PUBLIC AND PRIVATE UTILITIES

A number of utilities look to La Capra Associates to conduct specialized studies and provide services that extend their internal planning capabilities. We serve utility clients with a range of ownership structures (investor-owned, municipal, and cooperatively-owned) and business structures (electric and gas transmission and distribution companies, and vertically integrated electric utilities).

Our services for these clients range from market price forecasts and market risk assessments to asset valuation, integrated resource planning, and litigation support. Primary areas of focus include:

• > Power Systems and Integrated Resource Planning
• > Competitive Bidding for Power Supplies and Generation Assets
• > Cost Allocation and Rate Design

WHO WE SERVE

Green Mountain Power Corporation
In 2003 and early 2004, La Capra Associates provided consulting services to GMP in support of a 20-year IRP for submission to the Vermont Public Service Board. La Capra's specific services to GMP included an examination of potential power portfolios to meet GMP's needs over the next 20 years, including renewable and conventional resources and forward contracts, and an evaluation of the relative economic and risk characteristics of each portfolio.

Market risks were assessed using a combination of scenario and sensitivity analyses. Projecting the power market’s characteristics over 20 years entailed analyzing and projecting the underlying market drivers, including: electric load, generation supply, generation retirements, transmission expansions, and fuel prices. We characterized the uncertainty surrounding critical power market variables, such as load, fuel prices and the carrying costs of new generation.

Groton Utilities/Bozrah Light and Power
We were hired by Groton Utilities to develop unbundled rates that could be charged for separate services by allocating costs to customer classes. The utility board accepted our recommendations. In addition, we designed standby and exit rates for the utility and performed the same function for Bozrah Light and Power, which is a subsidiary of Groton Utilities.

New Brunswick Power Distribution and Customer Service Corporation
We reviewed NB Power Distribution’s proposed increase to its fuel component for its 2006 Fiscal Year Budget. We examined the input assumptions and modeling approach used by the Company.

Our goal was to ensure that the approach used to develop power cost estimates is consistent with the Power Purchase Agreements (PPA) under which NB Power Distribution receives its supply, and to determine the key sources of variance from the previous budget. The fuel component relies on a detailed simulation of the New Brunswick power generation system dispatch (using the PROMOD simulation model). The Company was required to have this independent evaluation performed for reasonableness of its proposed budget increase.

Plattsburgh Municipal Lighting Department
For over ten years, we have been the lead consultant to the PMLD on cost allocation and rate design. We have prepared rates and presented them to the system regulator (New York Power Authority) for approval. We have also assisted the PMLD with major financing issues and with power purchase issues.

Vermont Electric Power Company
La Capra Associates prepared an assessment of generation supply and demand-side alternatives to a proposed transmission expansion on behalf of VELCO, the Vermont transmission utility. The study was part of VELCO’s 2003 transmission line siting application. This work assessed the economics and the technical feasibility of implementing a full range of power supply and demand-side alternatives, including large generators, distributed generation, renewables, and demand side management programs.

As part of this effort, we developed pro forma financials to determine the total revenue requirements associated with each technology. The study also included specific consideration of fuel supply availability, transmission system design and reliability issues, siting and regulatory issues, and project financing, among others. La Capra’s analysis compared the capital costs, production costs, air emissions and reliability associated with potential resource plans based on transmission, generation, and demand-side investments.

In 2004, we updated the study and provided testimony concerning the analysis. In 2005, La Capra provided an additional update to reflect the current situation.

Washington Electric Cooperative
Since 1997, La Capra Associates has served as primary advisor to Washington Electric Cooperative in Vermont. In this role, La Capra has managed the Cooperative's power supply portfolio, conducted power and hedging transactions on WEC's behalf in the New England wholesale market, provided budget analyses, and advised WEC in its bid strategy for acquiring a small hydroelectric facility. We have also developed WEC's cost of service and rates; this work was supported with prepared testimony for recent retail rate proceedings.

La Capra has helped WEC develop its own renewable power projects, including a 5 MW landfill gas-to-energy generation facility in Coventry, Vermont. Our team was responsible for project planning and portfolio fit, economics, transmission planning, support for federal financing and economic support for necessary regulatory approvals. This project came on-line in 2005. La Capra continues to assist WEC with assessment, development, and ownership/financing analyses of other landfill methane and wind projects.

We authored WEC's 2003 integrated resource plan, based on portfolio management principles. Our plan provided the necessary support for WEC's successful receipt of $7.3 million in federal financing and Vermont Public Service Board and Public Service Department regulatory approvals for the Coventry Project. In addition, La Capra Associates negotiated contracts for and helped WEC market approximately $1 million in renewable energy certificate sales from its entitlements and projects.