Utility Appraisals & Valuations
In many cases, a merger, acquisition or divestiture is governed by regulatory oversight. The regulatory requirements must first be determined on all jurisdictional levels followed by the necessary efforts to comply with the applicable requirements. EES Consulting has dealt with regulation on all levels from city councils to federal energy agencies.
In the cases of a mergers and acquisitions, much of the time and work involved goes into the due diligence process. Engineering due diligence is an examination of the assets of the proposed partners to determine that everything on the books exists and is in good working order. EES Consulting has engineers who go out into the field to physically examine assets in order to make these determinations. EES Consulting also performs financial due diligence analyses in the area of mergers and acquisitions. We have reviewed the buying and/or selling utility’s rate structures, terms and conditions, financial proformas associated with the sale, and associated asset sheet and income statement items, and opined on their appropriateness.
Santa Clara Valley Water District
EES Consulting performed a Water Utility Municipalization Feasibility Study (Project) for the Santa Clara Valley Water District (SCVWD) to review recent developments in the restructuring of the water utility industry and provide an assessment of the future implications for the industry in California. Issues included the following:
- Identify potential acquiring companies and potential California target utilities.
- Identify the driving forces and obstacles to the acquisition of investor owned water utilities in California.
- Describe steps in the acquisition process and the roles of the regulatory agencies.
- Describe alternative approaches to valuing water utility assets and how they are viewed by regulators.
- Provide alternative strategies to dealing with acquisitions that could affect the District’s future business environment.
Truckee Meadows Water Authority
Truckee Meadows Water Authority (TMWA) is a joint powers authority formed to acquire the water utility previously owned and operated by the Sierra Pacific Power Company (Sierra). With the assistance of EES Consulting, TMWA purchased water rights, storage, treatment, distribution and hydroelectric facilities from Sierra to serve approximately 75,000 customers in the Reno-Sparks metropolitan area. EES Consulting’s involvement in this utility acquisition began prior to the formation of TMWA and continued through the transition of ownership. EES Consulting staff served as the lead consultant and overall project manager for the acquisition. Following the closing of the transaction, EES Consulting has continued to provide support to TMWA through its formative and successful transition to a fully independent utility. To date, TMWA continues to operate successfully and its financial results are consistent with projections provided by EES Consulting to both its client and investors that purchased TMWA’s bonds.
