Value power assets quickly and accurately.
Join us for two full days of comprehensive training, providing the skills you need to quickly and accurately value individual U.S. power sector assets and whole companies. The valuation methods you'll learn are specific to the industry, so you can apply these principles immediately in your day-to-day efforts.
You will learn by doing – studying real world case studies, rather than getting mired in theoretical abstractions. You will also take home time-tested model templates that will save you effort as you apply these techniques yourself.
This seminar features Excel based analysis, participants will need to bring a laptop computer with access to Microsoft Excel and a calculator.
What You Will Learn
- Create more accurate valuations by applying the standard valuation methods, including DCF, comparable analysis, and multiple analysis
- See how to get the data that is used in standard modeling assumptions
- Learn how to incorporate market based revenue and cost drivers, including forward and spot pricing and implied heat rates to develop more relevant, robust valuations
- Discuss the role of PPAs, tolling agreements, steam contracts, and other financial arrangements that affect the value of a deal
- Gain invaluable real world insight from a seasoned, world class instructor with decades of transaction experience in the power sector
- Practice using take-home models that value single plants, T&D assets, regulated generation assets and whole companies so you can apply the principles you’ve learned immediately upon your return to work
our Instructor
James W. Bowen
Jim Bowen is President of Momentum Development Corporation, which provides advisory and management services to clients in the energy sector, including banks, investment funds, and principal investors. He has been an instructor for SNL Center for Financial Education for more than two years.
As a veteran consultant in the energy industry, he has valued hundreds of power plants, integrated utilities, transmission and distribution systems, power purchase agreements, tolling agreements, options, and midstream and downstream energy assets.
Jim regularly taught in-house for McKinsey & Company, and was an adjunct faculty member at the U.S. Military Academy at West Point. Prior to founding Momentum Development, Jim was a consultant with McKinsey, a litigation attorney with Akin, Gump, Strauss, Hauer & Feld LLP, and an officer in the U.S. Army.
He holds a J.D., cum laude, from the Harvard Law School, an M.Sc. in Financial Management from the University of London, and a B.S. in Economics from the U.S. Military Academy.
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Seminar Agenda
Day One
7:45 am
Registration and Continental Breakfast Open8:30 am
Introduction and Overview9:00 am
Valuation of a Single Plant- Discounted cash flow modeling of power assets
- Revenue drivers, including forward strips vs. predicted spot prices; implied heat rates
- Plant costs, including fixed costs, depreciation and fired hour costs; other non-cash items; application of initial and ongoing capital expenditures
- Calculating terminal value and computing discount rates
10:30 am
Refreshment Break10:45 am
Case Study: Discounted Cash Flow (DCF) Models12:00 pm
Lunch1:00 pm
Valuing Power Purchase Agreements (PPAs) and Tolling Agreements- Understanding PPAs, tolling agreements, steam contracts, and similar financial arrangements
2:00 pm
Other Valuation Techniques: Comparables, Multiples, Real Options- Application and use of transaction and market peer comparables and multiples to single plant valuation
- Real options, including growth, market switching and fuel switching options; and how to apply real options to plant valuation
- How could the plant be used outside of routine operations?
3:30 pm
Refreshment Break3:45 pm
Valuation of other generation assets: Hydro, Nuclear, Coal, Renewables and Peaking Assets- The unique characteristics of each production technology in the asset or company valuation
5:00 pm
Day One ConcludesDay Two
8:00 am
Continental Breakfast Opens8:30 am
Valuation of a Regulated Utility: Discussion- Overview of key valuation techniques, including value drivers, capital structure, and techniques for finding data to be used as inputs for valuation models
10:00 am
Refreshment Break10:15 am
Valuing Transmission and Distribution Businesses and Assets- Regulated rate of return, customer service costs, reliability and operating risk, rate base assets, fuel cost recovery and cost-sharing formulas
11:00 am
Valuing Regulated Generation Assets- Recovery of environmental compliance costs, off-system sales (decoupling) and fuel cost management-sharing formulas
12:00 pm
Lunch1:00 pm
Putting the Pieces Together: Valuing an Integrated UtilityFinancial flows, energy balances, corporate overhead
1:45 pm
Case Study: Testing Models and Assumptions2:45 pm
Refreshment Break3:00 pm
Other Valuation Issues- M&A and Regulatory Environment Considerations
- - Estimating synergies between merged or acquired companies
- - Accounting for regulatory requirements for approval, including impact on valuation of anticipated rate reduction
- Regulatory Value Drivers
- - Including recoverable vs. non-recoverable expenditures, stranded assets, multi-jurisdictional challenges, and allowable rate of return
- Mitigating Risks to Value
- - What are some of the common drivers of volatility in valuations and how can those drivers be mitigated
5:00 pm
Day Two Concludes
Venue
The venue is not yet available for this event.
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Who Should Attend this Seminar
Finance, corporate development/strategy, and investor relations professionals at power and gas companies. Professionals in investment banking, project finance, asset management, hedge funds, or equity-fixed income research. Also,consultants, accountants and lawyers who advise power and gas clients. Current and potential suppliers or professionals looking for an understanding of how Wall Street analyzes the power and gas sector and the fundamentals that bear on their analyses.
Prerequisites and Advance PreparationThis program presumes familiarity with basic accounting and finance concepts. Participants will need to bring a laptop computer equipped with Microsoft Excel.
Program LevelBasic level. This fundamental course begins with basic material and then proceeds to the intermediate level.
Delivery MethodGroup-live.
Hotel and Seminar Information
This two-day seminar will be held at the hotel listed below. The seminar will start promptly at 8:30 AM and will finish at 5:00 PM on the first day. On the second day, the seminar will resume at 8:30 AM and will finish at 5:00 PM. The program includes continental breakfast, lunch and all program work materials. Dress is business casual.
Venue to be announced soon.New York City, NY
Because of the diversity of hotels found in the area, we will not be holding a block of sleeping rooms with one particular hotel.
