CRA’s energy consulting practice helps clients solve and manage the complex challenges facing the industry. Over our 50 year history, we have developed novel approaches and frameworks for evaluating critical client issues in commercial, regulatory, and litigation settings. Clients trust CRA’s established and experienced energy consulting team to develop innovative solutions to their unique challenges.
For more about our services, experience, and team, please click on the links below.
- Corporate and business unit strategy
- The energy sector has grown increasingly complex with rapidly changing technologies around the way that energy is produced, transported, and delivered. CRA works with energy companies to develop coherent corporate and business unit strategies that take advantage of macro and industry trends to meet the company’s unique growth, value, and risk requirements.
- Capital allocation and prioritization
- CRA’s energy consulting team helps utilities build capital investment plans that meet a complex and often competing set of objectives around reliability, risk, cost, and returns. Our proprietary frameworks and models uniquely view allocation decisions through the lens of the customer, regulator, and shareholder. Our work is frequently relied upon by utility executives to inform business and regulatory strategy.
- Advanced integrated resource planning (A-IRP)
- CRA’s energy consulting team has led dozens of resource planning assignments and is helping utilities and generators today respond to an increasingly distributed resource architecture. We deploy a suite of sophisticated proprietary and licensed models, including AuroraXMP, and have developed robust and evolutionary frameworks for evaluating challenging supply and demand-side investment questions. Moreover, we have developed and maintain energy sector planning scenarios which can form a starting point for resource analysis and selection.
- Environmental strategy
- CRA frequently works with utilities, power generators, large customers, trade organization, and others to develop environmental strategies to support their objectives. CRA’s experts are knowledgeable regarding rules and regulations affecting the sector and can advise on how these may present companies unique opportunities and challenges. CRA also runs a proprietary suite of environmental market models that can assess the impact of rules and regulations on the electric, gas, and oil sub-sectors. Recently, CRA has evaluated the impact of the Clean Power Plan, the value of carbon capture and sequestration technologies, and the impact of more aggressive renewable portfolio standards in certain states. For more information on models, see proprietary and licensed models, below.
- Enterprise and portfolio risk management
- CRA energy consultants regularly provide strategic guidance and advisory services to energy asset owners and investors related to valuation of generation assets and storage facilities, commodity contracts, and energy derivatives. CRA experts also provide clients guidance on energy risk management, deal structuring, hedging strategies and portfolio optimization.
- Market entry
- Increasingly investors are seeking exposure to a more geographically diverse portfolio of energy assets. CRA has helped financial and strategic investors identify investment opportunities in markets where they have limited experience. CRA has advised clients on investments in North America, South America, Europe, and in several parts of Asia. Support has included developing a market entry strategy and related due diligence around various asset classes, including natural gas midstream and LDCs, electric utilities, power generation, and electric transmission.
Litigation, regulatory, and expert support
- Litigation support
CRA professionals regularly provide expert-related services in complex legal and regulatory matters involving diverse energy topics. Our experts include PhD economists, mathematicians and statisticians, accounting and finance professionals, and energy industry practitioners who are leading experts in their field. CRA works with inside and outside counsel for energy infrastructure manufacturers, owners, investors, operators, and customers.
- FERC and regulatory agency proceedings
CRA’s experts frequently advise commercial clients on matters involving the FERC, the FTC, and various state regulatory agencies. Our experts understand market structure and market rules, and regularly provide strategic and expert services related to potential electric and gas mergers and their competitive impacts. Our experts also support power generation owners in gaining and maintaining market based rate authority in the increasingly fluid electricity markets.
- International arbitration
CRA’s energy consulting team has extensive expertise in international arbitration assignments in the context of both contractual and treaty claims. We have been engaged by parties involved in some of the most complex, high-profile disputes of recent years. Our experts help clients and counsel assess causation and quantify damages by applying sophisticated modeling and analytical techniques. CRA provides expert testimony in all the major international arbitration forums, including ICC, ICSID, LCIA, and under UNCITRAL rules. We offer broad economic, financial, commercial, market, and regulatory expertise in a wide variety of industries.
Transactions and markets
- Energy market perspectives
- CRA has provided its expert analysis and opinions to clients on the functionality and expected performance of the electricity, gas, and oil markets in the Americas, Europe, and Asia. We combines practical experience with deep market modeling capabilities to offer unique insights to clients. CRA’s market perspectives frequently support client strategy, commercial due diligence, and litigation engagements.
- Capacity market structuring and analysis
- CRA experts have been integral to the development of capacity markets in the US, the UK and now Canada, advising on the appropriate rules and structures to economically maintain a reliable electric grid. In a transactional setting, CRA applies its knowledge of capacity markets to price forecasts and their uncertainty. Our proprietary capacity market models are customized by region to reflect the specific rules and design elements of the formal or bilateral markets to produce robust price forecasts of a revenue element that can be a significant portion of a plant’s expected profitability.
- Commercial due diligence
- CRA’s energy consulting team regularly provides commercial due diligence services to equity and lenders (and rating agencies) in support of energy market transactions. Transactions have involved all types of power plants, electric and gas utilities, gas pipelines, and electric transmission projects. CRA has developed and maintains energy sector planning scenarios, market models, and detailed benchmarking databases upon which to develop asset performance projections.
- Retail choice and distributed generation
- CRA’s energy consulting team has worked with large customers and cities to understand their power supply options. Our experts have detailed knowledge of state retail choice policies and options companies may have to engage marketers, contract directly with renewable energy suppliers, or develop on-site distributed generation. CRA’s services include strategy and planning, feasibility studies, contracting, and regulatory support.
- Renewable and other resource procurement
- CRA’s energy consulting team has worked with utilities, municipalities, state regulators, and large customers on renewable, baseload, default service, and other power solicitations. We help clients develop procurement strategies to meet their unique objectives, structure and execute auctions and RFPs, and support subsequent regulatory activities.
- Market power review
CRA’s experts frequently advise commercial clients on market power issues that may arise in generation acquisitions. Since many energy markets are highly concentrated, screening for potential market power concerns must be a part of the decision process for potential buyers. Whether analyzing multiple acquisition targets or structuring alternative divestiture measures, speed and flexibility are essential for screening successful targets and avoiding unnecessary divestitures.
Proprietary and licensed models
- North American Electricity & Environment Model (NEEM)
- The North American Electricity and Environment Model (NEEM) fills the need for a flexible, partial equilibrium model of the North American electricity market that can simultaneously model both system expansion and environmental compliance over a 30- to 50-year time frame. The model employs detailed unit-level information on all of the generating units in the United States and large portions of Canada. NEEM models the evolution of the North American power system, taking account of demand growth, available generation, environmental technologies, and environmental regulations both present and future. The North American interconnected power system is modeled as a set of regions that are connected by a network of transmission paths.
- Multi-Regional National Model (MRN)
- MRN is a forward-looking, dynamic computable general equilibrium (CGE) model of the United States. It is based on the theoretical concept of an equilibrium in which macro-level outcomes (e.g., consumption and investment) are driven by the decisions of self-interested consumers and producers. MRN is built around a circular flow of good and payments between householders, firms, and the government.
- Natural Gas Fundamentals Model (NGF)
- The Natural Gas Fundamentals (NGF) model prices natural gas at the equilibrium between expected supply and demand, considering resource size, productivity, imports/exports, drilling costs, and value of byproducts, taxes and royalties, and other items. NGF provides a bottom-up forecast of North American gas production with a focus on shale gas supply and other unconventional resources. Key NGF outputs include a long-term price forecast for domestic natural gas, as well as breakeven costs and production data for major gas basins across the United States.
- AuroraXMP Power Markets Model
- CRA deploys the AURORAxmp power market dispatch model for granular asset-level analyses and utility portfolio assessments. AURORA is integrated with our NEEM model to ensure consistency in macro-level market outcomes, but it is capable of performing more detailed power price forecasts, plant-level valuations, and portfolio cost analyses. The dispatch engine is robust and highly flexible, providing our clients with insights on the market, individual power plants, or integrated portfolios across a range of uncertainties.
- CRA Capacity Market Models
- CRA projects capacity prices using our proprietary Capacity Market Models, which are customized by region in order to reflect the specific rules and design elements of the formal or bilateral markets that exist across North America and Europe. CRA’s models are based on fundamental market analyses that specifically represent the administratively-set demand curves, where applicable, along with a supply curve based on unit-level projections of capacity price offers. The unit-level projections are fully integrated with our AURORA model, allowing for robust energy-market scenario analysis, while risks associated with potential capacity performance penalties are assessed on the cost side.
- Integrated Financial Model
- CRA’s Integrated Financial Model (IFM) produces a retail rate forecast, typically in conjunction with the forecasts of production, procurement, capital, and other operating and maintenance costs that come from models like MRN-NEEM, AuroraXMP, the Capacity Market Model, or client models. IFM informs decision making by evaluating the likely impact of resource alternatives on retail rates. Factors that can drive significant rate impact differences from similar cost resource options include depreciation rates (including eligibility for accelerated depreciation), tax credits, tariff treatment of costs (e.g., riders v. general rate case), location of asset on the transmission or distribution system. The IFM calculates a bottom up cost of service for generation, transmission, and distribution and can segment rates by class.
- Peer Electric Rate Forecasting Model (PERFORM)
- CRA’s PERFORM model was developed to assist electric utility clients with capital allocation questions through an understanding of how other utility retail rates are expected to grow over the next decade. The PERFORM model relies on publicly available information (investor presentations, 10ks, news reports) and expert perspectives to build a bottom-up estimate of retail rate growth for all publically traded US electric utilities. The PERFORM model, which is proprietary to CRA, is a highly detailed cost of service model that can reflect utility-specific nuance in taxes, energy efficiency, customer assistance, and even pension programs.