FG Solutions' staff are experts in financial planning for utilities. Financial planning assignments are completed in conjunction with rate studies, master plans, and utility formations/acquisitions.
Utility Formation and Acquisition
Financial plans are critical when an agency is considering forming or acquiring a utility. These financial analyses differ from analyses embedded in a Rate Study in several ways:
- Important data is either unknown or unknowable: In a formation, there is no past experience or cost data in the proposed service area to draw from. In an acquisition that is not cooperative, the existing utility being acquired may not release data so it must be estimated from publicly available information that may be incomplete.
- Formations and acquisitions are often challenged: In a contested environment, financial analyses must be documented sufficiently to withstand scrutiny.
- Public participation is vital: Utility formations and acquisitions are big changes for residents in a community. Public engagement is a critical step for a successful end result.
FG Solutions prepares analyses to meet these conditions. We leverage our expertise to estimate data (often in ranges) where it is not known. Our analyses are explainable and well documented and we are experts in public presentation of financial analyses for utilities.
Master Plan Support
A key element of a Master Plan is the analysis and development of a Capital Improvement Plan (CIP). Typically containing a more detailed five-year analysis and a more generalized 20-year analysis, the CIP provides a roadmap for the utility to accommodate system growth, changing regulatory standards, and service level standards. FG Solutions provides concurrent financial analysis to identify the financial impacts of the CIP so that decision-makers can adopt a CIP knowing that is affordable and can be implemented. Our analyses support the viability of the Master Plan document.
Capital Improvement Plan Funding
Utilities update Capital Improvement Plans on a period basis and when preparing budgets. These updates are in between Master Plan cycles. The financial analysis that supports a CIP update continues to be necessary to assess the financial impacts. Included in our analyses are policy discussions with clients regarding issuance of debt and capital reserves. Our financial analysis can chart a path for utilities to achieve financial performance metrics to support debt issuance.
“The toughest decisions made by utilities are related to finances. However, these decisions are never purely financial in nature. ”