Project development and transaction support

Investments in the development of new or existing long-lived, capital-intensive assets and  long-term, asset-based contracts can be especially risky in the current environment of market and regulatory change. Project investment risks are often driven by uncertainties in multiple areas. For the investment to be successfully carried out, risks must be assessed, allocated, and mitigated from the varying perspectives of the project developers/sponsors, lenders, owners, and insurers. Yet, regardless of the perspective and whether the project risks are physical or financial, the following sources of uncertainty are common to all:

• Energy sector policy
• Regulatory support
• Electric power markets
• Fuel supply
• Transmission

To assess the influence of uncertainties in these five key common risk areas, Bates White has assembled an outstanding team of recognized energy economists and engineers that possess expertise in policy and regulation, fuels pricing and transportation, and generation and transmission planning and operations. Our experts successfully bring together a thorough understanding of the latest changes in federal and state energy policies and regulations, the planning and operational protocols of the North American regional transmission systems, and the latest technical and financial analysis techniques and models.

Bates White helps maximize the value of generation assets by identifying and assessing the markets that can most effectively be served by comparing project generation and transmission costs to market prices. Our forecasts of revenues and costs employ widely used hourly, transmission-constrained, chronological-dispatch production costing models; custom models to forecast the production of solar thermal and photovoltaic generating plants; and empirically-obtained hourly wind generation data. The transmission power flow and voltage stability modeling techniques used by our analysts have withstood the highest degree of regulatory scrutiny. Our experts have testified before FERC and state regulatory agencies and have provided technical and policy assistance to regulators and transmission planning agencies.

For more information about our experience in supporting parties engaged in litigation, arbitration, and regulatory proceedings related to energy assets, click here.

Selected Work

• Authored the Baja California electricity and natural gas supply and demand forecasts and infrastructure development plans sections of the Energy Supply and Demand Assessment for the Border Region—Consultant Report. 
• Supported a major wind project developer in the evaluation of transmission options to wheel several hundred megawatts from Northern Baja California, México, to California utilities. 
• Provided consulting services to California Energy Commission in developing the 33% renewable energy goals, market price referent, and feed-in tariff mechanism. 
• Advised CFE on the integration of its fuel (natural gas, oil, and coal) procurement and risk management functions. 
• Conducted valuations of all Central Maine Power power plants in support of the company’s negotiated sale of generation assets to FPL Energy. 
• Provided natural gas market and infrastructure support to sellers and buyers of electric generation facilities. 
• Developed a probabilistic risk management model for market price forecasting, asset valuation, and power supply cost analysis. 
• Conducted multiple reliability studies on behalf of Exelon Corporation related to the potential retirement of the Zion, Limerick, Three Mile Island, and Oyster Creek nuclear power plants. 
• Conducted a comprehensive production cost modeling study on behalf of New York Regional Interconnect, Inc. (NYRI), related to NYRI’s application to the New York Public Service Commission to construct and maintain a state-of-the-art 190-mile, 1,200 MW HVDC transmission line.
• Expert witness in the independent reliability needs assessment and economic impact analysis for the proposed 275-mile-long 765-kV Potomac Allegheny Transmission Highline for the Public Utility Commission of West Virginia. 
• Conducted risk assessment and valuation of complex structured transactions involving power plants and associated long-term contracts using a proprietary fundamental price forecasting model with stochastic draws on key inputs.
• Performed power plant valuation of the TNP One lignite-fueled unit for Texas–New Mexico Power Company to support the asset sale strategy, as well as litigation with respect to stranded costs.
• On behalf of Union Fenosa, a major Spanish energy company, provided technical and regulatory advice regarding a 500-MW wind project in northern Baja California, México, on the technical, commercial, and regulatory aspects of interconnection and new transmission infrastructure for export to California. 
• Conducted a study on the implications of allowing the Volumetric Ethanol Excise Tax Credit to expire at the end of 2010. 
• Managed the independent reliability needs assessment of the proposed 265-mile 502 Junction-Mt. Storm-Meadow Brook-Loudoun 500 kV Transmission Line for the Virginia State Corporation Commission. 
• Conducted economic due diligence and transaction structuring, including market assessment, price forecasting, and risk assessment on portfolios of generating assets and contracts on behalf of private equity investors. The portfolios included cogeneration and gas-fired assets, as well as contracts for power and thermal off-take and fuel supply and transport.
• Retained by Macquarie Capital USA to conduct market and commercial due diligence in the acquisition of the partially built Norte III combined cycle power plant, one of the largest of its kind in Mexico, from its bankrupt developer. 
• For almost ten years, Bates White has conducted regulatory and economic due diligence of numerous shared wind and solar PV generation facilities in México. The projects typically serve hundreds of small businesses with diverse ownership, wheeling over the incumbent utility’s transmission and distribution systems. Over time, the government policies and regulations governing the economic incentives (subsidized transmission and virtual energy storage) and cost allocation to these projects have changed, requiring Bates White to properly represent their impact on the projects financial models. As independent economic, market and regulatory advisor to the investors or lenders to these projects Bates White has not only focused on verifying the model’s financial logic, flow and calculations, but has often interacted with the project’s engineers to ensure the technology’s performance is properly modeled in the calculation of expected revenue during operations and expected costs during operations. 
• Analysis of economic and environmental benefits and costs of proposed gas-fired generation facility for pending permit application in Pennsylvania. 
• Conducted a valuation of a run-of-river hydroelectric facility under development in Mexico. 
• For two Canadian pension funds, conducted market and regulatory due diligence on a portfolio of greenfield hydroelectric and wind generation projects in various stages of development, including the feasibility of transmission access and the risk of security and social unrest. 
• Led the market and regulatory due diligence for the acquisition of a series of run-of-the-river mini-hydro generating facilities with an aggregate capacity of 122 MW in Colombia. 
• As transmission advisor to a major Spanish energy company, advised on the technical and economic aspects of a proposed 500-MW wind farm located in the northern Baja California, México. 
• Carried out market, regulatory, and commercial due-diligence as independent market consultant to senior lenders in the financing of the 125-MW La Ventosa–Eléctrica del Valle de México wind farm in Oaxaca, México.
• A Bates White expert conducted market, regulatory, and tariff analyses for financing due diligence of a 500-MW gas-fired combined-cycle plant independently owned and operated in México.