- Market Research and Analysis
- Cost Allocation and Rate Design
- Energy Procurement
- Studies and Valuations
- Utility Financial Policy Development
- Business Planning and Development
Market Research and Analysis
Our team provides expert economic analysis, and analysis of business opportunities and market outcomes. We provide ongoing and comprehensive reviews of the utility industry in Canadian jurisdictions, including the electric ancillary services markets and pricing methodologies, the evaluation of economic, political, market, regulatory and operational considerations, and new generation technologies analysis including wind, biomass, fuel cell and others. Chymko applies its staff’s knowledge of energy markets to assist clients in managing their energy portfolios and evaluating opportunities.
Our ongoing analysis gives our team extensive experience in regulatory and government affairs that allows for Chymko to provide senior-level, expert advice, and direction to our clients on a host of regulatory matters. We represent clients’ interests in industry restructuring issues and other government affairs. In sum, Chymko provides clients with:
- Reviews of regulations, legislation, and policy at the Federal and Provincial levels.
- Reports on regulatory matters.
- Evaluations of energy and ancillary services markets and their impacts.
- New generation technologies analysis including wind, biomass, fuel cell and others.
Cost Allocation and Rate Design
Chymko Consulting regularly conducts cost allocation and rate design studies for electric and natural gas utilities. A cost allocation study allocates the utility’s rate revenue requirement according to each customer rate class’s share of the utility’s costs. The result is then compared to the revenues collected from each rate class. The resulting revenue-to-cost ratio assists the rate design process by answering the following questions:
- How do the usage patterns of a given rate class contribute to the utility’s incurred costs?
- Are the revenues recovered from a specific rate class enough to offset their associated costs?
- What is the degree of cross-subsidization across rate classes?
Chymko Consulting’s rate design studies consider these issues as well as other factors such as rate stability, simplicity, and ease of administration.
With more than a decade of experience of procuring energy in Alberta’s deregulated electric wholesale and retail markets, Chymko has developed a robust energy procurement process to secure retail services agreements, physical commodity supply, and financial hedges for our clients. Our process addresses client preferences for risk, planning horizon, day-to-day administration, and long-term portfolio strategy. For suppliers, our process is familiar, credible, and efficient, which promotes participation and competitive offers.
As an independent, unbiased energy consulting firm that is intimately familiar with energy market processes and procedures, our procurement services are not charged based on volume or commissions, so our only interest is to find the right solution for our clients.
Green Electricity and Emission Offset Planning
Chymko frequently assists clients with the procurement of green energy supply and emission offsets. We tailor our approach to address each client’s needs and exceed expectations. Our services include:
- Advice on supply options, emission offset credits, renewable energy credits (“RECs”), and portfolio development.
- Developing purchasing strategies.
- Analyzing the clients’ energy (load) profile and environmental offset requirements.
- Request for Proposal (RFP) development and evaluation.
- Interviewing RFP respondents and short-listing candidates.
- Wholesale and retail contract negotiations.
- Evaluation reporting and documentation.
Studies and Valuations
Chymko regularly assists clients with studies that address a wide range of economic or financial problems, including but not limited to:
- The valuation of utility assets.
- Assessing the economic viability of self-generation and/or cogeneration.
- Evaluating the financial feasibility of outsourcing.
- Developing hedging strategies to minimize value at risk.
Chymko’s studies are always customized to address the very specific circumstances and needs of each client. We believe that such studies are only valuable if they are understood by the target audience, regardless of technical complexities or subject matter. For this reason, we are frequently trusted to provide content-rich, readable, and targeted studies for senior executives, utility regulators, and municipal governing bodies.
Utility Financial Policy Development
Chymko develops financial planning models for electric, gas, water, wastewater, waste management, and recycling utilities. A utility’s ability to provide safe and reliable service depends on its ability to finance current capital infrastructure, which is made possible year-after-year with long term financial planning. To plan, it is necessary to model the complex relationship between utility ratemaking and utility financial policies. This requires more than just an analysis of current rates or the current operating budget.
The ability to finance today’s capital infrastructure is affected by financial decisions made in prior years, particularly financial decisions regarding how much of year-end net income is retained in reserves and how much is paid to shareholders as a dividend. If the dividend is too low, cash reserves eventually accumulate at the expense of the shareholders, and shareholders question why it is worthwhile to continue investing in the utility. If the dividend is too high, cash reserves will eventually be depleted and future infrastructure will need to be financed through new debt, provincial grants, developer contributions, or new shareholder equity. Particularly challenging for municipally owned utilities, new shareholder equity means higher taxes.
An effective, efficient, and realistic utility financial planning model must therefore quantify the expected future impact of today’s financing decisions in terms of the ability to finance future capital infrastructure.
Business Planning and Development
Our staff guide and assist customers in strategically positioning themselves to succeed in the competitive energy industry. Chymko has assessed corporate strategies, assisted in corporate restructuring, helped establish new utility business entities, and provided analysis in the acquisition or divestiture of utility assets.
Chymko’s experience includes:
- Financial management and reporting.
- Providing analysis and recommendations for utility-based pricing to access infrastructure
- Corporate, financial, and business unit restructuring.
- Developing corporate strategies that pertain to core business, strategic alliances, and outsourcing.
- Completing retail base valuation.
- Evaluating energy and ancillary services markets and their impacts.