HomeMy WebLinkAboutRESPONSE - RFP - 8289 ELECTRIC CAPACITY FEES & COST OF SERVICE PROVIDERELECTRIC CAPACITY FEE AND
COST OF SERVICE REVIEW
Proposal No. 8289
City of Fort Collins
Fort Collins, Colorado
PROPOSAL | May 9, 2016
www.newgenstrategies.net
PREPARED BY:
ECONOMICS STRATEGY STAKEHOLDERS SUSTAINABILITY
Economics | Strategy | Stakeholders | Sustainability
www.newgenstrategies.net
225 Union Boulevard
Suite 305
Lakewood, CO 80228
Phone: (720) 633-9514
May 9, 2016
via email: purchasing@fcgov.com
City of Fort Collins
Financial Services
Purchasing Division
215 North Mason Street, 2nd Floor
Fort Collins, CO 80524
Subject: City of Fort Collins
Proposal No. 8289: Electric Capacity Fee and Cost of Service Review
To City of Fort Collins Purchasing Division:
NewGen Strategies and Solutions, LLC (NewGen) is pleased to submit this proposal for an Electric Capacity
Fee and Cost of Service Review for the City of Fort Collins (City) in response to the request for proposal
(RFP) 8289. Denver‐based NewGen has a long and proud history of working with the City and Fort Collins
Utilities (Utilities) in assisting with strategic planning, cost of service / rate design and sustainability
planning. These efforts were conducted as employees of R. W. Beck, as well as SAIC (now Leidos), and
provide our project team a unique insight and understanding of the Utilities that will benefit the City for
this assignment.
NewGen consists of experienced electric utility cost of service (COS) and rate analysts, and industry
experts, with over 90 years of combined experience. The professionals working on this project have
earned the trust of municipal utilities of all sizes and in locations around the country. We share an acute
appreciation of the relationship between governing bodies, utilities, and their customers—especially the
understanding of how these relationships can become tenuous in the face of economic, environmental,
and political challenges. Our project team is highly skilled in the technical aspects and policy
considerations of COS and rate analysis. We have extensive experience working with Visual Basic for
Applications (VBA) and Excel‐based modeling while developing and reviewing COS models for our clients.
We are confident that we can provide the City with the expertise in migrating the existing PIF model from
a VBA based platform to a user‐friendly Excel‐based model.
If you have any questions regarding our submittal, please feel free to contact me at (720) 259‐1762 or at
sburnham@newgenstrategies.net. We appreciate the opportunity to continue our successful business
relationship with the City and Utilities on this exciting opportunity.
Sincerely,
NewGen Strategies and Solutions, LLC
Scott Burnham
Executive Consultant
CITY OF FORT COLLINS
PROPOSAL NO. 8289: ELECTRIC CAPACITY FEE AND COST OF SERVICE REVIEW
Economics | Strategy | Stakeholders | Sustainability
www.newgenstrategies.net
Table of Contents
A. EXECUTIVE SUMMARY ............................................................................................................. 1
Exceptions to Agreement .......................................................................................................................... 1
B. SCOPE OF PROPOSAL ............................................................................................................... 1
Task 1 – Review PIF Model .................................................................................................................... 2
Task 2 – Develop New PIF Model .......................................................................................................... 2
Task 3 – Review COS Model .................................................................................................................. 2
Task 4 – Present to City Council ............................................................................................................ 3
C. ASSIGNED PERSONNEL ............................................................................................................ 3
Primary Contact ........................................................................................................................................ 3
Project Personnel ...................................................................................................................................... 4
Sub‐consultant .......................................................................................................................................... 4
D. AVAILABILITY............................................................................................................................ 5
Proposed Schedule ................................................................................................................................... 5
E. SUSTAINABILITY/TBL METHODOLOGY .................................................................................... 5
F. COST AND WORK HOURS ........................................................................................................ 6
G. FIRM CAPABILITY ..................................................................................................................... 7
Company History ....................................................................................................................................... 7
Company Description ................................................................................................................................ 7
Proposed Project Team and Organizational Chart.................................................................................... 7
Firm Qualifications .................................................................................................................................... 8
Project Profiles .......................................................................................................................................... 8
APPENDIX A – PROPOSAL ACKNOWLEDGEMENT
APPENDIX B – RESUMES
CITY OF FORT COLLINS
PROPOSAL NO. 8289: ELECTRIC CAPACITY FEE AND COST OF SERVICE REVIEW
Economics | Strategy | Stakeholders | Sustainability
www.newgenstrategies.net
A. EXECUTIVE SUMMARY
As conservation, energy efficiency, distributed generation, and other economic issues have resulted in
reduced load for many utilities, fixed cost recovery, either through rates or fees/charges, is increasingly
becoming a significant concern for utilities across the nation. The review of the Utilities existing Plant
Investment Fee (PIF) model to ensure that load growth is paying for its incremental costs and its allocated
share of existing infrastructure, is consistent with efforts of utilities in general to enhance recovery of their
substantial fixed costs. The review of the existing PIF and cost of service (COS) models for comparison to
industry best practices is warranted as well, to assure that Utilities is collecting, allocating and addressing
cost recovery in a fair and equitable manner.
The development of a new PIF model that is easier to update, without onerous and non‐transparent VBA
coding, is a critical step in this process. Changes in system design and layout have occurred due to the
evolving nature of development within the City, including mixed use, high density and increased energy
efficiency efforts by electric customers. The results of the model development and review will need to be
conveyed to the City Council in a clear and concise manner to ensure that those who are responsible for
implementing City public policy understand the recommended changes to cost recovery.
NewGen is well qualified to provide the model development and review for the City and Utilities. We are
focused on addressing the financial and economic challenges of municipal utilities and will bring our
collective 90 years of experience to the City for the benefit of this project. We consistently provide
financial models for utility costs, with and without VBA coding, as well as conduct reviews of utility models,
on behalf of industry clients.
Our approach for the Utilities is to provide a comparison of its PIF and COS models to those we have
developed and reviewed, utilizing the collective experience of all of our professional staff. To facilitate
communication with the Utilities team, the development of the revised Excel based PIF model will be
conducted by the analytical staff in our Denver office, where our Project Manager is also located. The
project deliverables will include draft and final reports on the model reviews, which will incorporate
feedback and comments from the Utilities team as appropriate. Additionally, a revised user‐friendly PIF
model will be provided that will be easy to update, straightforward in its design, and have the ability to
produce reports on the fixed investment and their cost recovery. The final deliverable will include a
presentation to the City Council on the summary findings and results of the review of the models, as well
as the impact of the new model on development costs for the Utilities.
The NewGen project team is available to participate as necessary in the interviews/demonstrations on
the proposed dates as stated in the Schedule section of the RFP, May 26‐27, 2016.
Exceptions to Agreement
NewGen is willing to utilize the City of Fort Collins’ standard Professional Services Agreement as included
as Exhibit B of the RFP. We do not propose any alternative forms of contract nor do we have any
exceptions.
B. SCOPE OF PROPOSAL
The following Scope of Work has been prepared to assist Utilities with the review, development and
analysis of its PIF model, as well as a review of its existing Cost of Service model and development of a
report and presentation to City Council. The project will be managed by Scott Burnham, who has over 18
years of experience in the industry. Mr. Burnham will be responsible for the timely and professional
CITY OF FORT COLLINS
PROPOSAL NO. 8289: ELECTRIC CAPACITY FEE AND COST OF SERVICE REVIEW
2 Thoughtful Decision Making for Uncertain Times
completion of the final deliverables, including the presentation to City Council, as well as the project
budget. It is anticipated that Mr. Burnham and his team will work directly with the Utilities project team;
which would be expected to provide data and deliverable review in a timely manner to support the agreed
upon project schedule.
NewGen brings a unique approach to measuring and verifying the value that it delivers. This approach
includes defining the project success during the initial project meeting. Elements of success will be tracked
during the process of project implementation and communicated to the Utilities project team via Project
Summary communications (in the form of memoranda and/or e‐mail correspondence). Further, NewGen
will establish bi‐weekly (or more frequent) conference calls with the Utilities project team to discuss
project status, budget remaining and outstanding issues, as appropriate.
The Scope of Work is anticipated to be completed in a series of project tasks, as described below:
Task 1 – Review PIF Model. NewGen will review Utilities current PIF model and provide a comparison
of the model with industry best practices. This will be done utilizing the breadth and experience of the
entire NewGen company to combine and synthesize the various approaches that are utilized to recover
fixed investment costs from developers and customers, including fees, charges and dues intended for that
purpose. The synthesis of this data will provide a summary that will form the basis for comparing the
Utilities’ current model to the best practices. This information will be presented to the Utilities’ project
team in the form of a draft report for review and comment, followed by a final report. Task 1 will include
an on‐site “kick‐off” project meeting to discuss project deliverables, objectives and responsibilities of the
NewGen and Utilities project teams. NewGen anticipates an additional on‐site meeting with the Utilities
project team to convey the results of the Task 1 analysis.
Task 2 – Develop New PIF Model. As indicated in the RFP, the current model utilizes a VBA interface
that is cumbersome to update. Task 2 will consist of the development of an updated Excel‐based PIF
model that is designed to allow the Utilities to maintain and update the cost / investment information as
needed. This process will include a “deconstruction” of the existing PIF model to identify new data
requirements to be included in the Excel‐based model. This model will be the mechanism to identify the
incremental, or marginal, costs associated with new capital requirements necessary to facilitate new load
growth. Additionally, the new model will identify the costs associated with the existing infrastructure that
supports the extension of service.
The new model will have a defined interface that will be clear and concise in its layout and appearance.
The logic flow of the model will also be readily identifiable for Excel users with moderate experience.
There will be a series of “data input” worksheets that will be formatted to the source data to match the
output from Utilities other data sources (e.g., the work product from the Utilities’ Engineering group).
This model design will minimize the need for data transformation between the source and use of the data.
Minimizing the need for data transformation reduces the potential for error to be introduced into the PIF
model, avoiding undesirable results. The revised PIF model will also include standard output forms that
can be easily analyzed by Utilities’ staff and management, as well as be input into its Cost of Service / Rate
Design model. The new PIF model will not rely on VBA coding and will be designed in a “user‐friendly”
format.
For Task 2, NewGen envisions two on‐site meetings and a series of potential web‐based conference/video
calls to discuss the new model layout, structure and functionality.
Task 3 – Review COS Model. NewGen will review the Utilities’ existing COS model to compare to
industry best practices. This will include a review of the structure of the COS model and its functionality.
CITY OF FORT COLLINS
PROPOSAL NO. 8289: ELECTRIC CAPACITY FEE AND COST OF SERVICE REVIEW
Thoughtful Decision Making for Uncertain Times 3
NewGen will identify the mechanisms for development of the Test Year Revenue Requirement, the
functionalization / classification process and the application of the customer class allocation methodology
in the model and will compare these elements to COS models it has developed and/or reviewed for
municipal clients.
Additionally, NewGen will identify how the COS model and the new PIF model are aligned with regard to
determining fixed costs for the Utilities and ensuring that revenue contributions (from the PIF) are
properly recognized in terms of impacts to the revenue requirement. The COS model review will also
include an assessment of the load characteristics by customer class and the processes and procedures in
place by Utilities to update information accordingly. The result of this COS model review will be the
development of a summary report indicating areas of the model that are consistent with industry best
practices, as well as potential recommendations for model improvements, if any. NewGen envisions one
on‐site meeting for the purposes of conducting the three COS model reviews.
Task 4 – Present to City Council. In close coordination with the Utilities’ project team, NewGen will
create a presentation of the findings developed during the PIF and COS model reviews. This presentation
will also include an analysis of the potential financial impacts to developers / customers associated with
the fees that are identified as a result of the new PIF model, to the extent they are different from existing
PIF. NewGen anticipates a total of three on‐site meetings for Task 4; one to develop the presentation
materials; one to review the draft presentation; and one meeting to present to the City Council. Additional
conference calls and/or web‐based meetings may be scheduled as necessary for this task.
To complete the tasks identified above, NewGen will require the assistance of the City, and specifically
the Utilities, personnel. This assistance will be in the form of providing timely and responsive access to
data requested (including, but not limited to, information on the square footage charge, front footage
charge and capacity charge in terms of costs, equipment, labor and other associated costs to the City), as
well as being responsive to requests for conference calls, meetings, draft report reviews and other project
deliverables. Specific actions, data and responsibilities required for the Utilities’ project teams will be
discussed and defined during the initial project meeting (as described above in Task 1).
C. ASSIGNED PERSONNEL
Primary Contact
The following is the primary contact information for the party responsible for executing this solicitation
as well as the party authorized to manage the contract. Our Proposal Acknowledgement form is included
in Appendix A.
Point of Contact Address Telephone
Number
Email Address
Project Manager
Scott Burnham
Executive Consultant
225 Union Blvd, Ste 305
Lakewood, CO 80228
(720) 259-1762 sburnham@newgenstrategies.net
Contract Management
Tony Georgis
Director
225 Union Blvd, Ste 305
Lakewood, CO 80228
(720) 633-9496 tgeorgis@newgenstrategies.net
CITY OF FORT COLLINS
PROPOSAL NO. 8289: ELECTRIC CAPACITY FEE AND COST OF SERVICE REVIEW
4 Thoughtful Decision Making for Uncertain Times
Project Personnel
Full resumes for each team member are included in Appendix B. The following is a summary of the
professional experience applicable to this assignment for each member of the NewGen project team.
List of Key Personnel Experience and Qualifications
Scott Burnham
Project Manager
Location: Denver, CO
Mr. Scott Burnham, Executive Consultant at NewGen Strategies and Solutions, LLC
(NewGen), offers over 18 years of experience in the areas of project management, cost
of service and rate design, asset valuation, and financial feasibility analysis. Mr.
Burnham leads efforts to create financial models that develop revenue requirements,
cost allocation, financing for strategic capital and operating objectives, and rate/rate
structure alternatives, ensuring our clients have reliable and defensible results.
Additionally, Mr. Burnham routinely presents study findings and recommendations to
utility management, boards, city councils, and other governing bodies. Mr. Burnham is
well-versed in cost allocation theories and methodologies, rate design concepts and
approaches, and providing summary analyses and recommendations to industry clients.
Mr. Burnham co-leads the semi-annual Cost of Service and Rate Design classes
through EUCI, an industry conference organization, which are routinely attended by all
types of utility stakeholders.
Tony Georgis
Client Liaison & QA/QC
Location: Denver, CO
Mr. Tony Georgis has more than 17 years of experience in the energy and water utility
industries. His work includes various assignments for private industry, local
governments, and utilities on COS and rate studies, strategic planning, sustainability,
financial and economic analyses, energy efficiency, and market research. He has
managed multiple utility COS and rate design studies including the development of
financial forecast models, revenue requirements, unbundling costs, classifying costs,
and allocation factors.
In support of sustainability strategy projects, Mr. Georgis has developed frameworks,
optimization and decision models for sustainability program prioritization and
monetization of climate change regulatory, market and physical impacts.
Max Bernt
Senior Consultant
Location: Denver, CO
Mr. Max Bernt holds a BA with Distinction from the University of Colorado - Boulder in
Economics. Prior to beginning his career as an economic consultant, Mr. Bernt
served in the United States Air Force as a Linguist and Intelligence Analyst. He has
experience in economic model design, COS, rate design, economic impact analysis,
pro forma financial analysis, depreciation analysis, database creation, large dataset
management and analysis (e.g., Advanced Metering Data), and is extensively involved
with the development and use of advanced economic analysis technologies and
applications.
Matt Beale
Analyst
Location: Denver, CO
Mr. Matthew Beale currently serves as an Analyst of NewGen Strategies and
Solutions, LLC Energy Practice. He has been in this role since August 2014 providing
Financial/Economic Analysis for the firm. Prior to joining NewGen, Mr. Beale attended
the University of Colorado at Boulder earning his Bachelor of Science in Applied
Mathematics.
Sub-consultant
NewGen does not intend to utilize a sub‐consultant for this assignment.
CITY OF FORT COLLINS
PROPOSAL NO. 8289: ELECTRIC CAPACITY FEE AND COST OF SERVICE REVIEW
Thoughtful Decision Making for Uncertain Times 5
D. AVAILABILITY
NewGen commits that the key personnel named in this proposal will be the personnel working on the City
assignment. Members of the project team have worked together on projects and understand and
appreciate the need for continuity of personnel. The NewGen Project Manager (Scott Burnham) and
Analysts (Max Bernt and Matt Beale) will be involved in all phases of the project. As Client Liaison, Tony
Georgis is available at any time to talk or meet with City or Utilities personnel to discuss project progress
and/or any issues that may arise during project implementation. Specific hours estimated for each project
task and personnel, including time required for meetings, conference calls, etc., are provided in Section F
(Cost and Work Hours).
Upon receiving notice to proceed, the Project Manager will schedule time for the Project Team for this
assignment and coordinate schedules with other project work. NewGen has sufficient depth of staff to
handle the workload required for the City and will make the project personnel identified herein available
for this project.
We are committed to continuously improving the quality of our services, providing for the successful
completion of our projects, and maximizing the value to our clients. As part of this commitment, we have
developed procedures for monitoring performance and soliciting feedback that includes the following
elements:
Frequent communications with City / Utilities regarding the project scope, personnel, cost, and
schedule
Monthly status reviews of the project
Internal NewGen review of deliverables by a qualified reviewer
The Project Manager is responsible for completion of the identified tasks and deliverables herein for this
assignment as well as ensuring that our standard operating procedures are followed. Our commitment
to customer responsiveness starts with on‐time delivery of high‐quality project deliverables, within the
budgetary provisions. Our extensive experience enables us to anticipate and solve challenges, problems,
and issues before they adversely affect the project.
Proposed Schedule
Assuming a project award no later than June 1, 2016, and timely receipt of requested
information/meetings and draft deliverable review and comment by the Utilities project team, NewGen
is able to meet the City’s project schedule, which requires completion of the study and presentation prior
to October 15, 2016.
E. SUSTAINABILITY/TBL METHODOLOGY
NewGen regularly advises clients and communities across the country in supporting reductions of the
amount of waste going to landfills, optimizing financial and economic performance, or developing
sustainability strategies. Additionally, NewGen has recently committed to sharing our success within the
communities we serve and live. In 2015, NewGen committed to giving one percent of our gross revenues
to charity each year. As a part of that commitment, we dedicate a portion of the contribution to nationally
recognized organizations, while also targeting our own communities and local charities where we serve
and live.
CITY OF FORT COLLINS
PROPOSAL NO. 8289: ELECTRIC CAPACITY FEE AND COST OF SERVICE REVIEW
6 Thoughtful Decision Making for Uncertain Times
In addition to supporting our local charities, NewGen regularly supports sustainability in its own business
practices by purchasing recycled materials for its office supplies (paper products), participating in our
buildings recycling program, as well as re‐using office furniture and materials from previous endeavors.
By reducing our purchases of new materials and utilizing recycled products first, we are committed to
helping to reduce “the impact of our activities on the world” including our “social, human and
environmental capital.” Our office is also located directly across the street from Denver light rail access
to reduce our staff’s vehicle emissions.
F. COST AND WORK HOURS
The estimated not‐to‐exceed cost to complete the City’s Electric Capacity Fee and Cost of Service Review,
as defined by the Scope of Work herein, is $46,000. A summary of the estimated hours and costs by tasks
is provided below, which includes the schedule of rates by project personnel as well as estimated travel
related expenses (miles / travel day per diem for meals, as appropriate and as identified in the City’s
exhibit titled “Fort Collins Expense Guidelines – Lodging, Per Diem Meals and Incidentals and Other
Expenses,” dated January 1, 2016). Additional meetings would be charged on a per hour, per person basis
(utilizing the rates table below), including applicable travel‐related expenses, and are estimated to be
$700 for each additional meeting.
Not-to-Exceed Budget for Electric Capacity Fee and Cost of Service Review1
Task
Scott
Burnham
Max
Bernt
Matt
Beale
Tony
Georgis Admin
Total
Hours
Total
Cost
Hours
Task 1 18 12 12 4 5 51 $8,800
Task 2 16 32 60 4 0 112 $16,900
Task 3 16 16 24 4 0 64 $11,000
Task 4 24 12 0 4 4 44 $8,600
Total Labor Hours 74 72 96 16 9 271
Total Labor Cost $16,700 $11,500 $11,500 $4,900 $800 $45,400
Travel Expenses $600
Total Not-to-Exceed $46,000
1. Number may not add due to rounding.
The following table includes the NewGen Project Team applicable hourly billing rates for this assignment.
Hourly Billing Rates
Staff Name Title Hourly Rate
Scott Burnham Executive Consultant $225
Tony Georgis Director $245
Max Bernt Senior Consultant $160
Matt Beale Analyst $120
Administrative Administrative Assistant $85
CITY OF FORT COLLINS
PROPOSAL NO. 8289: ELECTRIC CAPACITY FEE AND COST OF SERVICE REVIEW
Thoughtful Decision Making for Uncertain Times 7
G. FIRM CAPABILITY
Company History
NewGen is a management and economic consulting firm
specializing in serving the utility industry and market. NewGen
provides strategy, financial, valuation, stakeholder, and
sustainability services to public and private clients.
Furthermore, each team member included in this proposal is
deeply familiar with COS models, rate making, public
engagement, and municipal utility operations, having spent the
majority of their careers supporting public power and utilities.
NewGen was created by consultants who are dedicated to our client’s mission and recognized as experts
in our respective fields of service. Our assistance to the public and private sectors is provided with a keen
insight to navigate the uncertain market and the growing role of stakeholders, resource availability, cost
of providing utility services, and economic conditions. This ensures an integrated approach to delivering
our products and services.
NewGen professionals provide the expertise gained from more than 130 COS studies and 125 expert
witness cases and filings supporting utility customers, regulatory staff, and utilities.
“Thoughtful Decision Making for Uncertain Times” succinctly describes our capability to provide our
clients solutions and recommendations tempered with thorough understanding of the growing role of
stakeholders, resource availability (including renewables), environmental concerns, cost of providing
utility services, and economic conditions.
Company Description
NewGen was created in 2012 by several former owners and directors from R. W. Beck, Inc. (now SAIC and
Leidos). We have offices in Amarillo, Austin and Dallas, Texas; Denver, Colorado; Lapeer, Michigan;
Nashville, Tennessee; Seattle, Washington; and Sioux Falls, South Dakota. NewGen primarily serves public
power markets including nationally recognized experts in utility cost of service and rate design studies,
litigation support for state and federal regulatory proceedings, utility business and financial planning, and
stakeholder engagement for electric, water, wastewater, and natural gas utilities. NewGen is a limited
liability company and does not have a parent company.
Currently, NewGen employs over 35 professionals, with 9 ownership members (e.g. Directors) and a Board
of Directors.
Proposed Project Team and Organizational Chart
Our project team consists of consultants located in our Denver, Colorado office. Team members have
significant and recent experience in the development of rate strategies and supporting policies; financial
planning; development of COS analysis; and rate design that improves fixed cost recovery, promotes
conservation, supports renewable energy initiatives, and sends time differentiated pricing signals.
Furthermore, team members have considerable experience with the public process including utility board
workshops, stakeholder engagement, education, and training.
The organizational chart below shows the structure of the NewGen project team and roles and
responsibilities.
NewGen applies our expertise and
delivers high impact solutions
through our diverse and integrated
market perspectives; resulting in
effective decision‐making and
implementation.
CITY OF FORT COLLINS
PROPOSAL NO. 8289: ELECTRIC CAPACITY FEE AND COST OF SERVICE REVIEW
8 Thoughtful Decision Making for Uncertain Times
Firm Qualifications
Since NewGen’s inception in 2012, we have conducted over 130 economic and rate studies nationwide,
involving COS, rate design, and rate case participation. In conducting these studies, NewGen has
experience with analyzing and taking into consideration key components similar to those included in the
City’s RFP including, but not limited to, developer fees, line‐extension analysis, distributed generation, net
metering, economic development, fixed cost recovery, streetlight rates, time‐of‐use, and OATT
transmission wheeling rates.
NewGen has built its reputation by providing clients with solutions that are based on sound principles,
economic feasibility, and innovative thinking without losing sight of budget and schedule considerations
and constraints. We are proud of the long‐term relationships that we have developed with our existing
clients.
Project Profiles
Below we have included selected project descriptions related to client engagements performed within
the past five years, which we believe are relevant to services being requested by the City. NewGen can
provide additional examples of prior work experience, if requested.
Project Manager
Scott Burnham
Analytical Support
Max Bernt
Matt Beale
Client Liaison and
QA/QC
Tony Georgis
CITY OF FORT COLLINS
PROPOSAL NO. 8289: ELECTRIC CAPACITY FEE AND COST OF SERVICE REVIEW
Thoughtful Decision Making for Uncertain Times 9
Benton Public Utility District – Annual Facilities Charge, Cost of Service Analysis, and Ratemaking
(Kennewick, WA)
Project Team Personnel: Tony Georgis
Beginning/End Price: $119,800 / $136,000
Change Orders: One change order due to client requesting additional services
Contact Name: Kevin White, Director of Finance
Contact Phone/Email: 509‐582‐1235 / whitek@bentonpud.org
NewGen was retained by Benton Public Utility District (Benton PUD) to perform a comprehensive COS and
rate design study. In addition to developing the COS / rate design for Benton PUD, NewGen was retained
to review the methodology and calculation of its Annual Facilities Charge (AFC) for the large agricultural
customer class. The AFC was developed to recover the significant amount of fixed costs associated with
initially serving and maintaining the infrastructure dedicated to this specific customer class, due to unique
investment requirements associated with the large and dispersed nature of the customers. Benton PUD
had originally developed the AFC methodology based on the Utility, rather than Cash basis, to recover
costs associated with customer‐specific plant investments, related operations and maintenance expenses,
and replacement costs. Specifically, NewGen was requested to conduct the following:
1. Review the existing AFC methodology and model including the development of each component
(e.g. plant investment and related distribution O&M, A&G, and taxes)
2. Evaluate alternative methodologies to ensure the existing AFC is properly and adequately
recovering costs
3. Evaluate existing and alternative methodologies and related rate design impacts to individual
customers to identify any misalignment or equity issues
4. General quality assurance / quality control review of the model
5. Present findings / recommendations with Benton PUD management and staff
NewGen completed the review to the satisfaction of the Benton PUD management and staff, which
confirmed the existing AFC rates and supported the transition from a Utility to Cash‐bashed methodology
and cost recovery mechanism.
CPS Energy – Financial Planning (San Antonio, Texas)
Project Team Personnel: Max Bernt
Beginning/End Price: $60,000 / $60,000
Change Orders: None
Contact Name: Eugene Diaz, Financial Services Project Manager
Contact Phone/Email: 210‐241‐8613 / ediaz@cpsenergy.com
To support informed financial decisions and consolidation of multiple financial tools, NewGen worked
closely with CPS Energy (CPS) staff to develop an integrated financial planning and reporting tool. The tool
is designed to perform real‐time scenario analyses and is integrated with existing budgeting, generation
planning, and rate models or reports. Interactive, visual dashboards and custom reports summarize and
communicate scenario results, sensitivities and financial KPIs to facilitate senior management decisions.
NewGen conducted multiple planning workshops with CPS finance and accounting staff to identify model
requirements including appropriate inputs, desired outputs, and overall structure. The model is capable
of running multiple, real‐time scenarios representing various business plans and is an Excel‐based model,
which utilizes VBA coding. The model was integrated with CPS Energy’s budgeting, cost of service, and
CITY OF FORT COLLINS
PROPOSAL NO. 8289: ELECTRIC CAPACITY FEE AND COST OF SERVICE REVIEW
10 Thoughtful Decision Making for Uncertain Times
generation planning models, as well as other financial and operating inputs. A key element of the model
includes a customized data input module that allows CPS staff to automate the input of data using
standardized forms and batch inputs.
Integrating visual dashboards and automated reporting allows the users to optimize debt, rate, and capital
funding options while calculating key financial performance and reporting metrics. The model allows CPS
Energy to perform two‐year financial projections on a monthly basis while allowing for 25‐year projections
on an annual basis.
Key issues addressed during the project included:
Automation of input data from other sources/systems
Streamlined process for updating the financial model, significantly reducing CPS staff time
required for financial reporting
Embedding scenario analysis tools allowing instantaneous comparisons of multiple scenarios and
the ability to recall and benchmark previously saved scenarios at any time
One of the key outcomes and benefits of the project, was the creation of a custom dashboard available
on the CFO’s desktop, allowing for real‐time scenario analysis and review of financial performance and
Key Performance Indicators at any time. NewGen continues to support CPS Energy and the financial
planning model providing updates to the model and increasing the capabilities of the model as requested
by staff.
Farmington Electric Utility System – Cost of Service and Rate Design Study (Farmington, New Mexico)
Project Team Personnel: Scott Burnham
Beginning/End Price: $65,000 / $65,000
Change Orders: None
Contact Name: Sue Nipper, Utility Business Operations Manager
Contact Phone/Email: 505‐599‐8311 / snipper@fmtn.org
As part of a review of the Farmington Electric Utility Systems (FEUS) Cost of Service and Rate Design Study,
Mr. Burnham (working for his previous employer) led the effort to review existing and projected
generation, transmission and distribution expenses including the development of a capital reserve fund
for future investments. The analysis also reviewed FEUS’ cash reserve policy and re‐based the Power Cost
Adjustment rate rider to reflect current cost estimates. A three‐year Test Year revenue requirement was
developed based on the Capital Improvement Plan and existing load data. A comparison to regional rates
and rate structures was reviewed for inclusion in the study presentation and report. Mr. Burnham
successfully presented the study results to the City of Farmington Council, which passed the measure to
implement the proposed rates in 2013.
In the spring of 2016, NewGen was hired to conduct a comprehensive review of FEUS’s cost structures for
its 2016 rate study, the process for which was recommended in the earlier analysis. This updated analysis
will include a review of FEUS’s construction costs, including associated overhead rates, to establish a labor
rate for billed services (as well as to update FEUS’s overall fees for developers / new load). Overhead
costs will include transportation, engineering, business operations, supervision, administrative and
general (A&G), indirect labor, and tools and other expenses. This project has been initiated and is
expected to be completed by the fall of 2016.
CITY OF FORT COLLINS
PROPOSAL NO. 8289: ELECTRIC CAPACITY FEE AND COST OF SERVICE REVIEW
Thoughtful Decision Making for Uncertain Times 11
Lubbock Power and Light – Financial Planning, Cost of Service and Rate Making (Lubbock, Texas)
Project Team Personnel: Tony Georgis and Max Bernt
Beginning/End Price: $260,000 / $354,875
Change Orders: Three change order due to client requesting additional services
Contact Name: Chad Sales, Financial Planning Manager
Contact Phone/Email: 806‐775‐2535 / csales@mail.ci.lubbock.tx
NewGen provided utility financial planning, and COS and rate design services for the City of Lubbock and
Lubbock Power and Light (LP&L). In support of LP&L’s efforts to more accurately forecast and manage
costs, we developed a financial forecasting model and tool for the electric utility. The financial model
analyzed, evaluated, and optimized the utility’s full revenue requirements, potential debt issuances,
capital plans, and rate changes. The financial model was used to perform scenario analyses and evaluate
an optimal mix of debt, rate changes, and capital for the utility. Using the financial model and scenario
analysis results, NewGen completed a COS and rate design study to accurately develop customer class
costs and subsequent rates. In support of the study, NewGen led a rates and financial workshop for City
Council, LP&L, and City staff to train staff on the COS process and financial model. NewGen is also
providing periodic training and progress updates to City and LP&L staff to ensure local utility staff will
adopt and utilize the new tools for future rate and financial planning efforts.
South Carolina Public Service Authority – Cost of Service and Rate Design (Moncks Corner, South Carolina)
Project Team Personnel: Scott Burnham
Beginning/End Price: $300,000 / $264,450
Change Orders: None
Contact Name: Traci Grant, Rates and Pricing Manager
Contact Phone/Email: 843‐761‐8000 ext 5091 / tjgrant@santeecooper.com
The proposed Project Manager for this assignment, Scott Burnham, led his former company’s (Leidos and
formerly SAIC) cost of service and rate design efforts on behalf of South Carolina Public Service Authority
(Santee Cooper) for approximately 5 years. This effort included reviewing new service offerings (rates),
new rate designs and structures, and financial policy revisions including the development of a demand
response buy‐back tariff (for interruptible customers). Members of the NewGen team also provided
assistance with the development of the 2012 and 2015 Rate Studies, which included reviewing the
revenue requirement, cost allocation methods, and proof of revenue analysis. These assignments
included presenting before, and working with, Santee Cooper’s Industrial Customer Association to
develop new Industrial rate service offerings.
Of particular relevancy to the City/Utilities project, Mr. Burnham led a successful review and analysis of
Santee Cooper’s Line Extension Policy and related tariff. Task encompassed reviewing and developing
fees and charges for fixed cost investments for developers / new retail services within Santee Cooper’s
service territory. The Line Extension Policy was reviewed with Santee Cooper engineering and rates staff,
and was ultimately approved by the Santee Cooper Board of Directors.
CITY OF FORT COLLINS
PROPOSAL NO. 8289: ELECTRIC CAPACITY FEE AND COST OF SERVICE REVIEW
12 Thoughtful Decision Making for Uncertain Times
APPENDIX A – PROPOSAL ACKNOWLEDGEMENT
CITY OF FORT COLLINS
PROPOSAL NO. 8289: ELECTRIC CAPACITY FEE AND COST OF SERVICE REVIEW
Economics | Strategy | Stakeholders | Sustainability
www.newgenstrategies.net
APPENDIX B – RESUMES
Scott H. Burnham
Executive Consultant
sburnham@newgenstrategies.net
Economics | Strategy | Stakeholders | Sustainability
www.newgenstrategies.net
Mr. Scott Burnham joined NewGen Strategies and Solutions, LLC (NewGen) as an Executive Director in April 2016.
Mr. Burnham offers over 18 years of experience in the areas of financial feasibility, cost of service (COS) and rate
design analysis, asset valuation, and restructuring for electric utilities. His project responsibilities have included
financial analyses, asset appraisals and evaluations, and project management. He has taught numerous classes on
cost of service and rate design methodology, including courses for Electric Utility Consultants, Inc.
RELEVANT EXPERIENCE
Prior to Joining NewGen, Mr. Burnham’s experience includes:
Cost of Service and Rate Design
Mr. Burnham has both participated in and led the review of cost of service and retail rate design practices for
numerous electric utilities. Services provided include development of historical and projected revenue requirements
and the development of defensible cost allocation methodologies to apply to clients’ customer classes. He has
utilized COS methodologies unbundling approaches, cost classification techniques, cost allocation methods, and rate
design alternatives. He has provided the technical and financial analysis associated with the distribution,
transmission, and generation functions of the utility.
Mr. Burnham has led projects requiring re‐classification of various large energy users within the system from
contract rates to tariff rates. Mr. Burnham has determined fixed cost allocation by customer class from detailed
feeder analysis, provided testimony support of revenue requirement in a litigated hearing process, and developed
testimony to support utility response for Feed‐In Tariff program.
He has also reviewed existing COS analysis associated with the street lighting and traffic lighting retail rate classes.
He has developed specific rates and rate programs for the industrial customer base, including the development of
interruptible rate offerings that provided a benefit to both the industrial customer and the client. Mr. Burnham has
provided methodology and analysis to determine the value associated with various distributed solar technologies.
Mr. Burnham has been responsible for leading the analysis and development of the presentations and reports and
for presenting results and recommendation, including proposed rates, before numerous city councils and governing
boards. Additionally, he has been involved in facilitating citizen’s advisory groups and stakeholder processes to
solicit input into rate design. Mr. Burnham’s cost of service and rate design clients include the following:
Redding Electric Utility, California
Farmington Electric Utility System, New Mexico
South Carolina Public Service Authority
(Santee Cooper), South Carolina
Colorado Springs Utilities, Colorado
Fort Collins Utilities, Colorado
Virgin Islands Water and Power Authority, U.S.
Virgin Islands
Lafayette Consolidated Government, Louisiana
Austin Energy, Texas
Riverside Public Utilities, California
REFERENCES
Ms. Traci Grant
Rates and Competitive Pricing
Manager South Carolina Public
Service Authority (Santee Cooper)
843‐761‐8000 ext.509
traci.grant@santeecooper.com
Mr. Mark Haddad
Assistant Director‐Financial and
Business Services/CFO
Redding Electric Utility
530‐339‐7383
mhaddad@ci.redding.ca.us
Ms. Sue Nipper
Utility Business Operations Manager
Farmington Electric Utility System
505‐599‐8311
snipper@fmtn.org
Tony Georgis
Director, Energy Practice
tgeorgis@newgenstrategies.net
Economics | Strategy | Stakeholders | Sustainability
www.newgenstrategies.net
Tony Georgis brings more than 15 years of experience in engineering and economic analyses for the energy, water,
and waste resources industries. His work includes various assignments for utilities, local governments, and private
industry, including cost of service and rate studies, sustainability strategy and strategic planning studies, financial
and economic analyses.
RELEVANT EXPERIENCE
Cost of Service and Rate Design
In his role as senior consultant and project manager, Mr. Georgis leads numerous utility financial planning, cost of
service, and rate design projects. Specific tasks have included the development of the revenue requirements,
functionalization of costs, allocation of costs to customer classes, review of existing customer class criteria,
evaluation of line extension and facilities charges, designing rates, and transitioning cost of service and rate models
for staff use in updating future cost of service and rate studies. He has also led the development of financial
forecasting models to support long‐term capital, expense, and revenue budgeting. Mr. Georgis is an expert in cost
of service, rate and related allocation methodologies and has experience as an expert witness in the regulated utility
process.
In addition to Mr. Georgis’ cost of service and rate experience, his public power experience includes benchmarking
utility payments in lieu of taxes and transfers to general funds, facilitation of stakeholder groups, developing rate
strategies, strategic planning, distributed generation assessments, and energy efficiency program development. Mr.
Georgis regularly presents to utility boards and city councils and facilitates numerous workshops in support of cost
of service results and teaching cost of service methodologies. Mr. Georgis’ clients and project experience for cost
of service and rate design include:
Fort Collins Utilities, Colorado
Colorado Springs Utilities, Colorado (multiple
projects)
La Plata Electric Association, Durango, Colorado
Lubbock Power and Light, Texas (multiple projects)
City of Weatherford, Texas (multiple projects)
New Braunfels Utilities, Texas
City of Garland, Texas
Austin Energy, Texas
Lafayette Utility Systems, Louisiana (multiple
projects)
Farmington Electric Utility Service, New Mexico
American Samoa Power Authority, American
Samoa
Merced Irrigation District, California
Alameda Municipal Power, California
Vernon Gas and Electric, California
Arizona Public Service, Arizona
Benton Public Utility District, Washington
Farmington Electric Utility, New Mexico
U.S. Army; Huntsville, Alabama (multiple
projects)
REFERENCES
Mr. Kevin White
Benton PUD
Director of Finance
509‐582‐1235
whitek@bentonpud.org
Mr. Rich Dragonajtys, P.E.
Merced Irrigation District
MEID Energy Resources
209‐354‐2844
rdragonajtys@mercedid.org
Mr. Chad Sales
Lubbock Power and Light
Maxwell Bernt
Senior Consultant
mbernt@newgenstrategies.net
Economics | Strategy | Stakeholders | Sustainability
www.newgenstrategies.net
Max Bernt works with many municipal utilities, electric cooperatives, private entities, and the federal government
to provide economic and financial consulting and litigation support. Mr. Bernt has experience in cost of service, rate
design, economic impact analysis, pro forma financial analysis, depreciation analysis, database creation, and large
dataset management and analysis (e.g., Advanced Metering Data), and is extensively involved with the development
and use of advanced economic analysis technologies and applications.
Mr. Bernt joined NewGen Strategies and Solutions, LLC in January 2013; prior to that time he was a financial and
economic analyst for SAIC/Leidos (formerly R.W. Beck) and served in the United States Air Force as a Linguist and
Intelligence Analyst.
RELEVANT EXPERIENCE
Cost of Service and Rate Design – Electric
Mr. Bernt serves as a senior consultant and lead analyst for various cost of service and rate design studies. He has
created cost of service and rate design models that utilize system AMI data to determine class cost of service and
appropriate rates to collect revenue requirement. The model allows for consolidation of customer classes, shifting
of customers between classes based on specified distinction (size, location, etc.), economic impact from rate changes
at individual customer level, and the development of rates for new classes (e.g., Transmission Service) and advanced
time‐of‐use based rates.
Mr. Bernt has designed time sensitive rates for power and transmission as well as renewable energy generation
credits. He developed a wholesale rate design model that utilizes the wholesale customers’ half‐hour interval data
to monitor both rates and resulting wholesale utility customer impacts.
He has also examined various standby rate alternatives in support of a utility client’s large industrial end‐use
customer. Rate design considered reservation charges, firm backup charge, maintenance period charges, Open
Access Transmission Tariff (OATT), and a supplemental power charge. Each rate alternative was applied to the
customer’s hourly load profile assuming self‐generation to determine the overall economic effect of the standby
rate on the client’s revenues and the customer’s self‐supply options. Projects include:
Bryan Texas Utilities, Texas
Provo, Utah
United Power Electric Cooperative, Colorado
Lubbock Power & Light, Texas
Tri‐State Generation & Transmission
Association, Inc., Colorado
Anaheim Public Utilities, California
Austin Energy, Texas
REFERENCES
Mr. Eugene Diaz
Financial Services Project Manager
CPS Energy
Mobile: 210.241.8613
EDiaz@CPSEnergy.com
Mr. Chad Sales
Financial Planning Manager
Lubbock Power & Light
806.775.3112
CSales@mail.ci.lubbock.tx.us
Mr. Dean Hubbuck
Manager of Engineering & Rates
United Power
303.637.1209
DHubbuck@UnitedPower.com
Matthew Beale
Analyst
mbeale@newgenstrategies.net
Economics | Strategy | Stakeholders | Sustainability
www.newgenstrategies.net
Matthew Beale serves as an Analyst for the Energy Practice at NewGen Strategies and Solutions, LLC. He has been
in this role since August 2014 providing financial and economic analysis for the firm. Mr. Beale has experience in
conducting cost of service studies, depreciation studies, load forecasting, and cost allocation modeling.
RELEVANT EXPERIENCE
Cost of Service and Rate Design – Electric
Mr. Beale serves as an analyst for various cost of service and rate design studies. He has assisted on cost of service
and rate design models that utilize system AMI data to determine class cost of service and appropriate rates to
collect revenue requirement. The model allows for consolidation of customer classes, shifting of customers between
classes based on specified distinction (size, location, etc.), economic impact from rate changes at individual customer
level, and the development of rates for new classes (e.g., Transmission Service) and advanced time‐of‐use based
rates.
Mr. Beale helps develop and program various financial models. These models use sophisticated Visual Basic
programming to create dynamic functions as editing inputs with a pop‐up form, saving and loading different
scenarios, and generating reports. Mr. Beale programmed a Microsoft Excel model that domestic and international
United States Army installations utilize to receive reimbursement from base tenants for provided utility services.
The model can also generate custom reports and invoices to send to tenants. Project include:
His projects include:
City of Denton, Texas
Lafayette Utilities System, Louisiana
CPS Energy, Texas
EDUCATION
Bachelor of Science in Applied Mathematics,
University of Colorado
Minor in Economics, University of Colorado
U.S. Army, Huntsville, Alabama
Keys Energy, Florida
REFERENCES
Mr. Daniel Galizia
Financial Analyst
City of Denton
940‐349‐8119
Daniel.Galizia@cityofdenton.com
Ms. Monika Cormier
Applications Support Specialist
Lafayette Utilities System
337‐291‐8094
mcormier@lus.org
Mr. Murty Dinivahi
US Army INCOM HQ
General Engineer, Energy &
Utilities
210‐466‐0587
murty.v.dinivahi.civ@mail.mil
Financial Planning Manager
806‐775‐2535
csales@mail.ci.lubbock.tx.us