, Canada. We used the system to develop baseline estimates of company sales and market share projections under alternative scenarios. We compared gas to electricity and heating oil. Consumers Gas now uses ATLAS to predict intra- and interfuel fuel market shares, sales, and revenues. Also, they are using ATLAS to predict sales associated with new business opportunities. Natural Gas Market Share Analysis. Barakat & Chamberlin also used the ATLAS System to help Northwest Natural Gas develop estimates of market share, sales, and revenues under various scenarios. We analyzed marketing strategies designed to influence fuel selection for large end-uses, such as space heating, water heating, and space cooling in commercial and industrial markets. This analysis was supported by a primary market research and data analysis designed by Barakat & Chamberlin. Fuel-Substitution Study. Barakat & Chamberlin helped a utility specify and analyze potential fuel-substitution options in key market segments, examined the cost-effectiveness of electric versus natural gas end uses from several perspectives, and developed fuel- substitution scenarios representing a range of market intervention strategies. We projected the ~ Management Consulting 1156 E-17 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Experience and References effects of large-scale fuel substitution on the utility, customers, markets, and the environment. In addition, we quantified likely impacts in utilities' load factors, resource mix, rate levels, and reliability, as well as changes in fossil fuel consumption and resulting emissions. We also evaluated regulatory, institutional, and competitive effects. Residential Heating Fuel Choice Study. Barakat & Chamberlin conducted a study of fuel choices for residential space and water heating and the potential effects on Tacoma Public Utilities as heating equipment markets change in the future. We determined the patterns of electric and gas load patterns by customer group (including annual, seasonal, diurnal, and daily loads); assessed current trends in the markets for new space and water heating equipment; provided a method for analyzing equipment market shares and energy usage; provided a spreadsheet-based residential forecasting model that can describe alternative equipment market share and energy-usage scenarios, based on changes in model inputs, parameters, and assumptions; and analyzed impacts of likely developments in residential space and water heating markets. Strategic Fuels Planning Strategic Gas Planning. Barakat & Chamberlin assisted Alabama Electric Cooperative and its joint venture partners in a three-year project to repower a coal-burning facility with natural gas and to build a pipeline accessing the competitive interstate gas market. We conceptualized, led, and negotiated a partnership between the local gas utility (which was being bypassed by AEC) and AEC to co-own the new 75-mile pipeline. Co-ownership of the pipeline optimized the new capacity and offered extensive economic and operational benefits for both parties. Barakat & Chamberlin assisted with the following aspects of the project: · Design and negotiation of a joint venture agreement to build a bypass pipeline; · Involvement of the local gas utility as pipeline co-owner; · Strategic design of access to the competitive gas market; · Analysis and negotiation of pressure guarantees for electric generation (crucial to dispatchability) and for LDC system pressure support; · Negotiation of flexible volume requirements to accommodate the special requirements of electricity generation; ~ Management Consulting 1156 E-18 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Experience and References · Identification and review of engineering data on pipeline design and performance parameters, including those of interconnecting upstream pipelines; and · Negotiation of stipulated damages for non-performance by suppliers and transporters, including electric capacity payments in lieu of gas transporta- tion capacity, and for exit provisions favorable to power generators. The new pipeline starts service in the fall of 1996. When completed, it will access three interstate pipelines and a diverse and intensely competitive portfolio of southeastern U.S. gas supplies. Natural Gas Pipeline Developer Market Assessment. Barakat & Chamberlin performed a detailed end-user market study that identified and quantified commercially practicable natural gas demand that could be served by a developer's new pipeline. The study forecast demand over a IS-year period following the pipeline's in-service date, provided usage profiles, and identified end users by service corridor. Competitive Gas Pipeline Analysis. Barakat & Chamberlin was recently selected as part of a multi-disciplinary team to provide strategic advice to a large California electric utility in natural gas supply and transportation planning. The project will be part of a major effort to establish competitive access off the existing LDC system. Key issues we will evaluate include gas storage, pipeline capacity, possible pipeline construction, strategic gas contracting and possible reserve acquisition. Pipeline Study. Barakat & Chamberlin performed a study for a major independent power project developer to describe the key pipeline routes, basins, trading hubs, gas traders and marketers, and pricing relationships applicable to the midwestern U.S. and to determine contexts and opportunities for gas-fired independent power. The geographic scope included Minnesota, Iowa, Wisconsin, Michigan, Ohio, Illinois, and Indiana. We also reviewed gas sales contract data and terms, potential bypass opportunities, and possible strategic alliances. Utility Bidding Program Support Turnkey Bidding Services. Barakat & Chamberlin is providing comprehensive generation and retail market planning assistance to Colorado Springs Utilities. As part of the project, we provided turnkey competitive bidding project services to the city by issuing a Request for Proposals for power supply options, evaluating proposals and recommending potential suppliers. We assisted with the development of the bid strategy, designed the RFP, screened and scored the proposals, and provided recommendations to the city for selecting potential suppliers. ~ Management Consulting 1156 E-19 \ I I I I I I I I I I I I I I I I I City of Clearwater, Florida =- Experience and References = Contract Negotiation Strategy. Barakat & Chamherlin assisted Pacific Gas and Electric Company in developing a negotiation strategy with successful hidders of its powerSaving partners program. After PG&E received proposals, we worked closely with the utility to develop a strategic negotiation approach. We researched and analyzed contract negotiation approaches used throughout the industry, identified key issues for PG&E, and developed specific strategies for each successful proposal. IPP Project Bidding Support. Barakat & Chamberlin assisted an independent power producer in developing proposals in response to utility RFPs for eleclric generation projects in Virginia and Florida. Fuels Planning for power Supply Bid. Barakat & Chamherlin prepared a fuel supply plan for NRG Energy's Kalama, Washington project, which was offered to PacifiCorp in response to the utility's 1995 request for proposais for new generation resources. We conducted a hrief review of draft power purchase agreements for fuei-related aspects; we also prepared gas commodity and transportation cost forecast strategies, reviewed cost estimates, and assessed power market prices. We assisted with the fuels plan bid development, fuel strategy discussions and negotiations, and project dispatch model review. We wrote a summary of the fuel plan for inclusion in the submitted proposal. Strategic Market Planning Strategic Planning for Competitive Markets. Barakat & Chamberlin is assisting the City of Austin, Texas, in preparing its electric utility and energy service departments for increased competition in retail energy markets. The city's four goals became the focus of our efforts. These goals are: provide downward pressure on rates; increase the energy service options for Austin customers; revamp the DSM portfolio to hecome customer-value oriented, while retaining Austin's focus on meeting social objectives of energy use and efficiency; offer customers a wider choice; and meet MW and MWh savings goals, with particular emphasis on savings in a specific transmission- constrained area Weare assisting the city in meeting these goals through: . Updating utility staff and management and presenting evidence to regulatory bodies (City Council, Electric Utility Commission, and Resource Management Commission) on trends affecting the electric power market- place and strategies for preparing for increased competition; . Facilitating development of a single, comprehensive strategy for approach- ing the retail market; . ~ Management Consulting 1156 E-20 I I I I I I I I I I I I I' I I I I I I City of Clearwater, Florida Experience and References · Evaluating the city's strengths and weaknesses III a competitive retail business scenario; · Evaluating existing customer programs and developing a plan that evolves each into offerings that assist the City to thrive in a competitive market; · Establishing and implementing a market research plan to enhance energy services portfolio development; · Conducting a competitive assessment to identify vulnerabilities and opportunities; and · Developing New Product Development capabilities within the utility and assisting the utility in launching a set of new value-added energy and business services within the year. Comprehensive Strategic Market Planning. Barakat & Chamberlin has been assisting a large electric utility and its operating subsidiaries since early 1994 in the formation and implementation of comprehensive strategic marketing and business plans. Our work is being performed in four stages: 1. Strategic planning 2. Competitive intelligence 3. Market research 4. Strategic pricing We describe each below. 1. Strategic Planning. Barakat & Chamberlin assisted the utility in implementing a planning process to identify competitive product and pricing strategies for more than 12 key residential and nonresidential market segments. Steps involved: . Defining the utility's corporate objectives as a basis for the planning framework; . Conducting scenario planning exercises to both identify potential long-term strategic business issues and incorporate flexibility into the planning framework; . Analyzing the utility customers' needs and wants on a market segment by market segment basis; ~ Management Consulting 1156 E-21 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Experience and References · Evaluating the utility's current product and service offerings m each segment, as well as the price-value relationship of each; · Identifying competitors by segment, including estimating competitors' costs, product offerings, and pricing strategies; · Working with utility staff to establish a method for estimating the incremental (marginal) costs of providing service to individual segments; and · Developing recommendations for modified or new product and service offerings that provide more value to customers in all classes, and developing pricing strategies that will be effective in current markets as well as more competitive markets. Utility staff developed detailed implementation plans for the recommended options, and we worked with the staff to present final recommendations to utility executives for approval. Barakat & Chamberlin staff worked on-site and facilitated the entire planning process; this included leading a number of segment teams. 2. Competitive Intelligence. Barakat & Chamberlin designed and helped implement a noncomputer-based competitive intelligence system that continuously tracks competitors' product offerings and positioning strategies in specific market segments. 3. Market Research. Barakat & Chamberlin identified and researched varIOUS pncmg products and services. Support activities include: · Conducting a benchmarking survey of 18 North American utilities' industrial real-time pricing programs; analyzing pricing structures and terms and conditions; identifying likely customer RTP participants; and developing pricing options. · Monitoring flexible pricing options offered or being considered by utilities and regulators in numerous jurisdictions for use in designing a flexible pricing program for our client. · Conducting national benchmarking and best practices surveys of standby rates and economic development rates to evaluate potential options for our client. 4. Strategic Pricing. Barakat & Chamberlin is assisting the client with the design, pilot testing, and implementation of two strategic pricing options: a electric standby rate and a real- time pricing pilot. Our work involves evaluating target customers' needs and preferences, ~ Management Consulting 1156 E-22 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Experience and References developing the product concepts, evaluating costs and profitability, refining the product concepts, and developing marketing plans. We will also assist the client in developing a strategy for obtaining regulatory approval of the new products. Gas Cost and Rate Design Studies Potomac Electric Power Company. Barakat & Chamberlin prepared a study of Washington Gas Light's marginal costs and their implications for revenue allocation and gas rate design. We also prepared testimony on these issues for Pepco's ongoing general rate case in Maryland. City of Long Beach Gas Department. Barakat & Chamberlin assisted in developing a rate and financial analysis model that would enable the city to forecast revenues and revenue requirements, forecast Southern California Gas Company wholesale and retail rates, and forecast the city's gas rates. We also presented testimony on the proper design of wholesale gas rates before the California Public Utilities Commission. Pacific Northern Gas. Barakat & Chamberlin assisted Pacific Northern Gas (PNG) staff in preparing a cost-of-service study and developing rate designs for residential, commercial, and industrial customers. The rate design issues we helped resolve included segregation of franchise fees between incorporated and unincorporated areas, flat versus seasonal rates, appropriate rate forms for large industrial customers, and methods for determining interruptible rates. PNG submitted our report to the British Columbia Utilities Commission, and we presented testimony before the Commission on PNG's behalf. ~ Management Consulting 1156 E-23 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Experience and References References B.W. (Tommy) Thompson Fuel Procurement Director Alabama Electric Cooperative P.O. Box 550 Andalusia, AL 36420 Phone: 205-222-2571 or Damon Morgan Manager of System Planning Alabama Electric Cooperative James R. Choukas-Bradley, Esq. Partner Miller Balis & O'Neill,P.C. Suite 700, 1140 Nineteenth Street, N.W. Washington, D.C. 20036 Phone 202-296-2960 Tom Stahr, General Manager Anchorage Municipal Light & Power 1200 East First Avenue Anchorage AK 99501 Phone: 907-263-5202 or Mary Ann Pease Finance Director Anchorage ML&P Phone:907-263-5205 LeRoy 1. Reynolds, Retired Account Director Business Development Florida Gas Transmission Co. now Managing Director Enco Services Co. 2115 Lone Rock Drive Kingwood, TX 77339 Phone: 713-359-7827 J. Theodore Jackson, Esq. Rushton, Stakely, Johnston & Garrett 184 Commerce Street Montgomery, AL 36104 Phone: 205-834-8480 ~ Management Consulting 1156 E-24 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Key Professional Personnel The study will be performed by senior staff personnel of the Management Consulting Division (MCD) of Black & Veatch and Barakat & Chamberlin who have all successfully performed similar studies for utilities across the nation. The Black & Veatch Orlando office will be responsible for management, client contact, and direct supervision of all project work. Black & Veatch Mr. Mike Metzler, Project Manager, will establish project requirements, determine Black & Veatch policy matters, ensure satisfactory completion of the work, and be directly responsible for the study and all related presentations. Mr. Larry W. Loos, partner-in-charge of gas and electric studies for the Division, will be available to provide quality assurance, review study policy discussions, and to serve as project consultant regarding the issue of competitiveness, as necessary. Dr. Gael Paschall will provide expertise in the area of financial management analysis. Dr. Paschall has over 26 years of experience in strategic planning, economic feasibility analysis, financial planning, and debt issuance for natural gas, electric, and waste management projects. She has directed forecasting and financial analyses for a wide variety of utilities. Dr. Paschall has participated in the issuance of over $5.0 billion in public offerings. Mr. Ted Kelly will assist the City in the area of organization and management analysis. Mr. Kelly serves in the management consultant group specializing in the review of organization structure and reporting relationships, internal policies and procedures, staffing requirements, and administrative analysis. Mr. Kelly has over 17 years of experience with a wide variety of engagements involving management, financial, and operations studies for public and investor-owned gas and electric utilities. Mr. Tom Sullivan will provide expertise in the area of financial analysis. Mr. Sullivan serves in the management consulting group and specializes in the review of financial reports, projections, financial feasibility, revenue requirements, financial and cost accounting, cost of service, rate design, depreciation expense and contributions in aid of construction. Mr. Sullivan has over 16 years of experience in providing consulting services to numerous gas utility systems. ~ Management Consulting 1156 F-1 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Key Professional Personnel Barakat & Chamberlin Barakat & Chamberlin proposes a project team to be led by either Mr. Greg Collins or Dr. Robert Obeiter. The team will also include Dr. Ann Donnelly, Dr. Michael Donnelly, Mr. Michael Pretto, Dr. Kenneth Seiden, and Mr. Andrew Wetz. Each has extensive natural gas industry experience. · Mr. Collins, a Principal with Barakat & Chamberlin, has conducted strategic market planning studies for numerous electric and gas utilities. Mr. Collins also has helped numerous utilities develop and manage power supply and retail energy services bidding programs. In recent projects, he directed a comprehensive review and critique of an electric utility's marketing department and provided recom- mendations for reorganizing for a competitive market. He has also directed new product, service, and program development for a number of utilities and energy service companies throughout the United States. · Dr. Obeiter, a Principal with Barakat & Chamberlin, has successfully completed numerous business planning and product development projects for unregulated energy service companies. He helps utilities and energy service companies to define retail business strategies, determine how these strategies can be supported, and implement new product offerings. He also provides expert witness testimony on regulatory policy, rates and pricing, cost recovery, breach of contract, and antitrust issues. · Dr. Ann Donnelly, a Project Director with Barakat & Chamberlin, uses the expertise gained in 27 years of working on projects involving natural gas, oil, coalbed methane, and minerals in her consulting work. Her background includes projects for electric and gas utilities, power marketers, independent power producers, pipelines, and oil and gas companies. She is particularly knowledgeable about environmental and regulatory research and feasibility issues. · Dr. Michael Donnelly. a Project Director with Barakat & Chamberlin, has over 30 years experience in natural resource evaluation and acquisition, capital develop- ment, transactional due diligence, and contract negotiations for energy and utility companies throughout the United States. He provides clients with a combination of geotechnical, economic, and environmental expertise, and extensive project management experience. · Mr. Michael Pretto, a Project Director with Barakat & Chamberlin, has been an expert in gas utility costs, rates, and regulatory requirements for nearly 30 years. He possesses a detailed understanding of utility economics and regulation, and provides cost-of-service, revenue requirements, cost allocation, and rate design expertise. He has assisted clients with gas industry restructuring; strategic ~ Management Consulting 1156 F-2 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Key Professional Personnel planning; market assessment; forecasting; procurement, transportation, and storage analysis; and regulatory analysis. · Dr. Kenneth Seiden, a Project Director with Barakat & Chamberlin. has analyzed competitive economics and customer choice issues for natural gas, electricity, and heating oil markets. He specializes in competitive market assessment and strategic planning. Mr. Seiden recently assisted Mr. Collins in helping an electric utility subsidiary develop a business and marketing strategy for a new telephone service. · Mr. Andrew Wetz, a Senior Associate with Barakat & Chamberlin, has provided analytic support in many of our fuels industry projects. His experience encom- passes litigation support, project investment analysis, corporate planning, economic forecasting, merger and acquisition analysis, and regulatory and tax research. Detailed resumes for these individuals are presented in Appendix II. In addition to the staff that will be directly involved in the City's study, Black & Veatch and Barakat & Chamberlin have a large number of personnel with qualifications and experience similar to those shown herein who are available for consultation or to assist with particular aspects of the proposed study. The depth of long-term Black & Veatch and Barakat & Chamberlin personnel provides a broad range of experience readily available to the City. The staff of both firms is dedicated to meeting the requirements of this assignment. ~ Management Consulting 1156 F-3 I I I I I I I I I I I I I I I I I I 1 City of Clearwater, Florida Litigation History Black & Veatch Black & Veatch is a large international engineering and architectural firm which operates in the current environment of increasing claims and lawsuits. Nonetheless, claims and lawsuits involving Black & Veatch are relatively infrequent occurrences due to our aggressive effort in maintaining high professional standards in our work. Black & Veatch carries a complete package of insurance to protect against these claims. Whenever Black & Veatch is named as a defendant in such a claim, local legal counsel is retained for defense by our insurance carrIers. Black & Veatch regularly provides technical assistance and expert witnesses for its clients in connection with lawsuits that arise out of the clients' construction activities. Our staff includes several individuals who are expert in the techniques of litigation avoidance and claims management. In the opinion of the management of Black & Veatch, no claim or litigation currently pending will have any effect on our ability to perform this project. Bodily Injury Claims Any significant construction project involves some degree of risk to the individuals who perform the construction activities. Black & Veatch endeavors to implement effective risk management on each project to reduce its exposure to claims and litigation. Black & Veatch is the recipient of several OSHA Star awards for excellence in project safety management. In the event of a bodily injury, it has become common for all organizations, that are in any way remotely associated with the construction activity, to be named as defendants in litigation initiated by the injured individual or his survivors. From 1991 through 1995, Black & Veatch was involved in over 10,500 projects. Only one bodily injury claim resulted in final judge- ment against Black & Veatch. Construction Claims The incidence of claims by construction contractors has increased substantially in recent years. Such litigation is directed at the Owner, the design professional, and any other party that might have affected the contractor's performance. Included in every construction dispute is a wide variety of extreme claims and counterclaims that may not be supported by the record. It has become increasingly common to include in construction claims items that theoretically may be recoverable, but in reality are seldom recovered. Consequently, claims and counterclaims are often significantly inflated above their realistic value. Between 1991 and 1995, two construction claims resulted in final judgement against Black & Veatch. ~ Management Consulting 1156 G-1 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Litigation History Barakat & Chamberlin Barakat & Chamberlin has not been involved with a claim or lawsuit pertaining to its work. ~ Management Consulting 1156 G-2 I I I I I I I I I I I I I I I I I I I City of Clearwater, Florida Timeframe Black & Veatch and Barakat & Chamberlin are prepared to commence work upon receiving notice to proceed from the City. The work will be completed to meet the schedule set forth by the City in its Request for Proposals (135-96). We understand the City wishes to complete this study in as efficient manner as possible and we are prepared to commit the resources necessary to meet the City's requirements of completing the study on or before September 30, 1996. The ability to complete all work within this timeframe presumes the timely receipt of data and responses to interim reports. ~ Management Consulting 1156 H-1 I I I I I I I I I I I I I I I I 1 1 I City of Clearwater, Florida Estimated Budget Black & Veatch and Barakat &Chamberlin estimate that the enclosed Work Plan and all tasks involved will involve fees not-to-exceed $43,900. We fully understand the budget constraints facing municipal governments in this age of competition. With that in mind, we are available to discuss changes to or enhancements of certain tasks that might further address specific areas of concern to the City. We are also available to discuss specific costs at the request of the City. ~ Management Consulting 1156 1-1 I I I I I I I I I I I I I I I I I I I AGREEMENT FOR CONSULTING SERVICES 1. (Client) and Black & Veatch (Consultant) have executed this Agreement. 2. Consultant shall perform the Services described in Attachment A, Scope of Services and Client shall be responsible for all matters described in Attachment B, Client Responsibilities. 3. Client shall pay Consultant for services provided in accordance with the compensation provision set forth in Attachment C, Compensation. 4. Consultant shall exercise the same degree of care and diligence in the per- formance of the Services as is ordinarily exercised by a professional under similar circumstances. No other warranty, express or implied, is included in this Agreement or in any specification, report, or opinion produced pursuant to this Agreement. 5. Consultant shall not be liable to Client for any special, indirect, or consequential damages resulting in any way from the performance of the Services. Consultant's total liability under this contract shall not exceed Consultant's compensation under Paragraph 3, above. 6. Consultant and Client waive all rights against each other and their respective directors, officers, partners, commis- sioners, officials, agents, subcontractors, and employees for damages covered by any type of property insurance during and after the completion of the Services. 7. This Agreement may be terminated upon written notice at Client's convenience or by either party in the event of substantial failure by the other party to perform in accordance with the terms of this Agreement. In the event of termination, Client shall pay Consultant for all Services performed and termination expenses. The provisions of Paragraph 5 shall remain effective following any termination of this Agreement. 8. Nothing in this Agreement shall be construed to give any rights or benefits to anyone other than Client and Consultant. 9. Except as otherwise provided herein, documents prepared by Consultant as part of the Services shall become the property of Client, provided, however, that Consultant shall have the unrestricted right to their use. Consultant shall retain its rights in its standard data bases, computer software, and other proprietary property. Rights to intellectual property developed, utilized, or modified in the performance of the Services shall remain the property of Consultant. 10. This Agreement shall be governed by the laws in the state of IN WITNESS WHEREOF, Client and Consultant have executed this Agreement, the effective date of which shall be (Client) By Date Title BLACK & VEATCH (Consultant) By Date Title I I I I I I I I I I I I I I I I I I I Black & Veatch I I I I I I Larry W. Loos PROJECT ASSIGNMENT Partner-in-Charge EDUCA TION B.S. Mechanical Engineering, University of Missouri-Columbia, 1970 M.B.A., University of Missouri-Columbia, 1971 REGISTRA TION Registered Professional Engineer: Colorado, Indiana, Iowa, Kansas, Louisiana, Missouri, Nebraska, New Mexico, Ohio I I I I I AFFILlA TIONS AGA, ASME, MGA, MSPE, NSPE, Association of Demand Side Management Professionals I I I I RELA TED PROJECT EXPERIENCE Mr. Loos currently serves in the Management Consulting Division as Partner-in-Charge of Energy Services. Mr. Loos has been responsible for the Black & Veatch work effort on an extensive range of projects involving electric and gas utilities. Mr. Loos has worked extensively in the areas of economic feasibility, load forecasting, gas supply, cost studies, utility rates, and cost allocation; and his utility experience includes nearly every aspect of finance, operations, management, and engineering. The results of many studies have been presented before regulatory bodies. Mr. Loos has presented expert witness testimony before the Federal Energy Regulatory Commission as well as before regulatory bodies in the states of Colorado, Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, New York, North Carolina, Pennsylvania, South Carolina, Texas, Utah, Vermont, and Wyoming. He has also presented expert witness testimony before District courts in the states of Colorado, Iowa, and Nebraska and before Condemnation Courts in the states of Iowa and Nebraska. In addition, Mr. Loos has served as a special advisor to the Connecticut Department of Public Utility Control on electric and gas utility matters. I I Mr. Loos has worked extensively in the areas of gas utility rates, cost allocation, and cost studies. His gas utility experience includes nearly every aspect of finance, operations, management, and engineering. In connection with the regulation of natural gas pipelines by the Federal Energy Regulatory Commission, Mr. Loos' experience includes expert witness testimony in connection with Section 4 proceedings pertaining to Algonquin Gas Transmission Company, Columbia Gas Transmission Corporation, Panhandle Eastern Pipeline Company, Penn-York Energy Corporation, Southern Natural Gas Company, Tennessee Gas Pipeline Company, and Williston Basin Interstate Pipeline Company. In addition, Mr. Loos has served as project manager in matters involving a number of other interstate and intrastate pipelines including CNG Transmission Corporation, K N Energy, Inc., Kansas Gas Supply Corporation, Mountain Fuel Supply Company, Natural Gas Pipeline Company of America, South Carolina Pipeline Company, and Transcontinental Gas Pipe Line Corporation. Engagements involving natural gas pipelines have related to a wide range of issues including, cost allocation and rate design (both traditional and non-traditional approaches), zoning, underground storage losses, depreciation expense rates, weather normalization adjustments, damages arising from interruption in service, and reorganization. I I ~ Management Consulting LWL08 I I Larry W. Loos I I Mr. Loos has addressed an even wider range of issues in connection with his work involving gas distributors. He has been responsible for the development and preparation of various studies including cost allocation, cost and capital recovery, cost and capital recovery systems, rates and charges, revenue requirements, cost of service, economic and operating feasibility, depreciation expense rates, valuation, operations, load management, energy conservation, and cost of capital. Recent engagements have also included gas supply studies and associated economics of alternative pipeline purchase scenarios. During the course of these various studies, Mr. Loos has worked closely with client personnel involved with gas supply, legal, management, rate, financial, accounting, property records, engineering, operations, construction, marketing, and public relations functions. I I I In connection with various engagements, Mr. Loos has worked for multiple clients who share a common interest. For example, he worked with 6 distributors (and one power generation customer) served by Algonquin Gas Transmission Company in connection with a proposal to implement zones on the Algonquin system. Mr. Loos' association with 3 of these 7 customers extends back to 1980. In connection with the reorganization of Montana Dakota Utilities and the establishment of Williston Basin Interstate Pipeline Company, Mr. Loos served the Montana Consumer Counsel, North Dakota Public Service Commission, South Dakota Public Service Commission, and Wyoming Public Service Commission. In connection with regulatory matters pertaining to South Carolina Pipeline Company, Mr. Loos assisted four gas distributors. I I I In connection with valuation matters, Mr. Loos has been responsible for a number of studies directed toward the determination of the value of both utility and non-utility property. Recent engagements pertain to the determination of the value of a base-load electric generating station, an electric generating station used to meet reserve requirements, gas distribution systems, a gas transmission company, and a gas marketing company. Engagements have related to the determination of fair market value for the purpose of the sale of utility and non-utility assets and in connection with the condemnation of utility property by governmental agencies. I I Following is a representative summary of some of his relevant project experience. . Retail Cost of Service and Rate Desi~n Study. Peovles Natural Gas Comvanv of South Carolina. Mr. Loos prepared and sponsored expert witness testimony before the South Carolina Public Service Commission pertaining to the need for increased rates. In addition, he generally supervised the preparation of the material filed in support of the proposed increase. Issues addressed by Mr. Loos included the recommended required rate of return on common equity, adjustments to sales and revenues, rate design, and other cost recovery issues. I I I . Cost of Service and Rate Desi~n Study, Peovles Natural Gas Comvanv. Mr. Loos evaluated reasonableness of existing rate structures in light of current operating environment and provided expert witness testimony before the Kansas State Corporation Commission regarding class cost of service and rate design issues focusing on needs in this environment. Testimony included description of class cost of service study and the results of the analysis. Exhibits sponsored pertain to design of rates, rate impacts, and tariff sheets proposed by Peoples. Recommendations addressing the needs in light of the current environment include consolidation of existing rate schedules, associated changes in the approach used to recover cost of gas, and the treatment of customers served in competitive markets. Other engagements I I I I ~ Management Consulting 2 LWL08 I I I I I I I I I I I I I I I I I I I Larry W. Laos on behalf of Peoples have included cost of service and rate design studies in the People's Colorado, Iowa, and Kansas jurisdictions. In addition, Mr. Loos assisted Peoples in connection with feasibility studies in Iowa and Nebraska and in condemnation mattes in Iowa. . Cost of Service and Rate Desi~n Studies, Midwest Gas. Mr. Loos provided expert witness testimony concerning avoided gas cost applicable to gas utility operations as well as estimated cost recovery factors associated with recovery of costs associated with the utility's energy efficiency program. In other engagements, he has testified regarding jurisdictional and class cost of service studies, rate design, and cost recovery issues in connection with filing for a gas rate increase before the Iowa Utilities Board and Minnesota Public Service Commission. . Cost of Service and Rate Desif.m Studies, Midwest Power. Mr. Loos provided expert witness testimony regarding jurisdictional and electric class cost of service studies, rate design, and cost recovery issues in connection with filings for electric rate increases before the Iowa Utilities Board. . Lon~ Ran~e Natural Gas Demand Study, Oran~e and Rockland Utilities. Mr. Loos supervised a long range natural gas demand study which included the development of long-term customer and peak day sendout for each of Orange and Rockland's divisions. Other engagements for Orange and Rockland have included investigations of feasibility of additional pipeline inter- connections, adequacy of the level of contracted-for-underground gas storage, weather data used in connection with gas utility operations, and pipeline rate proceedings. . Lon~ Ran~e Gas Supply Study; York, Lancaster, and Chester County Natural Gas Authorities. For each Authority, Mr. Loos supervised studies which included the (1) development of normal and design day temperature conditions for Winthrop College, South Carolina; (2) forecast growth in numbers of customers, sales, system annual requirements, and system peak day requirements based on weather data, historical gas sendout, sales, and number of gas customers; and (3) the determination of and recommendations regarding the most economical mix of supplies to meet both current and forecast annual and peak day requirements. . Analvsis of Cash Flow Requirements; York, Lancaster, and Chester County Natural Gas Authorities. For each Authority, Mr. Loos supervised the analysis of historical and forecast cash flow requirements, the preparation of recommended levels of debt financing and rate increases to meet future requirements, the development of natural gas tariffs, and a recovery system to assure proper recover of gas costs. This recovery mechanism allows recovery of all gas costs on an annual basis while simultaneously levelizing the unit cost recovered from month to month. . Analysis of Milea~e Based Rates, Oran~e & Rockland Utilities. Mr. Loos prepared and presented expert witness testimony before the Federal Energy Regulatory Commission regarding the reasonableness of implementing mileage based or zoned rates on the Columbia Gas Transmission System. This testimony was filed in response to proposals to implement zone rates in the Columbia system by other intervenors. ~ Management Consulting 3 L WL08 I I I I I I I I I I I I I I I I I I I Larry W. Laos . Analysis of Contributions in Aid of Construction. Colorado SprinJ~s Department of Utilities. Mr. Loos prepared studies and supervised analysis directed toward the fair and equitable recovery of costs through the Department's electric utility line extension and contribution in aid of construction policies. . Retail Cost of Service and Rate Desizn Applicable to Larze Volume Mainline Transportation Service. Midwest Gas Company. Mr. Loos prepared and presented expert witness testimony in response to litigation between Midwest Gas and a large volume customer. In this regard, he sponsored Midwest's proposed rate changes and tariff provisions before the Iowa State Utilities Board. The proposed rate and tariff provisions were developed in response of requirement to continue service to customer after customer had bypassed the distribution system. . Jurisdictional Cost Allocation. Wholesale Cost of Service and Rate Desizn. Wholesale Customer Group Served by South Carolina Pipeline Corporation. Mr. Loos prepared and presented before the South Carolina Public Service Commission, an analysis of the cost to serve appropriate rate levels and tariff provisions associated with serving wholesale customers. This wholesale customer group included the City of Bamberg, City of Bennettsville, City of Orangeburg, the Greenwood Commission of Public Works, the City of Winnsboro, Chester County Natural Gas Authority, Lancaster County Natural Gas Authority, Piedmont Natural Gas Company, York County Natural Gas Authority, Peoples Natural Gas Company of South Carolina, the City of Union and the Fort Hill Natural Gas Authority. Specific issues addressed included the allocation of peaking costs, allocation of transmission system costs, exploration investment, and level of sales. . Wholesale Power Contract Assistance, Oranzeburz. Sc. Mr. Loos supervised a review and analysis of South Carolina Electric and Gas Company's FERC application for increase in electric rates. This study focused on identification and quantification of cost of service allocation and rate design issues related to wholesale service to Orangeburg. The results of the analysis were incorporated in intervenor proceedings. . Analysis of AlzonQuin Gas Transmission System. Various Customers. Mr. Loos prepared and presented expert witness testimony before the Federal Energy Regulatory Commission on behalf of Central Hudson Gas and Electric Corporation, Connecticut Natural Gas Corporation, Consolidated Edison Company of New York, Inc., New England Power Company, Orange and Rockland Utilities, Inc., Southern Connecticut Gas Company, and Yankee Gas Services Company. This testimony addressed the need to implement rate zones on the Algonquin system. Mr. Loos proposed zone rates in order to recognize differences in cost arising from distance of haul. . Review and Analysis of Proposals by Great Lakes Gas Transmission Limited Partnership. Northern States Power Company (NSP). Mr. Loos investigated the proposal presented to the Federal Energy Regulatory Commission by Great Lakes Gas Transmission Limited Partnership regarding backhaul transportation rates and the controversy over incremental pricing of service. Mr. Loos prepared expert witness testimony and made recommendations on the ~ Management Consulting 4 L WL08 I I I I I I I I I I I I I I I I I I I Larry W. Laos treatment of NSP in connection with system expansion issues (incremental pricing) and the appropriate rate to be charged for open access backhaul transportation service. . Depreciation Expense Rate Study, Black Hills Power and Lir<ht (BHP&L). Mr. Loos super- vised preparation of a study of the adequacy of BHP&L existing depreciation expense rates applicable to its electric utility property. Included in the study were recommended depreciation rates which should be implemented if the company concluded to change rates. Depreciation expense rates were developed following both whole life and remaining life concepts. Subsequent to the completion of his original study, Mr. Loos supervised the development of revised depreciation expense rates to incorporate the effect of a change is estimated retirement date associated with one of BHP&L's generating stations. . Depreciation-Expense Rate Study, Empire District Electric Company (Empire). Mr. Loos recently served as partner-in-charge in connection with the successful completion of a depreciation expense rate study applicable to the electric utility properties of Empire. The study was required in order for Empire to meet Missouri Public Service Commission rules which require a utility to file a recent depreciation expense rate study in connection with filing for rate increase before the Commission. The completed study was filed with the Commission. . Wyodak Generatinr< Station Valuation, Black Hills Power and Lir<ht (BHPL). Mr. Loos supervised a study directed toward the determination of the value for the purpose of the sale of the plant by the Lessors to the Lessees. Cost and revenue streams were evaluated for both the remaining term of the lease as well as following lease expiration. The determination of fair market value included consideration of the potential liabilities associated with the cost of dismantling and removing the plant as well as the salvage value associated with the plant and spare parts. . Steam Generatinr< Plant Valuation, Confidential Client. Mr. Loos directed a study of the value of a plant which is used primarily for the purpose of meeting reserve capacity requirements. This gas and oil fired steam generating plant was originally constructed in 1957. For a number years, the plant served to meet base and intermediate capacity requirements. Due to its age and cost of operation, the plant now operates very infrequently. Because of the nature of the engagement and since the disposition of the plant has not been determined, further details regarding the nature of the plant must remain confidential. In determining the value of this facility a number of factors were considered. The principle factors affecting value of this plant center on the potential use of plant components in connection with a repowering scheme and environmental cost. Environmental costs primarily are associated with of asbestos removal and the clean-up of oil and other hazardous waste associated with oil storage facilities on the site. . System Load Forecastinr<, Inter<rated Resource Planninr<, and Demand Side Manar<ement, Black Hills Power and Lir<ht (BHPL). Mr. Loos prepared and presented to the Wyoming Public Service Commission expert witness testimony sponsoring the BHPL system load forecast, recommendations regarding rates to improve efficiency in BHPL's operations, and integrated resource planning. ~ Management Consulting 5 L WLOB I I Larry W. Laos I In-Service Criteria Associated with Environmental and Safetv Equipment Improvements to Existin~ Electric Generatin~ Plant, Missouri Public Service Company. Mr. Loos prepared expert witness rebuttal testimony addressing the reasonableness of Missouri Public Service Commission Staff proposed criteria regarding plant performance requirements which the plant must meet prior to the cost of such improvements being included in rate base. I I I I I I I I I I I I I I I I ~ Management Consulting 6 LWLOB I I Michael L. Metzler I PROJECT ASSIGNMENT Regional Manager I EDUCA TION B.S., Civil Engineering, 1965, University of Kansas M.B.A., 1967, University of Kansas I REGISTRA TION Registered Professional: Florida, Missouri, Kentucky I AFFILlA TIONS AWWA, WEF I I RELA TED PROJECT EXPERIENCE Mr. Metzler serves as regional manager for the firm's Management Consulting Division. His experience in management services covers water, wastewater, electric, gas, and solid waste utilities for a large number of public and investor-owned systems. His project assignments include cost of service and rate studies, operations reports, valuations, depreciation studies, preparation of official statements for revenue bonds, impact fee analysis, and economic studies. As required by indentures or ordinances authorizing debt obligations, Mr. Metzler has prepared engineering reports and certificates of property condition and adequacy of maintenance. Mr. Metzler has provided expert testimony before state regulatory commissions and governing bodies of public utilities. I I I · City of Homestead, Florida. Mr. Metzler prepared detailed analyses and reports on revenue requirements and rates for the City's water and wastewater utilities. I · City of Tallahassee, Florida. Mr. Metzler supervised a study which included a comprehensive forecast of income and revenue requirements, and development proposed wholesale and retail rates for the City's water and wastewater utilities. . Florida Cities Water Company, Fort Mvers, Florida. Mr. Metzler was responsible for the preparation of a used and useful study for the Company's Fiesta Village advanced wastewater treatment plant in South Fort Myers. The Company's investment, along with a determination of proforma investment, was properly includable in rate base in accordance with established policies of the Florida Public Service Commission. I I . Kissimmee Utility Authority, Florida. Mr. Metzler has been the Authority's chief rate and financial consultant for ten years. His services have included comprehensive review and adjustment to the Utility's cost of service and rate structures as well as financial advisory services with respect to alternative methods of financing significant capital investment. Innovative rate and revenue policy has enabled the Authority to handle double digit growth for over a decade with virtually no increase in base electric rates. I I I . Manatee County, Florida. Mr. Metzler is responsible for ongoing studies conducted on behalf of the County's utility department with respect to utility operations. Initial phases of the work consist of a comprehensive rate study for the Department's utilities along with computer rate I I ~ Management Consulting 1 MLM02 I I I I I I I I I I I I I I I I I I I Michael L. Metzler models to allow Department staff to conduct future rate analysis. In addition, Mr. Metzler is advising the Department on the relative merits of alternative income sources to operate and finance the County's new reclaimed water system. . Miami-Dade Water and Sewer Deoartment. Miami. Florida. Mr. Metzler was responsible for a study which determined the condition and adequacy of the maintenance of water and wastewater assets, and analyzed the adequacy of rates and sufficiency of reserve fund balances. Other related project assignments included preparation of a report for the Official Statement to determine the feasibility of issuing revenue bonds to finance scheduled improvements of more than $600 million. Additional assignments included preparation of a report which analyzed and recommended allocation procedures for administrative and general expenses including capitalization procedures. . Orlando Utilities Commission. Florida. Mr. Metzler has given financial consulting services to the Commission over a 15 year span, most recently in 1993. He has conducted comprehensive cost of service and rate studies which provide the foundation of the Utility's annual review of rate adequacy. An in depth cost of service computer model developed for the Commission has far exceeded the normal life span of software and remains in use today. Mr. Metzler has conducted revenue bond feasibility studies for numerous issues comprising over $1 billion of short term and long term debt securities. In addition, Mr. Metzler has made presentations before bond rating agencies and bond insurance companies. Other studies conducted by Mr. Metzler on behalf of the Commission including property valuations, impact fee analysis, review of staff analysis, and off-peak rates. . Owensboro Municipal Utilities. Owensboro. Kentucky. Mr. Metzler led a study which deter- mined equitable methodology of assessing wholesale customers for water service and developed a comprehensive contract for wholesale water service. . Utilities Commission, City of New Smvrna Beach. Florida. Mr. Metzler has provided a wide variety of consulting services to the Commission's utility operations. These services have included cost of service and rate analysis of all the Commission's utilities as well as assistance in the issuance of revenue certificates (bonds). Mr. Metzler has successfully negotiated with the staff of the Florida Public Service Commission regarding the structure of the Utility's electric rates. He also conducted a feasibility analysis which determined that a planned acquisition of a large distribution system would not result in rate increases to existing customers. Mr. Metzler has prepared operations reports consisting of analysis inspection of the Commission's physical assets to determine property condition and maintenance as well as the adequacy of revenue to meet the financial requirements of the respective utility systems. . Water Department. City of Tampa. Florida. Mr. Metzler has prepared an operations report and revenue bond feasibility study for the City's water department. The unique feature of the feasibility study was an extremely short time schedule which was met by the firm. The operations analysis included a determination of adequacy of maintenance of the Department's facilities, an analysis of the adequacy of revenue, and suggestions on rate structure. ~ Management Consulting 2 MLM02 I I I I I I I I I I I I I I I I I I I Michael L. Metzler PUBLICA TIONS/PRESENT A TIONS "Florida Utility Rate Structures: What's Happening," co-authored with Marisa D. Peterson, presented at the Florida Water Resources Conference, Orlando, Florida. "How Much is Wastewater Service in Florida?" published in the Florida Water Resource Journal. ~ Management Consulting 3 MLM02 I I I I I Gael Penland Paschall, Ph.D. PROJECTAS~GNMENT Executive Consultant EDUCA TION B.A., Economics, University of Florida M.S., Management, Rollins College M.A., Economics, University of Florida Ph.D., Economics, University of Florida I PROFESSIONAL HISTORY Resource Management International, Inc., Executive Consultant I I I I Raymond James & Associates, Inc., Assistant Vice President, Public Finance M.G. Lewis Econometrics, Inc., Consulting Economist University of Central Florida, Visiting Professor in Economics R.W. Beck and Associates, Principal Economist and Supervisor of Economic Services I I I I I I PROFESSIONAL AFFILlA TIONS American Economic Association HONORARY SOCIETIES Phi Beta Kappa H.B. Earhart Fellow Phi Kappa Phi REPRESENT A TIVE PROJECT EXPERIENCE Dr. Paschall is an executive consultant in the Management Consulting Division, with over 26 years of experience in strategic planning, economic feasibility analysis, financial planning, and debt issuance for natural gas, electric, and waste management projects. She has directed forecasting and financial analyses for a wide variety of utilities. Dr. Paschall has participated in the issuance of over $5.0 billion in public offerings. I I Prepared consultant's reports in support of five tax-exempt revenue bond financing for a consortium of municipal natural gas utilities. Total bond proceeds of approximately $140 million were used to finance the acquisition of overriding royalty interests in natural gas wells in Texas, Louisiana, and offshore Texas and Louisiana. This assignment included a review of the authority's load forecast, capital and operating costs and other factors necessary to assess the financial feasibility of the projects. I ~ Management Consulting 1 GPP03 I I Gael Penland Paschall, Ph.D. I Conducted a cost of service and developed service charge rates for a natural gas joint action agency. The study included an evaluation of administrative and general expenditures by the agency; determination of additional agency costs; development of an average $/MMBTU charge to recover the agency's annual operating costs; and recommendation of an allocation approach and resultant service charging mechanism for recouping costs associated with various gas services (e.g., administrative, natural gas procurement, regulatory assistance). I I I Conducted an independent analysis and review of the fuel price forecasts utilized by a public utility in determining economic feasibility of alternative generating resources. Recommended additional sensitivity cases be examined due to relatively high fuel price forecasts for natural gas and relatively low fuel price forecasts for coal. Project feasibility was ultimately reversed due to revisions to the fuel price forecasts. I I Directed the analyses, preparation and summarization of historical and projected financial data for inclusion in a large state public service authority's triennial report to bondholders. Project included an analysis of projected operating results, numerous financing arrangements, multiple bond issuances, and varying debt service schedules under four separate bond resolutions encompassing priority obligations, subordinated debt and mini-bonds. I I Provided economic and analytical assistance in preparation of a case against a large pipeline company that had diverted natural gas supplies from various municipal utilities in favor of an investor-owned utility. Assisted in the preparation of documents and analytical studies leading to settlement. I Prepared an assessment of the potential effects of deregulation of natural gas sales on interruptible customers. I Conducted a review and assessment of the forecasting methodology and approach utilized by a municipal natural gas authority. Forecasted throughput was used in support of a series of tax-exempt revenue bond financings. I Prepared a survey and analysis of natural gas prepay contracts in effect nationwide. Compiled information on the purchase of natural gas reserves, contractual prepayment arrangements and the use of tax-exempt financing for natural gas acquisition. I I Responsible for the evaluation of numerous financing instruments as alternatives to long-term revenue bonds in reducing overall costs for a joint action agency. Designed a tax-exempt commercial paper program for the agency and developed appropriate investment and amortization schedules in accordance with governmental regulations and bond resolution covenants applying to arbitrage restrictions, application of investment earnings, and constraints to debt retirement. I I Prepared projected operating results and alternative senSItIvity cases for a wide array of utilities in conjunction with numerous bond financings. Studies included maintenance of debt service ratios, stability of overall rates, funding of capital improvements, estimates of purchased power costs, and comparisons of alternative financing scenarios. I I ~ Management Consulting 2 GPP03 I I Gael Penland Paschall, Ph.D. I I Conducted a review and assessment of the forecasting methodology and approach utilized in preparing an agency's forecast of energy and demand requirements in conjunction with the issuance of over $3.9 billion in refunding revenue bonds. I Prepared forecasts of revenues and debt service coverage in connection with consultant's reports for numerous tax-exempt financings for a variety of utilities. Directed and participated in the preparation of financial projections for inclusion in a wide variety of bond financings for various electric and natural gas utilities. I Assisted in an evaluation of bids from two investor-owned utilities (IOOs) seeking to purchase a public utility commission's electric distribution system. Evaluation included the development of a long-range load forecast; discussions with state regulatory officials regarding system and ratepayer concerns; and, an assessment of valuation calculations for the commission's water system. I I Conducted research and analysis pertinent to a large LDC's efforts to expand its system. Presented arguments and rationale for such expansion to a neighboring governmental area whose citizens were not currently receiving natural gas service. Convinced the neighboring area's management that commencing natural gas operations on its own was not feasible given local pipeline expansion plans and availability of FTS. I I Conducted a preliminary scoping study outlining the steps required for a municipality to acquire its distribution system from an investor-owned utility. I Facilitated the development of a mission statement and strategic plan for one of the country's largest joint action agencies. Handled in-depth interviews and working sessions with the Board of Directors, management and staff. Assisted in the writing of individual corporate goals and action plans. I I Assisted in a charter review for a municipal utility seeking to address issues such as water and sewer extension policies, utility transfers to the City, and terms of office for utility board members. Conducted a survey of comparable regional and national utilities to provide an overview of their organizational structures and charters. I Responsible for an independent analysis of the reasonableness of a major federal power marketing agency's forecasting methodology. The forecast was utilized in support of a financial restructuring and return to the capital markets subsequent to a bond default. I I Presented expert testimony before a state regulatory body regarding the request by a natural gas company for an attrition adjustment, which would effectively increase the company's overall rate of return. I Assisted a natural gas joint action agency in developing service fees for non-member industrial customers. I I ~ Management Consulting 3 GPP03 I I Gael Penland Paschall, Ph.D. I Participated in utility rate studies including determination of revenue requirements and cost of service allocations. I Prepared various presentations for city councils, utility boards, and public service commissions on financial, economic, and forecasting subjects. I Presented workshops on forecasting, economics, and financing to city councils, utility boards, and public utility commissions. I Developed training seminars and program documentation for users of various load forecasting models and other analytical software. I I I I I I I I I I I I I ~ Management Consulting 4 GPP03 I I Ted J. Kelly I PROJECT ASSIGNMENT Project Engineer I EDUCA TION University of Missouri-Rolla, B.S., Economics, 1977 Indiana University, M.B.A., Utility Regulation and Management, 1983 I AFFILlA TlONS American Management Association I RELA TED PROJECT EXPERIENCE Mr. Kelly serves as project manager, assistant project manager, economist, and staff assistant on a variety of projects, including electric, gas, water, wastewater, and solid waste utility studies involving analysis of utility operations, management, organization, and business planning. Mr. Kelly also serves as the college recruiter for the Management Consulting division and is responsible for conducting interviews and providing recommendations about potential employees. Mr. Kelly's experience in conducting informal interviews designed to analyze the functional elements of planning, activity, control, and communications linkages within an organization provides unique capabilities for assessing management needs and problems. I I I I Mr. Kelly has assisted utilities in developing business plans with the purpose of establishing goals, strengthening long-range strategic financial plans, and considering organizational restructuring. He has conducted extensive data collection, interviews, and evaluations regarding markets, services, development programs, organization and management structure. He assisted with the conduct of a retreat to develop an overall business plan for organizational restructuring. I I Mr. Kelly has prepared numerous studies which have included preparation of engineer's reports to be included in official statements for revenue bond issues. These reports included reviews of financial plans, accounting procedures, debt service requirements, and historical and projected revenues and expenses. Mr. Kelly has also prepared reports on utility operations as required by bond resolution. These reports included annual reviews of audits; accounting practices and procedures; billing records; operating policies; bond ordinances and resolutions; financial operating results; organization, manage- ment, and general operations of the business; operation and maintenance procedures; capital program plans; and inspection facilities for adequacy of maintenance and equipment conditions. I I I I Following is a representative summary of some of his relevant project experience. . Electric Division and Proposed Enzineerinz Department, Westerville, Ohio. Prepared a management study of the Electric Division and Proposed Engineering Department for the City of Westerville. The primary objective of the study was to identify the most efficient staffing levels and organizational structure to handle all current and future service demands. Provided an assessment of organization structure, staffing levels, functions, and operations, as well as present levels of service delivery. Prepared an overview perspective of existing information technology status and direction for future enhancements. I I I ~ Management Consulting 1 T JK11 I I I I I I I I I I I I I I I I I I I --- ---- - Ted J. Kelly . Department of Municipal Service, Wyandotte, Michi~an. Prepared an evaluation of the organization and operations of the municipal power plant and prepared a ten-year financial plan for the combined utility system. The evaluation of the power plant included identifying strengths and potential areas for improvement with the existing organization, staffing levels, and operating procedures. . lIE/USAID Trainin~ Pro~ram on Utility and Industry Ener~y Conservation. Provided assistance with portions of a training program on energy conservation. Included in this were instructions on how to set up and implement an energy conservation program and energy audit program. . Confidential Client - Or~anizational Restructurin~. Conducted a retreat and assisted in the preparation of a report for the purpose of developing an overall business plan for organizational restructuring. . Kin~ County Solid Waste Division - Development of a Capital Improvement Pro~ram Mana~ement Plan. Reviewed capital improvement programs, evaluated staff, resources, and the existing improvement program management systems, prepared and presented recommendations and implementation strategies for a management information system designed to meet organizational and management needs for overseeing the capital improvement programs. . Southwestern Power Administration - Abbreviated Internal Control Reviews. Annually conducted reviews of various assessable units of the Southwestern Power Administration. Internal control comprises the plan of organization, methods and procedures adopted by management to provide reasonable assurance that program objectives are achieved efficiently and that assets and resources are safeguarded against waste, loss, mismanagement, unauthorized use, or misappropriation. . Grand River Dam Authority. Prepared triennial report on operations and prepared engineer's report for bond sale. . Owensboro Municipal Utilities. Reviewed operations and forecast debt service coverage for the purpose of issuing electric and water revenue bonds and electric refunding revenue bonds. Prepared engineer's reports for each of the bond issues. Additional service have included financial computer modeling and rate design studies. . Hastin~s Utilities. Prepared consulting engineer's report for the issuance of electric revenue refunding bonds. Prepared biennial reports on operations since 1978. Additionally, prepared electric rate design studies. . Public Utilities District No.2 of Grant County. Prepared triennial report as required by bond ordinance covenants on five separate occasions. Prepared consulting engineer's reports for eight separate revenue bond issues since 1988. PUBLICA TIONS/PRESENTA TIONS ~ Management Consulting 2 T JK11 I I I Ted J. Kelly "Energy Services That Build Customer Loyalty," presented at the Texas Public Power Association Communications & Customer Service Annual Conference, San Antonio, Texas, March 28, 1996. I "Customer Service and Community Service: If It's Hot, You're Not," presented at the Texas Public Power Association Annual Meeting, San Antonio, Texas, August 29, 1995. I "Rates and Strategic Planning," presented at the Texas Public Power Association Annual Meeting, Austin, Texas, August 29, 1994. I "Rates and the Strategic Planning Process," presented at the American Public Power Association Advanced Rate Design Course, Denver, Colorado, March 25-26, 1993. I I I I I I I I I I I I I ~ Management Consulting 3 T JK11 I I I I Thomas J. Sullivan PROJECT ASSIGNMENT Project Manager EDUCA TION B.S., Civil Engineering, University of Missouri-Rolla, 1980 M.B.A., Finance, University of Missouri-Kansas City, 1985 I I REGISTRA TION Registered Professional Engineer: Missouri AFFILlA TIONS American Society of Civil Engineers (ASCE) - Member I HONORARY SOCIETIES Tau Beta Pi Phi Kappa Phi Chi Epsilon Beta Gamma Sigma I I I I RELA TED PROJECT EXPERIENCE Mr. Sullivan has served as project manager and project engineer on a broad range of projects involving gas and electric utilities. Engagements have included numerous class cost of service studies, rate design, long-term electric demand and energy forecasts, economic feasibility of utility acquisitions, valuation analyses, cost of purchased gas recovery mechanisms, gas demand and supply studies, and depreciation rate studies. Mr. Sullivan has prepared direct and rebuttal testimony and exhibits on numerous occasions for expert witnesses and has also testified on revenue requirements for a natural gas utility before the South Carolina Public Service Commission and has filed testimony on class cost of service and class peak day demand requirements before the Iowa Utilities Board. Following is a representative summary of some of his relevant project experience. I I I I · Deoreciation Rate Study. Missouri Gas Ener~y. Mr. Sullivan served as project manager in connection with the development of a depreciation rate study for filing with the Missouri Public Service Commission. · Sales. Ener~y. Peak. and Customer Forecasts. Cost of Service and Deoreciation Rate Studies. Black Hills Power and Li~ht Comoany. Mr. Sullivan developed monthly class and jurisdictional sales and customer forecasts and monthly system energy and peak forecasts. Other responsibilities have included development of allocation bases for cost of service studies, development of depreciation accrual rates by FERC account, and the study of demand side management options. I . Valuation of Electric Utility. Indianaoolis Power and Li~ht Comoany. Mr. Sullivan served as project manager in connection with the determination of the fair value of IPL's electric utility properties. This determination of fair value was used in IPL's recent electric rate case for fair value rate base. I I I ~ Management Consulting 1 TJS04 I I I I I I I I I I I I I I I I I I Thomas J. Sullivan . Incremental Cost and Revenue Requirements Models. Municipal Electric Authority ofGeor~ia (MEAG). Mr. Sullivan is serving as project manager in connection with the development of two spreadsheet based computer models for MEAG. The Incremental Cost Model is designed to measure short run impacts on Partipants when load is added or lost. The Revenue Requirements Model is designed to project MEAG's revenue requirements for a 20 year period. . Class Cost of Service. Terra Nitro~en. LP. Mr. Sullivan served as project manager in connection with intervenor expert witness testimony and exhibits filed in Oklahoma Natural Gas' (ONEOK or ONG) recent rate case before the Oklahama Public Service Commission. The issues addressed consisted primarily of the proper allocation of costs to the customer classed served by ONG. . Cost of Service Data Svstems. Las Cruces. New Mexico and Rio Grande Natural Gas Association. Mr. Sullivan has served as project manager in connection with services to the gas utility of the City of Las Cruces, New Mexico and the Rio Grande Natural Gas Association. These services have included recommending accounting changes so that costs are tracked in a manner consistent with cost of service principles, performing load studies, reviewing class cost of service studies, assisting in the development of fixed asset accounting and work order systems, designing cost of gas recovery mechanisms, recommending initial depreciation accrual rates, and recommending an approach to determining the appropriate rate of return for "utility basis" cost of service studies. . Cost of Service and Rate Desi~n Studv. Peoples Natural Gas. Mr. Sullivan has developed class cost of service and rate design analyses in connection with filings for gas rate increases before the Iowa Utilities Board and the Kansas Corporation Commission and developed weighting factors used in connection with gas cost of service studies. Mr. Sullivan filed testimony before the Iowa Utilities Board supporting a class cost of service study and the development of peak day allocation bases based on statistical analysis. Other responsibilities have included assistance with valuation, energy efficiency plan filings, weather normalization, and competition. . Cost of Service and Rate Desi~n. K N Ener~v. Inc. Mr. Sullivan has developed numerous, jurisdictional and class cost of service studies and rate design analyses in connections with filings before the Federal Energy Regulatory Commission, Kansas Corporation Commission, and municipalities in Nebraska. Other responsibilities have included review of K N's Order 636 filing, valuation of gas utility properties, development of computer models and litigation assistance. . Cost of Service and Rate Desi~n Studv. Midwest Gas. Mr. Sullivan developed jurisdictional and class cost of service studies in connection with filings for gas rate increases before the Iowa Utilities Board, Minnesota Public Utilities Commission, South Dakota Public Utilities Commission, and Nebraska City Councils. Other responsibilities included development of avoided gas cost applicable to gas utility operations and estimated cost recovery factors associated with the utility's energy efficiency plan, and the development of customer weighting factors used in connection with the gas cost of service studies. I ~ Management Consulting TJS04 2 I I I I I I I I I I I I I I I I I I Thomas J. Sullivan . Cost of Service. Rate Desifm. and Weather Normalization Studies. Midwest Power. Mr. Sullivan developed jurisdictional and class cost of service studies in connection with filings for electric rate increases before the Iowa Utilities Board and the South Dakota Public Utilities Commission. Other responsibilities have included the development of pro forma revenues and sales (kWh) adjustments to reflect normal weather conditions and the development of cost recovery factors associated with the utility's energy efficiency plan. . Lonf?-Ranf?e Natural Gas Demand Study. Oranf?e and Rockland Utilities. Mr. Sullivan completed a long range natural gas demand study which included the development of long- term customer and peak day demand forecasts for each customer class and peak day sendout of Orange and Rockland's divisions. Other engagements for Orange and Rockland have included investigations of feasibility of additional pipeline interconnections, adequacy of the level of contract-for-underground gas storage, weather data used in connection with gas utility operations, and pipeline rate proceedings (predominantly with regard to mileage based rates). . Lonf?-Ranf?e Gas Supply Study; York. Lancaster. and Chester Countv Natural Gas Authorities. For each Authority, Mr. Sullivan provided studies which include (I) development of normal and design day temperature conditions for Winthrop College, South Carolina; (2) forecast growth in numbers of customers, sales, system annual requirements, and system peak day requirements based on weather data, historical gas sendout, sales, and number of gas customers; and (3) the determination of and recommendations regarding the most economical mix of supplies to meet peak day capacity requirements for today and in the future. . Analysis of Cash Flow Requirements; York. Lancaster, and Chester Countv Natural Gas Authorities. For each Authority, Mr. Sullivan analyzed the historical and forecast cash flow requirements of the Authorities, recommended appropriate levels of debt financing and rate increases to meet future requirements, developed natural gas tariffs, and developed a cost of gas recovery mechanism which recovers all gas costs on an annual basis while simultaneously levelizing the unit cost recovery amount charged from month to month. . Lonf? Ranf?e Gas Supply Studv. Rate Desif?n. Cost of Gas Analysis. Citv of Oranf?eburf? South Carolina. Department of Public Utilities. Mr. Sullivan has provided assistance to both the gas and electric divisions for the Orangeburg DPU. The gas related assistance has included gas supply and demand studies, electric supply and demand study development of purchases gas cost racking models, feasibility studies, rate design, and assistance with the DPU's intervention in South Carolina Pipeline rate filings. . Cost of Service and Rate Desif?n. Mesa. Arizona. Mr. Sullivan recently completed a rate study for Mesa's gas utility. This study required the forecasting of sales, number of customers and revenues, forecasting revenue requirements, forecasting capital improvements, an assessment of rates of a neighboring investor-owned utility, and design of rates. I ~ Management Consulting TJS04 3 I I I I I I I I I I I I I I I I I I I Barakat & Chamberlain, Inc. I I I I I I I I I I I I I I I I I I I MICHAEL F. DONNELLY, Ph.D. Project Director EXPERIENCE Project Director (1993 to present) Barakat & Chamberlin, Inc. Provides a combination of geotechnical, economic, and environmental expertise for energy projects nationall y, including natural resource evaluation and acquisition, capital development, transactional due diligence, and contract negotiations. Focus is on comparative economic analysis of interfuel and power competition and displacement, risk management of pricing components, integrated resource planning, and strategy for market retention and capture. Clients include electric and gas utilities, nonutility generators, natural resource companies, and legal firms throughout the United States and Canada. Principal Executive Consultant (1992) Resource Management International, Inc. Managed projects for electric and gas utilities, nonutility generators, fossil fuel producers and transporters, and others in the energy industry. Projects included designing integrated multiple-fuel portfolios, negotiating fuel and power contracts. Managed transactional due diligence on project acquisitions, financing, and syndication. Developed new resource markets nationally. Executive Vice President (1990 to 1992) Resource Solutions International, Ltd. Co-founder of this Washington corporation to provide energy development and environmental assessment/remediation services. Chief scientist and project manager in fossil fuel and geothermal development and environmental assessment. Managed economic evaluations, financing, and development of power projects throughout North America. Developed power purchase, thermal sales, and transmission agreements, and fuel contracts. Provided fuel procurement design and management services to major cogeneration projects in the United States and Canada. Vice President, Strategic Planning and Special Projects; Business Development; Acquisitions; and Exploration (1987 to 1989) NERCO Oil & Gas/ NERCO Minerals (Subsidiaries of PacifiCorp) Developed opportunities for significant new earnings and asset growth. Identified major merger candidates. Provided leadership for growth. Identified and recruited professional staff for financial turnaround and company restructuring. Identified and acquired $620 million in gas and oil reserves. Played a key role in achieving first-time profitability for NERCO Oil & Gas. Was responsible for negotiating a 25-year gas-for-coal "Btu exchange" contract for a major Gulf Coast utility. Contracted for 1.5 trillion cubic feet of gas. Negotiated supply or transportation contracts with most major U.S. pipelines. Was executive in charge of developing synergies between oil/gas and coal subsidiaries. I I I I I I I I I I I I I I I I I I I Michael F. Donnelly Page 2 President (1981 to 1987) Denver-Alaska Oil Company Co-founder of this independent oil and gas company. Identified and generated exploration drilling programs in the United States, including Alaska. Managed operations, coordinated scientific, land/legal, and environmental work. Drilled approximately 25 wells per year, with average operating budgets of $4 million per year on over 100,000 net acres of leasehold. Identified and secured qualified domestic and foreign venture capital. Vice President, Manager of Exploration, and Chief Scientist (1976 to 1981) Resource Associates of Alaska, Inc. Achieved diversification into eleven western states for energy minerals and metals exploration and designed programs for midcontinent and Eastern United States. Established two operating offices. Directed acquisition and evaluation of 20 properties with annual budgets of up to $5 million. Identified and developed major contracts totalling $18 million from two major electric utilities. Designed and carried out exploration/development programs, prepared budgets and supervised land acquisition throughout 200,000 square miles of prospective acreage. Discovered a 1.5 to 3.0 million recoverable ounce gold deposit. Directed the discovery of the largest sedimentary uranium deposit discovered in Alaska to date. Led a multimillion dollar exploration program covering 70,000 miles of interior Alaska. Chief Geothermal Geologist and Senior Petroleum Geologist (1974 to 1976) Occidental Petroleum Corporation Initiated a major geothermal program, performing evaluations of over 10,000 square miles of the Western United States and Gulf Coast. Developed the Geysers geothermal field. Managed the acquisition of Anshutz's 300,000 acres of geothermal properties. Developed a program for direct electrical power generation and binary, heat-exchange technology from geothermal energy. Responsible for prospect generation and drilling in the onshore and offshore Pacific region. Performed a field study covering 1,000 square miles of unmapped terrain in Baja, California. Participated in the discovery and development of two major gas fields in onshore California. Associate, Principal-in-Charge, Senior Project Manager (1976 to 1981) Dames & Moore Developed multimillion dollar projects in the private sector and government relating to terrestrial and marine geotechnical and environmental studies. Supervised or co-authored over 80 multidisciplinary reports of geotechnical, groundwater, and environmental baseline studies. Participated in major gas pipeline studies and siting studies for power plants. Prepared studies of seismicity, hydrology, and structural and urban hazards. Co-founded Dames and Moore's Santa Barbara office. I I I I I I I I I I I I I I I I I I I Michael F. Donnelly Page 3 Senior Research Scientist (1966 to 1972) U.S. Geological Survey Participated in NASA's Apollo program, as geologist for the U.S. Geological Survey branches of Astrogeology and Surface Planetary Exploration. Conducted research on volcanology and phase petrology. Mapped 1,500 square miles of volcanic terrain in Mexico. Instructed Apollo astronauts for lunar exploration. Project Geologist (1964 to 1968) Atlantic-Richfield Company Explored and evaluated most of the western U.S. coal basins of Wyoming, Montana, Colorado, Utah, Arizona, and New Mexico during a five-year period. The work included evaluation of leases, bid strategy, exploration and development drilling, mine feasibility studies, and comparative economics of delivered fuel costs involving railroad, truck, and slurry pipeline transportation alternatives. The work resulted in the acquisition and development of four major coal mines in Wyoming, Montana, and Colorado. Participated in the contract negotiations for coal transportation, water rights, and the development of mine-mouth power generation facilities. EDUCATION Ph.D. Geology, Stanford University B.Sc. Geology with Mathematics minor, California State University, Los Angeles Registered Geologist in California and Oregon PROFESSIONAL AFFILIATIONS American Association of Petroleum Geologists Geological Society of America Geothermal Resources Council Society of Mining Engineers of American Institute of Mining Engineering PRESENTATIONS "Cogeneration, Co-Firing, and Conversion Options." Tenth Annual Conference "Coal Market Strategies, Coal and Utility Dynamics: Market Drivers Through the 90's," Edison Electric Institute and the Western Coal Council, October 1992. "Canadian Gas-Supply, Pricing, and Regulatory Impact on the California Market." Natural Gas Forum sponsored by Resource Management International, Inc., September 1992. I I I I I I I I I I I I I I I I I I I Michael F. Donnelly Page 4 "Pacific Northwest Cogeneration-An Evolving Market for Rocky Mountain Gas." Fourth Annual Colorado and Rocky Mountain Natural Gas Strategy and Marketing Conference Colorado Oil and Gas Association, June 1992. "Natural Gas Prices: New Standard in Pacific Northwest Power Competition." American Society of Mechanical Engineers' Cogen Turbo Power Conference, October 1994, co-author. PD9\ IO~I.M.ftlO!6-27-96 Rev. ~1~95 I I I I I I I I I I I I I I I I I I I ANN T. DONNELLY, Ph.D. Project Director EXPERIENCE Project Director (1993 to present) Barakat & Chamberlin, Inc. Drawing on extensive experience in multifuel resource management, assists the firm's clients in planning marketing, purchasing, and transportation of natural gas and other energy fuels. Provides expertise in the areas of environmental and regulatory assessment as well as project development and management for the firm's electric and gas utility, independent power producer, cogeneration, pipeline, and oil and gas company clients. Principal Executive Consultant (1992) Resource Management International, Inc. Project manager of consulting projects assisting utilities, nonutility power producers, and other gas industry entities in planning for and implementing fuel management programs. Projects included minimizing fuel costs, maximizing environmental compliance, and assuring reliability of supplies and markets and were conducted for approximately 35 cogeneration projects throughout the United States President and Chief Executive Officer (1990 to 1992) Resource Solutions International, Ltd. Co-founder of this Washington corporation to provide energy development and environmental assessment/remediation services. Developed small power projects in Washington, Oregon, and Idaho. Provided fuel procurement to cogeneration projects in various parts of the United States. Developed natural gas reserves and deliverability for end-user markets. Consulted in long-term natural gas contracting (both supply and transportation) in the United States and Canada. Director of Gas Marketing and Director of Research Analysis (1987 to 1989) NERCO Oil & Gas (Subsidiary of PacifiCorp) Organized a new gas contracts and gas marketing department of up to 100,000 Mcf/d of natural gas. Negotiated long- and short-term gas sales and transportation contracts. Handled gas volume control and nominations to pipelines. Planned computerization of marketing functions and gas contracts. Monitored energy-related legislative issues and handled gas-related regulatory compliance. Vice President (1981 to 1986) Denver-Alaska Oil Company Developed and managed drilling and production programs for oil and natural gas. Supervised business administration of operations office. Secured funding for exploration/development programs. Reported to shareholders, investors, joint venture partners, and government permitting agencies. I I I I I I I I I I I I I I I I I I I Ann T. Donnelly Page 2 Starr Manager (1976 to 1986) Resource Associates or Alaska, Inc. Directed minerals exploration and development programs throughout the United States (including Alaska). Established two offices for western U.S. exploration and obtained multi-year multimillion dollar contracts. Assisted in the planning, management, and performance of a helicopter-supported exploration program in Alaska. Supervised professional and clerical employees. Independent Consultant (1974 to 1976) Consulted in the fields of micropaleontology and environmental geology. Wrote numerous articles for scientific publication. Micropaleontologist (1967 to 1974) Mobil Oil Corporation Provided age-dating and structural correlation to oil and gas exploration programs in the western United States. Conducted field studies in California, Oregon, and Washington. Performed independent research and analysis for Mobil Oil Corp. exploration programs as part of master's thesis and doctoral dissertation. Geographic Researcher (1966) National Geographic Society Technical writing and editing of National Geographic Atlas. EDUCATION Ph.D. M.A. B.S. Geology, University of California, Santa Barbara Paleontology, University of California, Berkeley Geology, Stanford University (with honors) ARTICLES AND PRESENTATIONS "Natural Gas Procurement in 1995: How to Stay Competitive in the New Northwest Power Market," Northwest Public Power Association, May 22, 1995, Coeur d' Alene, Idaho. "Natural Gas Prices: New Standard in Pacific Northwest Power Competition," American Society of Mechanical Engineering, Cogen Turbo Power Conference, October 25-27, 1994. "Can Gas IRP Succeed?" Natural Gas Focus, February-March, 1994, pp. 17-24. "Canada to California-An End-User Case Study." Presentation to Executive Enterprises-sponsored conference, San Francisco, CA, December 1992. I I I I I I I I I I I I I I I I I I I Ann T. Donnelly Page 3 "Endangered Species, Drought, Nuclear Phase-Out Spur Changes in Northwest." World Cogeneration. November-December 1992. "New Pipeline Regulations Send U.S. Gas Industry, Cogenerators, Scrambling for New Opportunities." World Cogeneration. Spring, 1992. Contributing Editor, World Cogeneration TEACmNG EXPERIENCE Teacher and co-author, "Natural Gas Fundamentals" course taught to top management of energy firms and policy makers University of California, Santa Barbara, Department of Geological Sciences (Sedimentary Petrology) University of California, Berkeley, Department of Paleontology (Historical Geology, Invertebrate Paleontology) PROFESSIONAL AFFILIATIONS American Association of Petroleum Geologists Geological Society of America PD9II0JD0m0I-A._/6-21.96 Rev. 9-19-95 I I I I I I I I I I I I I I I I I I I MICHAEL PRE'ITO Project Director EXPERIENCE Project Director (1987 to present) Barakat & Chamberlin, Inc. Maintains a detailed understanding of utility economics and regulation. Offers nearly three decades of experience in the electric and natural gas, solid waste, cable television, and water industries. Expertise includes cost-of-service, revenue requirements, cost allocation, rate design, valuation, and fuel supply economics. Recent projects include: · Assisting an electric power cooperative to mitigate stranded investment exposure through transition planning and restructuring of pricing arrangements among its members. . Analyzing gas industry restructuring issues for numerous clients . Reviewing electric and gas marginal and embedded cost-of-service studies and rate designs; presenting expert testimony on cost and rate design issues for various clients in the United States and Canada. . Analyzing purchase agreements for natural gas supplies and transportation, and electric power; providing advice on contract terms and technical support during contract negotiations . . Analyzing gas gathering costs, purchase gas costs, and gas cost allocation issues for industrial energy consumers. . Forecasting natural gas avoided costs, UEG costs, and gas and electric rates for numerous natural gas marketers, independent power producers, and large energy consumers. · Participating in valuation studies of utility natural gas facilities, utility streetlighting systems, and utility distribution systems for various purposes, including condemnation proceedings. · Developing ratemaking methodologies for a major landfill company and a California solid-waste collection company. · Providing technical advice on cost-of-service methodologies and the implications for rates for an association representing cable television companies during FCC hearings. I I I I I I I I I I I I I I I I I I I Director or Planning and Forecasting (1986 to 1987) Pacific Gas and Electric Company Fuels Policy Department Responsible for gas and oil price forecasts, power plant fuel and inventory economics, gas supply planning studies, presentation of fuels-related matters in CPUC rate cases, development and maintenance of related computer models. During 1987, also served as Director of OIl/aIR Implementation Project, responsible for gas supply and price area, including expert witness testimony on ratemaking treatment of purchased gas costs. Director or Revenue and Energy Analysis (1980 to 1986) Pacific Gas and Electric Company, Revenue Requirements Department Responsible for gas and electric fuel cost filings, ratemaking treatment of fuel costs, analysis and design of cost recovery mechanisms, expert witness testimony on fuel costs and fuel purchase policies, forecasts of fuel costs and revenues. Supervised staff of 12 professionals. Rate Engineer (1967 to 1980) Pacific Gas and Electric Company Rate Department Participated in gas, electric, and water rate design, revenue forecasting, rate cases, development of gas and electric fuel clauses, including expert witness testimony. EDUCATION Master of Public Administration, California State University at Hayward B.S., Business Administration, University of California, Berkeley PROFESSIONAL AFFILIA nONS San Leandro Planning Commission, 1979 to 1995. PD91101Prd1O.reoI6-27-96 Rev. 5016-96 I I I I I I I I I I I I I I I I I I I ROBERT D. OBEITER, Ph.D. Principal EXPERIENCE Principal (1995 to present) Barakat & Chamberlin, Inc. Dr. Robert Obeiter focuses on utility diversification, retail business planning, marketing strategy, new product development, and strategic pricing. He works with Barakat & Chamberlin's utility and ESCO clients to define business strategies, to determine how these strategies can be supported, and to implement new product offerings. Dr. Obeiter has nearly 20 years of experience in the energy field. Vice President, Director of Mid-Atlantic Regional Office (1990 to 1995) Xenergy, Inc. Responsible for the operation of an 80-person office that served over 20 utility clients. Specialized in strategic planning, market assessment, program design, and program implementation. Project work included: Marketing and Implementation . Developed business plans for nonregulated subsidiaries for three major utilities. . Conducted market potential studies for Orange and Rockland Utilities, Niagara Mohawk Power Corporation, Pennsylvania Power and Light, Consolidated Edison of New York Power Authority, Omaha Public Power District, Southern Minnesota Municipal Authority, and Public Service Electric and Gas. · Worked with four major utilities on diversification options. . Conducted market research, market segmentation, and customer needs assessment studies for six utilities. . Prepared marketing plans for commercial, industrial, and residential programs for eight utilities. · Prepared evaluation plans or conducted evaluation studies for New England Electric, Potomac Electric Power Company, Ontario Hydro, Pennsylvania Power and Light, Philadelphia Electric Company, Niagara Mohawk, Boston Edison, New York State Electric Gas, Consumers Power, and Orange and Rockland Electric. · Served as principal in charge of the implementation contract for the New York Power Authority's High Efficiency Lighting Program. Managed retrofit construction activities in excess of $20 million per year. I I I I I I I I I I I I I I I I I I I Robert D. Obeiter, Ph.D. Page 2 · Served as the principal instructor for the "On Target" workshops of the Association of Demand-Side Management Professionals (over 1,200 individuals have attended these workshops). · Managed pilot programs for Potomac Electric Power Company. Utility Information Systems · Consulted on marketing support system development for four utilities. · Conducted MIS scoping studies for these utilities. · Developed modernization plans for customer information systems. · Conducted a database review for Potomac Electric Power Company, Boston Edison, and Consumers Power. · Implemented a DSM implementation support system for several utilities. · Implemented mainframe system upgrades and major centralized and decentralized applications (e.g., automated service restoration, work order information procedures, employee information system, marketing and sales tracking systems, etc.). · Introduced fourth generation language and relational database technologies. · Introduced corporate-wide information and education center facilities. Rates, Regulation, and Other Areas · Developed end-use pricing specifications for several clients. · Participated in collaborative planning efforts with utilities, regulators, and other nonutility parties. · Served as utility lead for Rhode Island Strategic Development Commission. Charged with developing initiatives to improve state's economy. · Participated on merger/acquisition team. Conducted due diligence and led effort to identify operational efficiencies resulting from mergers or acquisitions. · Directed a customer task force designed to identify and develop initiatives and programs to enhance customer satisfaction. · Led regulatory relations team whose purpose was to establish a working relationship with staff of regulatory commissions and intervenor groups. I I I I I I I I I I I I I I I I I I I Robert D. Obeiter, Ph.D. Page 3 Director, Commercial and Industrial Services and Conservation and Load Management Programs (1988 to 1990) New England Electric System Responsible for operations of large commercial and industrial accounts, including the design, development, and implementation of conservation and load management programs; program marketing activities; customer, alternative energy, and standby generation; and the education of company executives and outside constituencies regarding the value of demand-side programs. Directed professional staff of 175, with an annual budget of $55 million. Director of Information Systems (1986 to 1987) Responsible for management of a 180-person data processing and information department, centralized and decentralized software development and data processing, and the development of cost-effective computer-based solutions to business problems. Manager of Rates (1982 to 1985) Responsible for preparing both wholesale and retail companies' cost of service and rate designs. Testified on rate issues in four jurisdictions. Directed strategic marketing efforts. Senior Analyst (1985 to 1986) National Economic Research Associates, Inc. Managed regulated utility and natural resource projects, including analyzing marginal cost pricing for several utilities, estimating natural resource damages, and evaluating incentive rate-making alternatives. Staff Economic Analyst (1980 to 1982) New England Conference of Public Utilities' Commissioners, Inc. Member of analytical support staff of regional association of regulatory agencies. EDUCATION Ph.D., Resource Economics, Clark University, 1985 M.A., Environmental Affairs, Clark University, 1979 B.A., Geography, Clark University, 1976 REPORTS, PUBliCATIONS, AND PRESENTATIONS DSM's Best Kept Secret: The Process, Outcome and Future of the Pepco-Maryland Collaborative, September 1994. I I I I I I I I I I I I I I I I I I I Robert D. Obeiter, Ph.D. Page 4 Guest speaker on DSM and IRP, Institute of Technology, February 1994. Value vs. mc: How to Determine Cost-Effectiveness, abstract submitted. Planning for DSM Program Implementation, EPRI Lighting Symposium, December 1993. Guest speaker on IRP and DSM, Stone and Webster Management Conference, August 1993. The Use of Evaluation in Conservation Cost Recovery, presented at 1991 International Energy Program Evaluation Conference, August 1991. What Happened to the Plain Vanilla Kilowatthour?, presented at the Fifth National Demand-Side Management Conference, July 1991. Guest speaker University of Michigan, Public Utility Executive Program, July 1990. Demand-Side Management Impact on Rates and Return, 1990 APPA/TUPPA Workshop. Alternate Energy, One Resource in New England's Energy Future, Fourth Annual Cogeneration and Independent Power Market Conference, presented April 1989. The FERC's Recent Interest in Wheeling and Carriage, NARUC Electric Research and Development Seminar, presented October 1995. Demand-Side Planning: A Case In Point, EPRI Demand-Side Planning Conference, presented September 1984. "Patient Profile of an Otolaryngologic Emergency Department," The Journal of the American Medical Association, August 19, 1983 (with M. S. Granick, MD). "In Search of Efficiency in Urban Services: Water Supply Allocations," Economic Geography, January 1981 (with S. Feldman and J. Breese). The Effect of Climate Fluctuations on Human Population, A Progress Repon, No.2, Clark University, August 1979 (with R. Warrick). "Methods of Reducing Peak Water Demands, Monadnock," Journal of Graduate School of Geography, Clark University, June 1979. Methods of Reducing Peak Water Demands-Repons I, II and III. NSF/RANN 376-19696. Clark University, September 1976, April 1977, January 1978 (with S. Feldman). PD9110IObeilCt.rcel6-27-96 Rev. 1G-:D-9S I I I I I I I I I I I I I I I I I I I KEN SEIDEN, Ph.D. Project Director EXPERIENCE Project Director (1994 to present) Senior Associate (1989 to 1994) Barakat & Chamberlin, Inc. Specializes in competitive market assessment and strategic planning for clients in the electric, gas, telecommunications, and water utility industries. Current assignments include analyses of energy company market shares and sales, and the development of Barakat & Chamberlin's ATLAS system-a flexible market segmentation, competitive assessment, and sales and market share forecasting tool. Other assignments include building optimal pricing/strategic marketing models; developing sales forecasts; assessing the effectiveness and impacts of utility service activities; and developing forecasting, market planning, and uncertainty analysis methodologies. Economist (1987 to 1989) Pacific Bell Conducted empirical and theoretical analyses to determine the viability of new product concepts and competitive impacts on the company. Coordinated joint research projects with Bell Communications Research; selected appropriate economic modeling techniques; designed market research questionnaires, performed econometric analyses; prepared reports; presented results to management and the California Public Utilities Commission. Visiting Assistant Professor (August 1986 to July 1987) Department of Economics University of the Pacific Delivered lectures, wrote exams, and advised students in Public Finance and Public Policy, Intermediate Microeconomic Theory, and Principles of Economics. Industry Economist (June 1984 to December 1985) Wholesale Power Rate Division Bonneville Power Administration Performed econometric analysis of wholesale electricity markets in the Pacific Northwest. Participated in revenue analysis, tariff design, and testimony preparation. Instructor (September 1981 to June 1986) Department of Economics University of Oregon, Eugene Taught undergraduate-level Public Finance, Labor Economics, Macroeconomics, and Microeconomics. I I I I I I I I I I I I I I I I I I I Ken Seiden Page 2 EDUCA nON Ph.D., Economics, University of Oregon M.S., Economics, University of Oregon B.A., Economics, University of Connecticut AWARDS AND RECOGNITIONS Department of Economics Award for Best Research Paper by a Ph.D. candidate, University of Oregon Nominated two years in a row for Graduate Teaching Fellows Award for distinguished teaching, University of Oregon Paul Nason Taylor Memorial Prize in Economics, University of Connecticut SELECTED PAPERS AND PUBLICATIONS "Strategic Rate Making in the Context of Dynamic Ramsey Pricing." Applied Economics, vol. 26, no. 4, pp. 363-374. With K. Jensen and R. Hartman. April 1994. "Efficient Block Rate Structures: Rethinking Conventional Wisdom." The Electricity Journal, pp. 54-59. With J. Chamberlin. December 1993/January 1994. "Econometric and End-Use Models: Is it Either/Or Or Both?" Proceedings of the Ninth Annual Forecasting Symposium. Sponsored by the Electric Research Power Institute. With A. Faruqui and C. Melendy. San Diego, CA, September 1993. "DSM Planning Under Uncertainty." Co-author of paper presented to American Economic AssociationlTransportation and Public Utilities Group annual meeting. With A. Faruqui. Anaheim, CA, January 1993. Practical Applications of Forecasting Under Uncenainty. Research Project 2912-2. With A. Faruqui and C. Sabo. Palo Alto: Electric Power Research Institute, October 1992. "The Potential for Energy Efficiency in Electric End-Use Technologies." Transactions of the IEEE Meeting. With G. Wikler, A. Faruqui, and C. Gellings. Seattle, W A, July 1992. "Approaches to Dealing with Uncertainty in Forecasting." Co-author of paper presented at EPRI's 8th Electric Utility Forecasting Symposium. With A. Faruqui and P. Cleary. Baltimore, MD, October 1991. "Potential Energy Savings from Efficient Electric Technologies." Energy Policy, pp. 217-230. With C. Gellings and A. Faruqui. April 1991. Customer Response to Rate Options. EPRI CU-7131. Electric Power Research Institute. With A. Faruqui et al. Palo Alto, January 1991. I I I I I I I I I I I I I I I I I I I Ken Seiden Page 3 Impact of Demand-Side Management on Future Customer Electricity Demand: An Update. EPRI CU-6953. With A. Faruqui et al. September 1990. Estimating Efficiency Savings Embedded in Electric Utility Forecasts. EPRI CU-6925. With A. Faruqui. August 1990. Uncertainty in Forecasting. EPRI CU-6855. With A. Faruqui et al. May 1990. Efficient Energy Use: Estimates of Maximum Energy Savings. EPRI CU-6746. With A. Faruqui et al. March 1990. Demand-Side Management Program Options for the Potomac Electric Power Company. January 1990. "The Behaviour of Publicly Owned Utilities in Wholesale Electricity Markets: The Case of the Pacific Northwest." Energy Economics 9, pp. 241-250. With L. L. Peters. 1987. "Municipal Residency Laws and Local Public Budgets." Public Choice 48, pp. 27-35. With S. L. Mehay. 1986. LECTURES "Cost-Effectiveness Analysis Under Uncertainty." Canadian Electrical Association Demand-Side Management Conference, with A. Faruqui et al., Toronto, Canada, October 1990. "Impact of Utility Demand-Side Management Programs on U.S. Electricity Demand: 1990-2010." ACEEE 1990 Summer Study, with A. Faruqui and S. D. Braithwait, Asilomar Conference Center, Monterey, CA, August 1990. "Second-Stage Effects of Demand-Side Management Programs." the Advanced Workshop in Regulation and Public Utility Economics, Third Annual Western Conference, with A. Faruqui, San Diego, CA, July 1990. "Forecasting the Impact of End-Use Efficiency Improvements on Electricity Use." International Association of Business Forecasting, with A. Faruqui and C. Gellings, Philadelphia, PA, September 1989. "Forecasting the Demand for New Products: A Synthesis of Diffusion of Innovations and Discrete Choice Approaches." Rutgers University Advanced Workshop in Public Utility Economics and Regulation, Second Annual Western Conference, Monterey, CA, July 1989. PD9II01Scidcn...../6-21-96 Rev. 4-10-96 I I I I I I I I I I I I I I I I I I I ANDREW C. WETZ Senior Associate EXPERIENCE Senior Associate (1993 to present) Barakat & Chamberlin, Inc. Assists the firm's clients in analyses of natural gas and other energy source projects and analyzing and monitoring long-term gas supply and transportation contracts. Project work includes strategic fuel portfolio planning, economic forecasting, litigation support, merger and acquisition analysis, and regulatory and tax research for the firm's electric and gas utility, independent power producer, cogeneration, industrial, pipeline, and oil and gas company clients. Recent work includes: . Provided economic data research and analysis for litigation support purposes in a case involving an oil and gas exploration and production company. Analysis supported ruling resulting in significant cost savings. . Performed economic analysis of alternate natural gas pipeline costs to assist a southeastern U.S. electric cooperative in selecting the optimal gas transportation route for its repowered power generating facility. . Provided economic analysis of an industrial's alternate power and natural gas sources for its Pacific Northwest facility. Also participated in gas pipeline and LDC contract negotiations for its Nevada plant. . Presented an overview of the Pacific Northwest electric power and natural gas industries for a British electric power firm looking at potential overseas investments. Principal Consultant (1992 to 1993) Resource Management International, Inc. Generated economic analyses of alternate U.S. gas supply and pipeline transportation costs, storage options and LDC bypass opportunities for power generators, including electric cooperatives and utility and non-utility cogeneration projects. Analyzed gas pipeline transportation costs of routing alternatives from Canada for Pacific Northwest, Midwest, and Northeast utility cogeneration sites. Vice President and Chief Financial Officer (1989 to 1992) Resource Solutions International, Ltd. Generated cash flow and financial book proformas, including evaluation of fuel plan pricing alternatives, for cogeneration/independent power producer projects throughout the U.S. and Canada. Maintained database information on energy pricing (oil, natural gas, coal) to assist in evaluation of fuel alternatives. Provided tax research and analysis and regulatory research at the state and national levels. I I I I I I I I I I I I I I I I I I I Andrew C. Wetz Page 2 Director of Planning and Analysis (1988 to 1989) NERCO Oil & Gas, Inc. (Subsidiary of PacifiCorp) Monitored and analyzed cost-and-revenue trends of NERCO's significant (1.5 TCF) natural gas supply contract with Louisiana Power & Light to assist in procuring an economically feasible fuel supply from pipeline companies/producers. This contract involved an innovative coal-for-gas BTU exchange of energy fuels for a 25-year term. Coordinated and performed studies of the international and domestic energy industries (resource base, demand forecast, pricing expectations) to assist in formulating company business strategy. As part of business planning, screened, analyzed, and ranked merger and acquisition candidates, including interstate pipelines and LDCs and evaluated their energy fuel reserves. Senior Economic Acquisition Analyst (1984 to 1988) Union Pacific Resources As part of company's acquisition effort, generated, reviewed, and made recommendations on target firms and producing oil and gas properties, both domestic and international (Canada, Indonesia, North Sea). Performed economic/financial book analyses and presented results to senior management. Coordinated project economic evaluation between U.S. headquarters and Canadian subsidiary, including overseeing Canadian regulatory and tax changes and subsequent effect on project evaluation and overall company strategy. Assignments included the post-completion analysis of company's major Canadian gas processing facility. Engineering/Exploration Economic Analyst (1981 to 1984) Standard Oil Company Made significant contribution to organizing the firm's economic evaluation process of Alaska oil production and development projects. Analyzed (including effects of state and federal taxes) and authored recommendations on North Slope oil projects, including increasing oil production and generating cost savings. Major assignments included the economic analysis of an on-site company facility to supply jet fuel and other petroleum products to meet local company fuel needs. Co-designed financial computer model to be utilized in oil/gas project evaluation and coordinated the design and implementation of a five-day economic evaluation seminar for engineers. Staff Economic Analyst (1978 to 1981) Amoco Corporation Performed economic evaluations of onshore and offshore oil and gas projects with subsequent presentations to senior management. Provided liaison between regional operating groups and the headquarters economics group on energy economic issues such as pricing implications of the Natural Gas Policy Act of 1978 and the Windfall Profits Tax Act of 1980. EDUCATION MBA Finance, University of Texas, Austin B.A. Mathematics and Business Administration, Trinity University I I I I I I I I I I I I I I I I I I I Andrew C. Wetz Page 3 PROFESSIONAL AFFILIATIONS International Association for Energy Economics National Association of Business Economists HONORS Beta Gamma Sigma, National Honorary Business Society PUBLICATION "BTU Tax: IPP Industry Mulls Impact on Fuel Costs." World Cogeneration. With Ann Donnelly. March/April 1993. PD9110IWctz.-.l6-27-96 Rev. 10-12-94 I I I I I I I I I I I I I I I I I I I GREGORY F. COLLINS Principal EXPERIENCE Principal (1993 to present) Barakat & Chamberlin, Inc. Directs projects involving strategic market planning; competitive analyses; market research activities to enhance program penetration and customer retention; and program design, implementation and administration. Specializes in new products and services development. Recent accomplishments include: · Strategic Resource Planning. For a utility in Texas, directed a comprehensive review and critique of client's resource planning process. · Strategic Planning. For an electric utility, performed scenario analysis to help the client understand trends in energy and telecommunications markets and identify telecommunications diversification strategies. · Strategic Market Planning and Program Design. For a number of electric utilities, directed market analysis and strategic market planning as well as product design and implementation planning. · New Products and Services Development. Assisted numerous electric utilities in the northeast, southwest, and midwest to identify and develop profitable new energy programs, products, and services. New product lines include energy services pricing, financing and leasing programs, energy information services, services tied to efficient technologies/processes . · Competitive Assessment. For numerous electric utilities, designed competitive intelligence processes and trained utility staff in their use; in selected circumstances, analyzed competitor strengths, strategies, and services for clients. · Supply and Demand-Side Bidding. For several electric utilities, facilitated policy identification and bid strategy, development and implementation planning of RFPs, and design of bid-scoring and evaluation criteria. Designed bidding team negotiation strategies and assisted in negotiations. · Organizational Assessment. Recommended marketing strategies, tactics, organizational structures, and processes for merging electric utilities. I I I I I I I I I I I I I I I I I I I Gregory F. Collins Page 2 Executive Director, Marketing and Sales (1992 to 1993) Executive Director, Market Planning and Development (1990 to 1992) Director, Market Planning and Development (1989 to 1990) Director, Market Research and Competitive Analysis (1987 to 1989) PSI Energy Directed all market planning, research, and development functions for PSI Energy (formerly Public Service Indiana). Directed a staff of more than 130 people and managed an annual budget in excess of $40 million. Initiated one of the industry's earliest DSM bidding programs and was responsible for the design and implementation of one of the few sales incentive compensation systems in the utility industry. Testified extensively before regulatory bodies on the merits of the utility's marketing and conservation programs. Built lines of communication and forged effective collaborative efforts with traditional utility adversaries. As a result of the collaboration, an agreement was reached that removed regulatory disincentives for utility conservation programs and made DSM profitable. Conducted a review of advertising agencies to maximize the effectiveness of PSI's advertising budget. Implemented first Quality Function Deployment (QFD) process at an electric utility. Served as a member of the Energy Task Force on the President's Commission on Environmental Quality. Served as member of the Governor's Energy Policy Forum in Indiana. As Director of Market Research and Competitive Analysis, initiated concept of competitive intelligence to assist the utility in planning for future markets. Developed and implemented plan that resulted in a dramatic reversal of a five-year trend of market share erosion in the home heating market. Recommendations included market positioning, advertising strategies, and distribution channel selection. Consolidated the research activities of diverse departments (marketing, customer services, corporate communications, and strategic planning) that resulted in a common basis for planning and significant annual cost savings. Director of Marketing, Educational Toys Division Marketing Manager, New Business Ventures Marketing and Sales Manager, Handheld Computers Advertising Manager, Calculator Division Senior Product Manager, Scientific Calculators Product Manager, Digital Watch Division Market Analyst/Programmer, Personal Computer Division (1977 to 1987) Texas Instruments, Consumer Products Group During ten years with Texas Instruments, directed and managed product development, R&D activities, strategic marketing, new product evaluation, and recruitment and training of specialized sales force. While at Texas Instruments, accomplishments included: · Generated and evaluated over 200 innovative product concepts. Selected most promising ones and developed comprehensive business plans to market them. · Brought four new Educational Toys Division products to market that produced first-year revenues of $10 million. I I I I I I I I I I I I I I I I I I I Gregory F. Collins Page 3 · Through marketing activities, returned Digital Watch Division to profitability from $16 million loss in less than two years. · Repositioned Compact Computer line as a commercial/OEM product, resulting in a 220% increase in revenue and a $3 million improvement in profitability in one year. EDUCATION B.s. Biology, Tulane University PD91101Co1liDo.rcoI6-27-96 RDv. 3-29-96