Serving the Power & Utilities Industry

What you face, how we help

Deloitte Center
for Energy Solutions
Contents
Contents

Deloitte knows the Power & Utilities industry 1

Opportunities and challenges for power and utilities 2

companies in todays environment

Industry trends affecting power and utilities companies 3

Client base and market share 11

Deloitte is a thought leader in the Power & Utilities sector 13

Deloitte delivers renowned industry conferences and actively

participates in industry events 14

Services offered through the Deloitte U.S. firms 15

Deloittes Power & Utilities industry leadership and specialists 17

Deloitte knows the
Power & Utilities industry.
We anticipate your business
opportunities and challenges.
October 13, 2014: SNL April 9, 2014: SNL Power Daily with
In a recent report, Evaluating M&A through a Market Report
changing utility lens: A fresh look at M&As role in The New Math: Solving the equation for
power and utilities, Deloitte states that although disruption to the U.S. electric power industry is
M&A has not historically been a top option for the third and last in a series of reports from the
regulated utilities because of concerns about Deloitte Center for Energy Solutions about the
regulatory obstacles and lengthy approval time changing landscape for the electric industry. Greg
lines, the current market makes M&A one of the Aliff, vice chairman and senior partner, Energy &
most effective strategies for delivering Resources, Deloitte LLP, and author of the reports,
near-term value and managing risk. Brian Boufarah, said those in the industry know that change and
Partner, Deloitte & Touche LLP and one of the disruption in the U.S. electric power sector is
reports authors, said in a recent interview that underway. Theres a general recognition that its
three key drivers for M&A exist in the current less about whether it will happen and more of a
environment: synergies, balance sheet needs and question of what should we be doing, he said.
new technologies.
February 20, 2014: Voice of Russia,
March 31, 2014: Forbes American Edition
Almost half of the engineers employed by power For the first time in about 30 years, the
and utility companies will become retirement Department of Energy is planning to invest billions
eligible this year, according to analysts from in the construction of greenfield nuclear energy
Deloitte Consulting, and venerable old electric facilities. In the wake of the 2011 Fukushima
companies are finding it increasingly difficult to crisis and the 1979 Three Mile Island incident,
attract new talent. This is really an unprecedented criticism of nuclear power has echoed across the
time, said Garth Andrus, a partner in Deloitte globe. Environmentalists warn that its an unsafe
Consultings human capital practice, during a power source. Branko Terzic, executive director
webinar for utility executives last week. Were of the Deloitte Center for Energy Solutions sees
finding all these individual kinds of turbulence and it differently. He praises American nuclear plants.
when you put them all together they really can Weve had about 20% of the electricity in the
create kind of a supercell storm of challenges. United States produced by our 102 nuclear power
plants. They have been operated well, many of
April 17, 2014: Energy Intelligence New Energy them cost effectively, says Terzic.
After a rotten time in 2011-12, when equity prices
tumbled and initial public offerings were put on January 17, 2014: SNL Financial
hold, renewable energy stocks have been staging In his 2014 Outlook on Power and Utilities, John
a comeback. Yieldcos and securitization are two McCue, vice chairman, U.S. Energy & Resources
financing structures that emerged in the last year Leader at Deloitte, said three areas of technology
which could potentially drive up stock values, said will continue to drive the evolution of the industry:
Marlene Motyka, head of alternative energy at advancements in shale oil and gas production,
consultancy Deloitte. advanced analytics enabled by in-memory database
technology, and advanced nano-engineered
materials. I think they will more and more insert
themselves in the power utilities value chain in the
coming years, McCue said in an interview.

As used in this document, Deloitte means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description
of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of
public accounting.
Opportunities and challenges
for power and utilities companies
in todays environment
The dynamics of global energy demand, supply, and Within the changing global energy environment, the
infrastructure dependencies have undergone more power and utilities sector has an opportunity to work
change in recent years than at any time since the 1970s. through this disruption and truly innovate. Many believe
profound change is inevitable and, in some respects, may
Demand in the developed world has moderated as well be self-fulfilling. However, many aspects of this subject
energy efficiency, conservation, and more resourceful continue to be debated:
commercial, industrial, and residential consumers How fast will todays business model change?
predominate. Simultaneously, as the population and What will the new model(s) look like?
economies of the developing world expand dramatically, Who will be the industry participants?
their appetite for energy grows accordingly. What roles will technology, customers,
and regulators play?1
Fortunately, the supply side dynamics are also
undergoing dramatic change, as deep water offshore The challenge in developing new and flexible business
discoveries, shale gas/liquids, oil sands, and a portfolio models will be to balance the industrys inherent catalysts
of renewable energy sources evolve to meet the changes of change against the industrys institutional barriers
in demand. Solving the equations to balance these to change. As boards and managements deliberate over
changes in demand and supply for the power and utility these barriers, it will be important to shift the lens of the
industry requires appropriate infrastructure: pipe and evaluation away from Why we cannot afford to change
transmission lines, power generation, distribution systems, Why we cannot afford NOT to change.2
smart technologies, energy efficiency technologies,
transportation infrastructure, liquid natural gas (LNG)
import/export terminals, pollution abatement investments,
etc. all in the right place, at the right time, at the right
price. Working to either advance and/or constrain these
adjustments is the timing, nature, and cost of an evolving
governmental regulatory and policy framework.

Power and utility companies have been making large

capital investments throughout the history of this industry,
yet the level of uncertainty present in todays decision-
making environment is unprecedented. The current
landscape raises the importance of microeconomic and
macroeconomic forecasting; business analytics, modeling
and simulation; risk management; and, decision making
under uncertainty.

1
The New Math: Solving the equation for disruption to the
U.S. electric power industry, Deloitte, 2014
2
Beyond the math: Preparing for disruption and innovation in the
U.S. electric power industry, Deloitte, 2013

2
Industry trends affecting
power and utilities companies

Changing face of electric regulation of the bulk electric system. However, for many utilities
Utilities continue to deal with regulatory uncertainty. The RAI affects specific elements within their compliance
Dodd-Frank Wall Street Reform and Consumer Protection environment, including internal controls, process
Act (Dodd-Frank Act) requires companies to report energy documentation and communications and training.
swaps to the U.S. Commodity Futures Trading Commission
(CFTC), subjecting utilities to new record keeping, reporting Companies with operations that go across NERCs eight
and clearing requirements. regional entities can be challenged due to variations in
how enforcement staff interpret and apply rules from one
Most energy companies have never dealt with the CFTC region to another. For those, RAI can serve as a common
before. Similarly, the CFTC does not have much prior reference point to help in developing programs with a
experience with how utilities operate and are organized, similar risk-based approach.3
posing an additional challenge to companies are they try
to comply with the new rules and CFTC inquiries. This An environment of regulatory certainty, where the
challenge can be overcome by establishing clear processes risks and rewards of strategic alternatives and related
with roles and responsibilities, including a general sense of investments can be analyzed, will need to exist in order for
which matters can be handled internally, and which ones the U.S. electric sector to smoothly transition to new ways
are serious enough to require outside expertise and counsel. of doing business. The concept of regulatory certainty
comes with the expectation of objective regulatory
The Federal Energy Regulatory Commission (FERC) has monitoring and evaluation of future outcomes, with
become more attentive to cross-market hedging trades, as realignment as required.4
has the CFTC. Both regulators are concerned that energy
companies involved with both physical and financial
trading could possibly manipulate prices in either markets.
Client case studies
Despite the availability of much guidance on these issues,
many in the industry still view it as broad and unclear, Customer information migration to achieve
leaving considerable room for interpretation. regulatory compliance
Deloitte had been engaged by the electric utility to
Improved transaction monitoring can help energy implement the SAP Customer Relationship & Billing
companies avoid headaches without requiring a platform, replacing their Customer Information
huge investment of time and resources. Relatively simple System. We were subsequently engaged to convert
screens for monitoring and surveillance can identify risky a series of legacy databases maintained on the
transactions that might create problems with regulators. same mainframe to a new storage medium that
allowed for analysis of long-term business needs,
Finally, the North American Electric Reliability Corporation such as rate-cases and that would be accessible to
(NERC) has increased enforcement of the electric grid a variety of end users.
specifically addressing maintenance of the reliability
of the physical electric grid and cybersecurity, or critical Deloitte built a custom data warehousing
infrastructure protection (CIP), which has been through solution that retained and provided access to
significant revisions. NERCs new risk-based approach, legacy data for regulatory purposes post the SAP
Reliability Assurance Initiative (RAI), can help focus implementation.
companies and regulators on the most vulnerable areas

3
Forward Look: Top regulatory trends for 2014 in energy, Deloitte, 2013
4
The New Math: Solving the equation for disruption to the U.S. electric power industry, Deloitte, 2014

Serving the Power & Utilities Industry What you face, how we help 3
M&A: A focus on core competency
M&A continues to be a compelling strategic option for Client case studies
the power and utilities industry.. Domestic and foreign
Acquisition planning and merger integration for large, integrated
investors are being driven by the challenge of finding
electric utility
growth, reducing costs, and improving the balance sheet
Deloitte assisted one of the nations largest utilities to acquire and integrate
in a time when opportunities for growth in native service
multiple regulated and unregulated businesses into their ongoing operations.
territories are limited, yet large investments for reliability,
Deloitte worked with this client since 1985, during which time the company grew
technology, transmission, and generation loom on the
by almost 1,000%.
horizon. Also, some deals are driven by power and utility
companies reconfiguring their business portfolios to change The scope of this work included:
their mix of regulated and unregulated revenues; rebalance Assessing As-Is states of business processes and systems of the
their fuel and commodity market risk; and, add capabilities merging entities
and/or scale to key pieces of their business. As companies Developing business process and integration requirements considering
rebalance, carve-outs and piecemeal acquisitions are more the diverse needs of the constituent businesses, optimizing shared and
common, with a focus on core assets. distributed functions
Analyzing options developing business cases to determine the nature, timing,
Another main driver is the desire to maintain a balanced and scope of any business and systems integration
generation portfolio both by utilities and state utility Developing interim and longer term integration and systems migration plans
commissions. If tax policies and financing structures remain Developing, planning, and delivering training to migrate all employees from
status quo, utilities are anticipated to be the main acquirers existing to new business processes and systems
of renewable capacity. With EPA regulations causing Assisting with implementation, as appropriate, to achieve business synergies,
companies to choose to retire older coal-fired plants, a including full-suite SAP, and shared services implementations
megawatts void may be avoided with emissions-free
renewables. Although natural gas may currently appear to Post-merger integration support for a power generation company
be the fuel of choice for coal replacement, over the long Working closely with both sides of the transaction the international acquirer
run prices will likely rise due to increased demand and and the domestic (U.S.) target Deloitte provided project management office
higher production costs.5 (PMO) assistance and advisory services on specific areas of the client organization
information technology (IT), human resources (HR), tax, finance and treasury,
Additional M&A trends that are evolving include a shift control, administration, purchasing and insurance, legal, communications, and
in the desired ultimate outcome from state regulators operations/networks.
and desire to increase revenue. The cause no harm edict
has been replaced with a net benefit to the public edict Large California-based Electric Utility
where future M&A deals are likely to be judged on the Deloitte MarketPoint LLC has maintained a working relationship with the commercial
benefits brought to the consumer as well to help states side of the utility for more than five years. Their commercial trading and marketing
meet their new goals of increased renewable energy team employs MarketBuilder to value and price structured transactions in both the
usage and reduction of GHG emissions. In fragmented near and long-term time horizons. The broad nature of the relationship has given
electricity markets, reaching a certain scale may allow Deloitte MarketPoint the opportunity to develop outside the box scenarios that the
merged entities to provide more service offerings and utility can then test against actual performance.
spread new technologies that create cost savings on to a
larger base of consumers.

5
U.S. Renewable M&A Powers On,
Deloitte Center for Energy Solutions, 2013

4
Diversification is key the safe, reliable, affordable and environmentally
Natural gas has led the story on power generation responsible electricity expected from consumers.
supply for the past several years and although important,
fuel diversity is still the objective for utilities. Fuel Client case studies
diversity helps to protect electric companies and their
customers from contingencies such as fuel unavailability, Market analysis for new power plants in western U.S.
fuel price fluctuations, and changes in regulatory A major U.S. power company asked Altos (now Deloitte MarketPoint LLC) to provide
practices that can drive up the cost of a particular fuel.6 third-party market analysis to support ongoing decisions about building additional
plants. The analysis helped the company to successfully finance three projects in
Fuel diversity also helps to ensure stability and reliability the western U.S., all ultra- modern gas combined cycle projects. The company used
in electricity supply and strengthens national security. MarketPoint to analyze its markets to understand Electric Reliability Council of Texas
(ERCOT) and Western System Coordinating Council (WSCC).
In terms of new utility-scale generating capacity, natural
Fundamental market analysis for power plant development in southeastern U.S.
gas-fired power plants accounted for just over 50%
A large U.S. utility company wanted to understand the fundamental economics of
added in 2013, with coal providing 11% and wind nearly
developing power plants at sites in a southeastern state, both contiguous to the
8%.7 Overall, these sources generated 30%, 37% and
interstate gas pipeline system running through the state and, more importantly to the
3% of all electricity in the U.S. in 2012, respectively.
company, not contiguous to the interstate system but downstream from its distribution
Nuclear power was used to generate about 19% of all
system. The utility wanted Altos (now Deloitte MarketPoint LLC) to identify and
U.S. electricity in 2012.8
quantify electrically advantaged nodes throughout the state, recognizing that those
that are contiguous to interstate gas systems were probably already taken. MarketPoint
Continuing the trend of the past few years of strong
built a detailed nodal model of the states electric generation, transmission, and
growth, solar added nearly 22%, a jump from less than
consumption system to guide the utilitys electric plant development decisions.
6% in 2012, with nearly 75% of the capacity added
located in California.9
Valuation for a North American nuclear development company
A North American nuclear development company asked Deloitte MarketPoint LLC
And according to the Solar Energy Industries Association
to provide a fundamental market analysis in the Electric Reliability Council of Texas
(SEIA), 4,751 MW of new photovoltaic (PV) capacity was
(ERCOT) region to help them better understand potential market opportunities given
installed in 2013, representing a 41 percent increase in
alternative future regulatory, cost, and fuel demand regimes. The analysis helped
deployment over installation levels in 2012, with the
the client to understand the potential impact of these alternatives to provide a
utility market led the charge again with 2,847 MW of
valuation of nuclear assets in the region.
PV and 410 MW of Concentrating Solar Power (CSP)
installed in 2013.10
6
EEI Fuel Diversity
The generation mix shifts on many different factors, 7
Today in Energy, Half of power plant capacity additions in 2013 came from natural gas,
including federal and state regulatory initiatives, Energy Information Administration (EIA), April 8, 2014
8
EIA, Electricity in the United States, accessed April 16, 2014
demand, economics and social and political factors. 9
Today in Energy, Half of power plant capacity additions in 2013 came from natural gas, Energy Informa-
Utilities must keep their options open in order to provide tion Administration (EIA), April 8, 2014
10
Solar Energy Industries Association, Solar Industry Data Accessed April 16, 2014

Deloitte has been increasingly developing cross-service line or integrated

services such as governance and risk management, finance transformation,
IT strategy and transformation, analytics, sustainability and climate
change, and M&A, which allows the firm to address complex problems
transcending service lines.
Source: Kennedy Consulting Research & Advisory; Europe Consulting Marketplace 2011-2014; Kennedy Information, LLC
Serving the Power & Utilities Industry What you face, how we help 5
Technology and innovation drives performance
in smart utilities: Data analytics to the rescue Client case studies
The unprecedented explosion of data available from
Smart grid strategy to future-proof investment
smart meter and smart grid programs, combined with
When the director of smart programs for an electric company realized that the
increasingly complex data retention requirements from
business lacked the number and depth of resources required to develop an
regulators, and a changing competitive landscape, create
Advanced Metering Infrastructure (AMI) strategy, they turned to experienced
a perfect storm in utilities for information management
smart grid practitioners from Deloitte.
(IM). Like companies in other industries, transmission and
distribution companies face challenges and opportunities
Deloitte strategy and vendor evaluations helped the business mitigate the crippling
in the Internet age. Advanced analytics in the form of
expense of trial and error, while enabling the company to better future-proof its
in-memory database technology combined with smart
overall $400 million smart grid design. With a solid strategy and solutions roadmap,
data is boosting efficiency, saving money, ensuring
the company is on track to deliver improved operational performance, increase
reliability and providing better service to customers.11
customer satisfaction, and ensure a favorable regulatory rate of return.

As utilities collect vast amounts of useful data, they have

Making customer data useful
an opportunity to uncover new customer usage patterns,
A large U.S. utility engaged Deloitte to drive many aspects of their smart grid
to better forecast demand, to manage energy constraints
program, with data analytics being a key area of focus from the start.
more effectively, to improve compliance with regulatory
requests, to prevent fraud and reduce loss, and to enhance
Deloitte leveraged deep implementation experience and involvement in industry
customer service. The ability to measure and analyze data
standards groups to aid in developing data and reporting requirements, data
about electricity distribution and consumption in near
modeling, and interface design between smart grid applications and back office
real-time can unearth previously unavailable information
systems. Additionally, Deloittes technology strategy and security teams performed
on customers consumption patterns, preferences, and
assessments focused on securing the data, and selecting tools to correlate the data
decisions. Leading companies will use advanced analytics
in real time to provide optimal and reliable feedback to the business.
and social media scraping to determine which messages
and social media tools to use for each segment of their
Collecting the data is only the first step, making that data useful requires strategic
customer base.12 With this information, utilities can better
planning, a deep understanding of the targeted benefits, and extensive experience.
segment their customers on the basis of their decisions to
conserve or consume electricity.

11
John McCue, 2014 Outlook on Power and Utilities My Take: By John McCue, December 2013
12
Getting Smart Grid customers plugged in: Motivating change through mobile and social technologies, Deloitte, 2013

Deloitte is heavily investing in analytics and plans to embed analytics

offerings throughout all service areas on a global basis. In order to take
analytics to market, the firm has formed a Center of Excellence called
the Deloitte Analytics Institute (DAI). The DAI enables employees to
share and leverage thought leadership, methods, tools, and solutions
around the globe.
Source: Kennedy Consulting Research & Advisory; Information Management & Analytics 2010-2013; BNA Subsidiaries, LLC

6
Disruption: Were not in Kansas anymore, Toto
As the power and utilities industry heads into a period Client case studies
of transformation, power, gas and water companies Social media integral tool for increasing energy management and efficiency
are poised to benefit from a wave of technological A wholesale power marketer sought to develop future energy efficiency delivery
advancements that can positively affect results across the models. Deloitte collaborated with the client to create non-incentive-based consumer
energy value chain.13 adoption strategies aimed at decreasing power consumption, incorporating social
media/marketing, and benchmarking concepts.
Natural gas has become a key baseload fuel for electric
power companies due to its low prices and lower U.S. Federal Government Agency
emissions profile. To keep availability high and prices low, Deloitte assisted the agency to develop an energy strategy and a portfolio optimization
shale production advancements have already boosted decision model that quantified each type of strategic value of their initiatives.
drilling efficiencies significantly. Further advancements, Additionally, Deloitte assisted in prioritizing energy investments within a constrained
such as rock physics, new seismic software, and data budget environment. The valuation methodology used for quantifying and integrating
analytics of lessons learned promise to continue flattening both direct and indirect benefits was Multi-Attribute Decision Analysis (MADA).
the cost curve.14
The process of developing a MADA prioritization framework involved extensive
A variety of disruptive technologies have emerged to workshops and interviews with a broad set of stakeholders in order to develop a
compete with utility-provided services PV, battery robust prioritization approach, and maximize engagement from diverse stakeholders
storage, fuel cells, geothermal energy systems, wind, ranging from project managers in the field, regional supervisors, national executive
micro turbines and electric vehicle enhanced storage. In leaders, and representatives from external organizations.
addition, energy efficiency and demand-side management
technologies (DSM) also promote reduced utility revenues In addition, Deloitte assisted the client by:
while potentially causing the utility to incur implementation Analyzing their energy reduction and renewable energy targets to determine
costs. This combination of technologies can be the catalyst the feasibility of achieving the targets within the proposed time frames.
for actions that include closer alignment with all regulatory Gathering and integrating facility-level and energy consumption data for
bodies, capital expenditure evaluation tools and the the first time at both the enterprise and installation level.
evaluation of new business models and services that can Conducting market research of energy efficient building technologies and
be provided by electric utilities to recover lost margin while renewable energy technologies.
providing a valuable customer service.15 Developing an investment timeline to meet the agencys goals and targets.

The quality of project proposals improved dramatically. The combination of a

As utilities strive to continue their pace of investment,
robust decision tool customized to the agencys strategy, combined with a training
while experiencing moderating demand and decreasing
and change management program, helped project managers and planners better
revenues, they can look forward to the advancement of
understand how to design their projects to create better value for the organization.
nano-engineered materials that can create tremendous
efficiencies across the energy value chain. Nanotechnology
can improve electricity generation in wind turbine design as
91% of companies say they have invested funds in energy management
well as can reduce the size, while enhancing the efficiency
programs over the past three years, with these funds representing about
of solar panels. In five to ten years, smaller, faster and
12% of their total capital budgets regardless of company size
cheaper nanosensors will help utilities detect operations
issues in advance by monitoring current and voltage along 2014 Deloitte reSources Study
the grid thus detecting the condition of underground
cables and evaluating transformers and other equipment. 13
John McCue, 2014 Outlook on Power and Utilities My Take: By John McCue, December 2013
Nanotechnology can also be a game-changer in helping to 14
Ibid
15
Peter Kind, Energy Infrastructure Advocates for EEI Disruptive Challenges: Financial Implications and
mitigate renewables intermittency by efficiently increasing Strategic Responses to a Changing Retail Electric Business, January 2013
batteries storage capacity.16 16
John McCue, 2014 Outlook on Power and Utilities My Take: By John McCue, December 2013

Serving the Power & Utilities Industry What you face, how we help 7
Renewable and clean energy Alternative may
not apply soon Client case studies
Despite unexpected obstacles, strong demand for
Global expansion optimization financial analysis and negotiations
renewable energy is propelling the industry forward,
With several customers currently constructing solar thermal power plants in the
suggesting alternative energy has possibly entered
U.S., the client was planning to expand its manufacturing footprint to enter the
mainstream thinking as a viable energy supply source.
North American market. The client engaged Deloitte to assist in developing a
Several market and policy trends have created a strong
pro-forma financial model for its business plan, selecting a preferred location for its
demand-pull for renewable energy. And surprising some,
manufacturing operations, and negotiating real estate and government incentives.
relatively strong M&A has driven further growth, despite
uncertain federal incentives and policy. The Deloitte team developed a detailed pro-forma analysis to model a multiphase,
$100 million investment and compared three candidate locations based on a variety
State policy has emerged as a powerful ally for renewable of factors including labor, logistics, tax, incentives, and utilities. In addition,
energy, due to the demand created to comply with Deloitte developed the strategy and led negotiation for government incentives, land,
Renewable Portfolio Standards (RPS) as well as their desire infrastructure, and favorable tax treatment.
for a diversified power portfolio. In addition to tax credits
and grants, property tax incentives, and feed-in-tariff Business process and technology assessment and marketing strategy for a
policies, some states are employing Renewable Energy biodiesel producer
Credit (REC) essentially establishing a trading system Deloitte conducted an analysis of the producers business processes and supporting
allowing businesses and other large energy consumer to technology systems and provided a detailed report of renewable energy markets,
meet their environmental goals. Green banks are making business process analysis, and the translation between business requirements and
clean energy investments more affordable by providing supporting technology capabilities. Deloitte also developed a marketing strategy for
low-cost financing for renewable energy projects. the client to compete in the growing marketplace, and provided them with industry
and regulatory insights.
New financing mechanisms are being considered in order
to attract new sources of capital, simplify deal structures
and reduce the cost of financing renewable energy
projects. Among them are Real Estate Investment Trusts
(REIT) which will require a Congressional action or These advantages from the states and new possible
Internal Revenue Service broad ruling clarifying renewable financing models alleviate the pressure from the shale
energy assets are real property for REIT purposes. One gas revolution. Although it could be expected that as
financing option gaining traction is the securitization of Environmental Protection Agency (EPA) regulations force
alternative energy projects, supported by The National the shut-down of aging coal-fired plants, they will be
Renewable Energy Laboratory the solar developer replaced with natural-gas fired plants the choice may
and/or leasing company issues asset-backed securities, not be so clear cut. Clean energy fulfills many needs
which are then serviced by the revenue streams from the it ensures a diversified energy portfolio that mitigate
completed installation. The YieldCo is another new the risk associated with any one technology, offsets
method of raising capital in the renewable space due potential for rise in natural gas prices and responds to
to several advantages that include how it can be used consumer demands for green energy. Innovation has
with pure-play renewables or mixed with conventional made this even more achievable through co-location
generation assets, thus providing greater flexibility in and hybridization, whereby conventional fuels and
balancing tax liabilities with tax benefits. renewables can be used together.17

10
Alternative Energy Trends: Identifying opportunities, meeting challenges,
delivering solution, Deloitte Center for Energy Solutions, September 2013)

8
Serving the Power & Utilities Industry What you face, how we help 9
No industry affects
economic livelihood,
societal functioning,
and quality of life like
the energy industry.
Client base and
market share

Deloittes Power & Utilities practice*

Serves all of the top 10 and 96% of the Fortune 1000
power and utilities companies
Deloitte helps power and utilities clients Audits six of the top 10 Fortune 1000 power and
utilities companies
address critical challenges and execute Provides accounting and enterprise risk services to 79%

initiatives designed to further their of the Fortune 1000 power & utilities companies
Provides consulting services to 83% of power and
strategic objectives, and deliver value for utilities companies on the Fortune 1000
Provides tax services to 85% of power and utilities on
their shareholders. the Fortune 1000
Provides financial advisory services to 68% of the
Fortune 1000 power and utilities companies

*Fortune statistics are from the 2014

Fortune report, covering 2013 data.

Serving the Power & Utilities Industry What you face, how we help 11
 Slam the door on cyber security breaches

www.deloitte.com/energysolutions

Deloitte Center for Energy Solutions

Copyright 2013 Deloitte Development LLC. All rights reserved.

Member of Deloitte Touche Tohmatsu Limited
Deloitte is a thought leader in the
Power & Utilities sector
Deloitte regularly publishes research and analysis that presents unique
points of view and challenges our clients thinking.
Evaluating M&A through a changing U.S. Renewable M&A Sees Warming Trend:
utility lens: A fresh look at M&As role Deal making heats up amid rapid growth in
in power and utilities distributed solar generation and strong wind
Marketplace dynamics are transforming the power development pipeline
and utilities industry, reshaping business models and This report provides an overview of 2013 U.S. renewable
prompting companies to re-evaluate their strategies. M&A activity and drivers, policy and market developments,
As the lens through which power and utility and an outlook for 2014 and beyond.
companies view their strategic options shifts, merger
and acquisition stands out as one of the more Alternative Energy Trends: Identifying opportunities,
compelling and expedient strategies for delivering meeting challenges, delivering solutions
value and managing strategic risks to the business. This latest report provides a view of the top ten alternative
energy trends, as well as an overview of how Deloitte
The New Math: Solving the equation for can help alternative energy companies meet the current
disruption to the U.S. electric power industry challenges of this evolving industry.
Third in the series, the final paper examines the
fundamental shifts already occurring in the electric Getting Smart Grid Customers Plugged In: Motivating
industrys license to do business. change through mobile and social technology
This paper provides a framework to help utilities assess the
maturity of their current customer engagement strategies
Beyond the Math: Preparing for disruption and on Smart Grid and outlines opportunities to integrate new
innovation in the U.S. electric power industry technologies that can bring meaningful customer data to the
Second in the Math paper series, this paper explores engagement effort.
the five dimensions of change in the electric power
industry
Technical Publications and Programs
so stakeholders can determine if, when, and how to
Annual Power & Utilities Accounting, Financial Reporting and Tax Update
pursue transforming their business models. Summary of selected accounting and financial reporting developments specific
to the energy industry, intended for a general audience of financial professionals,
The Math Does Not Lie: Factoring the future including chief financial officers, controllers, and accounting/tax professionals.
of the U.S. electric power industry
Regulated Utilities Manual
The first paper in a series on helping companies
Assists the accountant familiar with accounting for businesses in general in
explore the rapidly changing U.S. electric power
applying that training to the specialized accounting practices of public utilities.
landscape, provides a straightforward approach to
Emphasis on the electric industry, but the principles are also applicable to the gas,
examining the future of the industry through a simple water, wastewater, and telecommunications industries.
framework using a mathematical equation.
Power & Utilities Quarterly Accounting Update
Deloitte reSources 2014 Study Focuses on accounting, tax, and regulatory developments affecting the energy
industry. Includes developments from the Financial Accounting Standards Board,
Deloitte, with strategy and market research firm
Emerging Issues Task Force, Federal Energy Regulatory Commission, and Securities
Harrison Group, a YouGov Company, completed its
and Exchange Commission, as well as utility tax developments.
fourth annual nationwide reSources Study, which
provides insights that can help organizations make
energy-related investment and business decisions. The
2014 Study illuminates the mindsets and behaviors of
U.S. electricity customers from both the consumer
and business perspective.

Serving the Power & Utilities Industry What you face, how we help 13
Deloitte delivers renowned industry
conferences and actively participates
in industry events
Conferences and Seminars
Deloitte Energy Conference
Dedicated to providing clients and the energy industry with insights on
emerging topics, Deloitte brings together energy executives, researchers,
entrepreneurs, investors, and regulators from around the globe for an
in-depth analysis of key developments and challenges facing todays global
and domestic energy markets at its annual Energy Conference.

Deloitte Alternative Energy Seminar

The Deloitte Alternative Energy seminar examines the future of alternative
energy. Discussions at the seminar underscore the growing role alternative
energy must play if America is to address climate change and energy security.

Deloitte Oil & Gas Conference

Committed to providing clients and the oil and gas industry with insights on
timely topics, Deloitte offers this annual conference for oil and gas executives Dbriefs live webcasts
and leading industry experts to share their views on important issues facing
the global oil and gas industry. Staying on top of the latest issues and strategies in the energy
industry is a challenge, so we offer Dbriefs, live webcasts from our
Deloitte Energy Accounting, Financial Reporting, and Tax Update Energy & Resources practice, offering valuable insight into important
At this one-day seminar, Deloittes energy specialists focus on industry technical developments affecting your business.
accounting and tax issues to assist participants in preparing for calendar year-
end accounting, reporting, and tax requirements. Participants may choose How to join Dbriefs
either an Accounting and Financial Reporting Update or a Tax Update. 1. Visit www.deloitte.com/us/dbriefs.
2. Click on Join Dbriefs in the right-hand column.
Deloitte Energy Transacting Accounting 3. Enter your profile information.
At this one-day seminar, Deloittes energy specialists provide participants with 4. Using the menus, select the webcast series you wish to view.
an overview of complex accounting and valuation considerations associated 5. Submit your profile
with transactions in existing and evolving energy and commodity markets.
The course provides an overview of current market dynamics, trends, and risk
factors present in todays energy markets. Associations
Deloitte practitioners are members of and/or participants in the
Utility Industry Book/Tax Differences following associations:
This seminar compares and contrasts the federal income tax rules and the
American Council on Renewable Energy
rules for financial and regulatory accounting purposes related to revenue and
expense recognition, capitalization, and depreciation. American Gas Association
American Wind Energy Association
Accounting for Income Taxes: Rate-Regulated Utilities
Edison Electric Institute
This seminar reviews the specific issues in applying Income Taxes, Topic 740,
to rate-regulated utilities. The course explains the issues and exceptions Electric Power Supply Association
under Regulated Operations, Topic 980, including flowthrough accounting National Association of Regulatory Utility Commissioners
and changes in tax rates, and includes examples involving computations United States Energy Association
and journal entries related to flow-through accounting, excess deferred
Womens Council on Energy and the Environment
income taxes, and investment tax credits. The Internal Revenue Services
normalization requirements are also summarized. Womens Energy Network

14
Services offered through the
Deloitte U.S. firms
Deloitte offers clients a broad range of fully integrated services in
areas that include accounting, assurance and advisory, risk, tax, and
management, financial, technology, and human capital consulting.
Please visit our website, www.deloitte.com, to learn more about our thinking and approach to business issues.

Deloitte & Touche LLP Deloitte Consulting LLP Deloitte Financial Advisory Services LLP
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taking a Risk Intelligent approach to managing Deloitte Consulting LLP helps our clients look at controversy and conflict, executing deals,
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Business Tax Services utility, resource and commodity companies to Geospatial analysis
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to In-House Modeling
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Serving the Power & Utilities Industry What you face, how we help 15
 The Deloitte Center for Energy
Solutions provides a forum for
innovation, thought leadership,
groundbreaking research, and
industry collaboration to help
companies solve the most complex
energy challenges.

16
Deloittes Power & Utilities
industry leadership and specialists
U.S. Leadership

John McCue Clint Carlin Bill Graf Brad Seltzer Reid Miller Joseph Zenk
Vice Chairman & National Enterprise Risk Services Leader Audit and Assurance Leader Tax Leader Consulting Leader Financial Advisory Services
Managing Partner, Power & Utilities Power & Utilities Energy & Resources Power & Utilities Leader Power & Utilities
Energy & Resources Deloitte & Touche LLP Deloitte & Touche LLP Deloitte Tax LLP Deloitte Consulting LLP Deloitte Transactions and
U.S. Power & Utilities Leader +1 713 982 2840 +1 312 486 2673 +1 714 913 1531 +1 612 397 4156 Business Analytics LLP
Deloitte LLP [email protected] [email protected] [email protected] [email protected] +1 412 338 7844
+1 216 830 6606 [email protected]
[email protected]

Greg Aliff Brian Boufarah Paul Campbell Brad Denny Andrew Fike Steven Livingston
Vice Chairman & Senior Partner Partner, Mergers & Acquisitions Principal, Enterprise Risk Services Principal, Human Capital Partner, Commodity Trading Principal, Security & Privacy
Energy & Natural Resources Deloitte & Touche LLP Deloitte & Touche LLP Deloitte Consulting LLP and Risk Management Deloitte & Touche LLP
Management + 1 212 436 6997 +1 713 982 4156 +1 312 486 4777 Deloitte & Touche LLP +1 206 716 7539
Deloitte LLP [email protected] [email protected] [email protected] +1 713 982 2918 [email protected]
+1 703 251 4380 [email protected]
[email protected]

Marlene Motyka Brian Murrell Sampat Prakash Jim Thomson David Yankee
Principal, U.S. Alternative Partner, International Financial Principal, Consulting Leader Principal, Smart Grid Partner, Power & Utilities
Energy Leader Reporting Standards Energy & Resources Deloitte Consulting LLP Deloitte Tax LLP
Deloitte Transactions and Deloitte & Touche LLP Deloitte Consulting LLP +1 404 631 3302 +1 312 486 9842
Business Analytics LLP +1 212 436 4805 +1 713 982 2723 [email protected] [email protected]
+ 1 212 436 5605 [email protected] [email protected]
[email protected]

Serving the Power & Utilities Industry What you face, how we help 17
 Deloitte Center
for Energy Solutions
About the Deloitte Center for Energy Solutions
The Deloitte Center for Energy Solutions (the Center) provides a forum for innovation, thought leadership, ground-
breaking research, and industry collaboration to help companies solve the most complex energy challenges.

Through the Center, Deloitte's Energy & Resources Group leads the debate on critical topics on the minds of execu-
tives from the impact of legislative and regulatory policy, to operational efficiency, to sustainable and profitable
growth. We provide comprehensive solutions through a global network of specialists and thought leaders.

With locations in Houston and Washington, DC, the Deloitte Center for Energy Solutions offers interaction through
seminars, roundtables, and other forms of engagement, where established and growing companies can come
together to learn, discuss, and debate.

www.deloitte.com/energysolutions

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