Creating a Long Range Gas Plan
industry & client situation
A leading New York utility wanted to develop a comprehensive 20-year plan for its gas business to 1) address shareholder pressures on capital and regulatory uncertainty, 2) Optimize management realignments, and the desire to reshape aspects of the culture, and 3) Focus on system integrity and growth (with expected decrease in gas prices) and selected Bridge to support the effort.
Bridge worked collaboratively with dedicated client teams to bring together interests of multiple functions (e.g. finance, regulatory) and operating units (e.g. transmission, distribution) to develop an integrated 20-year strategy with full testing of rate and shareholder implications
To ensure a strategic basis, Bridge facilitated development of 20-year demand forecasts for gas
- Introduced scenario approach to forecasting
- Incorporated impact of environmental legislation at the federal, state, and city level (e.g. energy efficiency targets, pending city regulation to phase out heavy oil for space heating)
- Incorporated impacts of new sources of growth including oil to gas conversions, natural gas vehicles, centralized power generation, and gas-fired distributed generation
- Conducted analysis and facilitated scenario definition sessions on gas supplies, particularly shale supplies, and gas price forecasts
Bridge, then worked with gas engineering and operations to define 20-year T&D plans that reflect
- Demand /growth forecasts for new business
- Regulatory targets for main replacement
- Asset management and tailored system design strategies
To complete the effort, Bridge worked with finance and accounting to develop rate and bill implications, conducted customer outreach, worked with regulators to clarify customer implications, and led the writing of the plan.
Gas Long Range Plan approved by the Board of Directors and well received by Public Service Commission