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Themes from 2007 AGA Financial Forum
ScottMadden was a key sponsor of the recent 2007 AGA Financial Forum in Orlando, Florida from April 29 to May 1. This conference allowed energy industry executives and members of the financial community to exchange their views on industry-wide trends as well as the outlook for individual companies. Themes from the conference were
- Innovative regulation can mitigate impacts of variable weather and declining usage per customer. Last year’s theme of “befriend your regulator” resulted in many rate filings over the last year incorporating strategies such as decoupling, weather normalization, and tracking
- Companies are taking varied approaches to achieving portfolio diversification:
- Geographic/regulatory diversity
- Exploration and production
- Mid-stream services
- Pipelines and storage assets
- Non-utility businesses
- Some companies are reducing dividend payout ratios to be more aligned with their peers. This strategy enables reinvestment in utility plant and sets aside funds for growth opportunities
- Addressing gas price volatility is a key strategy component, but LDCs are employing different strategies to mitigate. Some companies leverage their production assets for utility consumption, while others have invested in storage and LNG plants to handle peak loads and demand swings. And some LDCs are building new transmission lines that provide additional access to interstate pipelines
- Major initiatives to increase efficiency and drive out costs, such as process re-engineering, consolidation of operations, and technology leveraging, are common
- Non-traditional investors in the U.S. energy industry are emerging
- Several utilities plan to increase their rate base by making significant investments in transmission and distribution systems
ScottMadden’s LDC consulting experience ranges from planning to performance monitoring, and from construction to operations. Please contact us for more information.