Helping you get ahead - PwC

Helping you get aheadGlobal utilities groupstatement of capabilities

www.pwc.com/utilities

PwC CAP statement 2011v6 9/3/11 13:20

Introduction 2

PwC – at the forefront of industry change 3

Working together – our starting points 5

Working together – your destinations 8

What makes us different 21

Contacts 25

Contents

your priorities, ourprofessionalism...

...doing greatwork together

1 Global utilities group statement of capabilities: Helping you get ahead

Our starting point is matching yourneeds with our utilities sectorknowledge, professional objectivity andrigour. We aim to have a continuingdialogue, listening to your priorities,understanding your business issues, anddelivering great work together.

PwC CAP statement changes 18.3 21/3/11 16:15

IntroductionPower and other utilities companies have changed dramatically in a very short space of time. Just a couple of decades ago, local or municipalfootprints predominated. Today companies are international inambition and, even those who remain focused on their home market,have to take their decisions in a global context.

The capital investment challenge inthe sector is massive and is takingcompanies into new areas both interms of technological possibility andengineering feasibility. Companies areanticipating a future with a muchwider range of technologies and wherethe shape of the industry will bedifferent. It’s not just the mix ofgeneration that is changing but how itis optimised and what it is used for, asmore people and technologies connectwith the grid in smarter ways.

The role of electricity is expanding. Itis already the power behind mostapplications in modern life and willbecome even more so if electric carstake hold as a common form ofpersonal transport. The part that gasplays is also changing rapidly. Theexploitation of many more sources ofgas, including shale gas, is introducinga new era of gas, changing theeconomics of the liquefied natural gasmarket and enabling gas to assume thecharacteristics of a more truly globalmarket.

Utility companies are at the forefrontof the response to climate change,investing in renewable generationcapacity and new solutions for cleanerenergy. Alongside this, they areengaged in extensive renewal ofexisting generation and infrastructureas well as planning for the additionaltransmission capacity that will beneeded to accommodate new sourcesof generation.

PwC works with companies andindustry stakeholders in every regionof the world to assist with thedecisions, planning andimplementation of these and otherchanges.

We have been involved in many of themajor developments that are shapingthe utilities industry, including thedesign of market reform, advising onsome of the mergers that are creatingglobal companies and examiningfuture options for harnessingrenewable energy.

This statement of our capabilities isintended to give you insight into ourexperience and the ways we can worktogether to get you further ahead.Always, our goal is to understand yourneeds and add value from ourknowledge and expertise.

Global utilities group statement of capabilities: Helping you get ahead 2

Manfred WiegandGlobal Utilities Leader


Three out of every ten leading companiesin the sector choose us as an audit partner.We are also the partner of choice for manymedium sized and smaller companies. PwCis on hand when governments andregulatory bodies need top-level advice onreform of market structures or hands-ondelivery of the resulting changeprogrammes.

At an international level, we are thefunding patron of the World EnergyCouncil and a long-standing partner andsponsor of the World Energy Congress.PwC’s Annual Global Energy, Utilities andMining Conference formed part of the theInternational Energy Agency’s globalroadshow to launch the World EnergyOutlook 2010.

PwC is at the heart of industry change. We have worked andcontinue to work with companies, regulators and governmentson many of the big developments affecting the sector. Thisincludes the design of market reform and trading arrangementsin newly liberalised markets, carbon emissions trading andemissions verification, and working with companies on thedevelopment and roll-out of industry-changing technology suchas smart grids and carbon sequestration and storage (CCS).

PwC is a member of the World NuclearAssociation and of Euroelectric. PwC andthe World Economic Forum have beenstrategic partners since the mid-1980s.PwC is a knowledge provider for theAnnual Meeting in Davos-Klosters,Switzerland, and regional summitsconducted by the World Economic Forumevery year.

In many of the individual countries inwhich we operate, we are members ofleading industry associations. For example,in the US we are an active member of theEdison Electric Institute, providingspeakers for some of their major eventsand expertise as instructors for a largenumber of the institute’s member trainingcourses. We have similar involvement inindustry associations in countries rangingfrom Brazil to Japan, from China to Chile.


“Whether you are a small electricity producer inBelgium or a coal miner in the US, what China does ismore important than anything else. It will affecteverybody”Dr Fatih Birol, Chief Economist, International Energy Agency, speaking at the PwC Global Energy,Utilities and Mining Conference Istanbul, November 2010

PwC – at the forefront of industry change

• We live and breathe the sector, understanding your issues and able to respond to your priorities.

• We have over 4,000 staff worldwide dedicated to the utilities sector.

• Our global coverage means we are on hand wherever you need us.

• We deliver to a single PwC global quality standard, giving you the assurance of local market insight matched with worldwide professionalism and rigour.

• We listen to you and continuously build your feedback into our work.

• Our audit projects are reviewed by a PwC partner who is not part of the project team, building independence into your feedback and appraisal of us.

• We give you the best talent from around the world. We arerecognised as a number one employer of choice in many key locations.

At a glance – why PwC ?


Representative utility auditand other assurance clients

AGL Resources Inc.Allegheny Energy, Inc.Ameren CorporationAmerican Water Works CompanyBG Group plcBritish Energy PlcCalpine CorporationCentrica plcChina Power International Generation Company LimitedCLP Holdings LimitedCMS Energy CorporationConsolidated Edison Inc.Constellation Energy Group Inc.DTE Energy CorporationE.ON AGEdison InternationalEnbridge IncEnergy AustraliaExelon CorporationFederal GridHuaneng Power International, Inc.Koc Holding A.S.N.V. NuonNational Fuel Gas CompanyNational Grid plcNSTARPepco Holdings, Inc.Puget Energy, Inc.RusHydroRWE AGSouthern Union CompanySouthwest Gas CorporationTECO Energy, Inc.UniSource Energy Corporation


AES CorporationAlintaAmerican Electric Power Company Inc.Aquila, Inc.British Nuclear Fuels PlcCEMIGCommissariat à l’énergie atomique (CEA)Companhia Energetica de Minas GeraisDuke Energy CorporationDynegy Inc.Electricite de France (EDF)Electricidade de Portugal (EDP), S.A.Electricity Supply BoardEnBW AGEnel SpAEnergy Future HoldingsEntergy CorporationEskom Holdings LimitedFortum CorporationGalp Energia, S.G.P.S., S.A.GDF SUEZHydro TasmaniaIner RAO UESInternational Power plcNextEra EnergyNicor Inc.Northeast UtilitiesNorthWestern CorporationOrigin EnergyPG&E CorporationPiedmont Natural Gas Company, Inc.Progress Energy, Inc.Public Power Corporation S.A.Public Service Enterprise GroupSevern Trent PlcSouthern CompanyTata PowerUnited Utilities Group PlcVattenfallVeolia EnvironmentXCEL Energy Inc.

Representative utility advisory and tax clients

“Three out of every ten leadingcompanies* in the sector chooseus as an audit partner.”* companies with US$10bn plus revenue

“Our clients stay with us in relationshipsthat are built to last. Between them, ourfive largest utility company audit clientsalone have worked together with us forover 120 years.”


Audit and assurance

PwC audits major utility companies in keyenergy markets – gas, electricity, water,renewables and other services. Utilitycompanies want audit teams that knowtheir issues and understand their businesschallenges.

PwC’s professionals bring a high level ofutilities knowledge to their work. Ourindustry-dedicated professionals receivespecialised training, including regularupdates on utility-specific issues. We havethe knowledge and experience necessaryto help you with complex financialaccounting issues related to matters suchas valuations, pensions and share plans,listings, International Financial ReportingStandards (IFRS) conversions, andcorporate treasury and companysecretarial functions.

PwC’s Global Utilities Group focuses on delivering professionalservices to companies of all sizes, across all segments of theindustry. We provide industry-specific solutions in the fields ofaudit and assurance, transactions and tax to help companies address their business and stakeholder issues.

PwC auditors around the world use asingle, global audit methodology, fullycompliant with International AuditingStandards and applicable nationalstandards. Our globally consistentapproach to audit means that regardless oflocation, PwC people can understand andevaluate your business using a singlelanguage and common methods. In turn,that gives you a uniform level of quality inall our audits. This methodology alsoenables us to quickly organise and deploythe kinds of multinational audit teamsoften required by our larger utilitiesclients.

Our member firms audit many of theworld’s best-known companies andthousands of other organisations bothlarge and small. Our audit approach, at theleading edge of best practice, is tailored tosuit the size and nature of yourorganisation and draws upon our extensiveindustry knowledge. Our deepunderstanding of regulation andlegislation means we can also help withcomplex reporting issues involvingSarbanes-Oxley and IFRS.

Additionally, we are leaders in thedevelopment of non-financial performancereporting, helping our clients respond tothe need for greater transparency,improved corporate governance, andbusiness models based on the principles ofsustainability.


Working together – our starting points

We have over 4,000specialists worldwide...

...who are dedicated to the utilities sectoralone, giving you the sector insight thatyour projects require.

Advisory services

The needs of utility sector companies andother industry stakeholders lie at the heartof our thinking and expertise. Whether youare pursuing new opportunities,responding to events or coping with thedaily pressures of growth, we are there tohelp. We do this by creating unique, value-added solutions based on the combinationof industry knowledge, subject matterexpertise in our Consulting and Dealsteams, and our collective experience andexpertise from all areas of PwC.

ConsultingWe help you create the value you arelooking for. We understand utilities clientsare facing a multitude of challenges as wellas opportunities. Our specialist teams workwith yours to innovate and grow, improveoperations, manage risk and regulation,and leverage talent. We are ready to assistyou in managing issues such as:• robust increase in demand for raw

materials• international expansion and pressure to

meet growth and performance targets• conflict, unrest and political instability

in oil and gas exporting countries• continuing regulatory reform with

implications both on a strategic and operational level

• commodity/fuel price volatility and price risk management

• workforce issues – attracting and retaining the right talent mix

• industry consolidation and asset portfolio rationalisation

• outdated legacy systems, particularly customer information

• realising synergy savings from acquisitions

• divestiture of non-core assets.


World-class best practice...

PwC was chosen by GDF Suez to design and implement its ‘Fast Close’ projectlaunched to cut by half the time required to publish the consolidated accounts ofthe group. Coming after the merger of Gaz de France and Suez, this project wasalso a major integration project for this world-class utility. PwC won the projectagainst fierce competition, building on our expertise in the best practice financialconsolidation processes as well as on knowledge of the GDF Suez Group cultureand how to manage large transformation projects.


Grow and innovate – the pressure onutility companies to find new sources ofgrowth and deliver greater efficienciesthrough innovation is intensifying. Utilitiescompanies are continuously reassessingtheir potential for growth throughinnovation powered by new technologies.We help companies get closer to theircustomers, understand the role innovationplays in their growth strategy, and assistthem in structuring and allocating limitedresources to deliver profitable marketresults. We do this by applying our deepknowledge of the utilities industry,supported by rigorous market, economicand financial analysis, to enable businessgrowth.

Improve operations – in an industryfacing higher costs for raw materials,finding ways to increase productivity andtake cost out of operations is key tocommercial success. At the same time,companies can expect continued and,indeed, greater demand from customersasking more of their organisation and theirsupply chains. We bring togethercapabilities in process improvement andfinance effectiveness to help you optimiseyour operating processes and supply chain.Our experts – many directly from theutilities industry – help you transform yourimportant value chain functions, fromcustomer management through to sourcingof services and goods. We apply provencost management methodologies and,responding to changing conditions, bringagile responses to achieve lastingsustainable benefits.

Leverage talent – getting the best frompeople at every level when there isconstant change is the key to sustainablecompetitive advantage. Solid strategies,processes and technology alone do notdeliver results. It takes people to accept,adopt, drive, and sustain the change torealise tangible impact. Success in businesshinges on strategic agility and the ability toexecute.

Manage risk and regulation – we supportour clients in identifying, understandingand managing risk and help ensure anappropriate balance between risks andopportunities. We also assist businesses indesigning and implementing governanceand compliance programmes to ensurethat companies continue to operate withinthe boundaries of relevant legislation andregulations. This includes building aculture of doing the right thing.

DealsGlobalisation of the utilities sector ismoving forward on a number of fronts.Deals are crucial to many utility companystrategies. That's why we work togetherwith clients to help determine the rightstrategy that best suits their needs. Ourgoal is to help clients meet their strategicpriorities and growth targets so that theydeliver value for their shareholders.

We are well known in the utilitiesmarketplace for our experience in majordeals across key power and gas utilitymarkets. Whether it is gaining a presencein growth markets or selling assets to fundother investments, we advise andimplement to ensure the maximum valuefor our clients.

Our experience extends the dealcontinuum from strategy throughexecution to post-deal integration,including:• modelling and business planning• financial and operational due diligence• accessing capital markets and other

sources of finance• valuing all or part of a business,

including the implications and risks• managing assets amid increased

competition• negotiating and structuring deals• maximising value post-deal.

Mergers and acquisitions – we provideindependent valuation advice for yourbusiness. By offering robust planning forthe parties to a transaction, we enableclients to capture the most value possibleand implement changes to deliversynergies and improvements after the deal.

Divestitures and sell side advice – ourutilities industry specialists help youcomplete and extract the maximum valuefrom your transactions. We identifyappropriate buyers and will implement asale to generate the best price for ourclient.

Delivering deal value – we help find thetargets, analyse the strengths andweaknesses, identify synergies andpotential improvement opportunities,negotiate terms, access capital, managethe post-deal integration process, carve outnon-core assets, and make changes torealise improvements in long-termperformance.

Restructuring and recovery – ourrecovery professionals are valued by clientsfor their ability to quickly identifyproblems, gain cooperation, develop viablesolutions, and implement them withsensitivity and precision. Our experiencedteams offer a full range of advisory andimplementation services, from turnaroundand restructuring plans to optimised exitstrategies.


Tax services

We have the largest network of taxspecialists in the world, with over 30,000dedicated tax specialists in 150 countries.This means that we can support you bothlocally and globally, wherever you requiretax advice.

Our tax professionals solve challengingissues, anticipate changes that can impactyour tax situation and financialstatements, and keep you appraised oflocal, state, foreign and international taxregulations as they pertain to yourcompany’s operations. Our network ofinternational tax structuring professionalscan enable you to structure yourinternational business in a tax-efficientmanner, both locally and globally. We canhelp you construct effective cross-borderstrategies and manage your globalstructural tax rate. We will also keep youabreast of new developments in theinternational arena that affect yourbusiness.

Early tax planning for mergers andacquisitions is essential to reduce both theactual transaction tax costs and the long-term sustainable tax rate following thetransaction. PwC can offer you expert dealstructuring and financing advice at allpoints throughout the deal cycle. Wedeliver value thorough quantitativeanalysis, rigorous implementation andleading edge structuring techniques,carrying out pre-acquisition due diligence,ensuring tax-efficient deal structuring, andensuring post-deal integration.

Inter-company transactions across bordersare growing rapidly and are becomingmuch more complex. At PwC, we have astrong international network of dedicatedtransfer pricing specialists with advancedtraining in economics, accounting, law andproject management, ready to work withyou. Our industry and tax authorityexperience and unique capabilities enableus to develop innovative approaches forutility industry participants.


Working together – our starting points

Lending our voice to utilitiessector initiatives...

PwC works with utilities companies and businessorganisations to help shape the climate in whichcompanies operate. For example, in 2010 we wereproject adviser to the Critical Mass Initiative, ledby the World Economic Forum, the InternationalFinance Corporation and the United NationsFoundation, in association with the InstitutionalInvestors Group on Climate Change and theInvestor Network on Climate Risk, which looked atways to accelerate private investment in lowcarbon infrastructure in developing countries.

Human resourcesWith more than 6,000 professionals in over150 countries, the PwC network has one ofthe world’s largest human resource (HR)advisory organisations. Ourmultidisciplinary approach allows us toadvise on all aspects of peoplemanagement, helping our clients to createvalue and deliver competitive advantagefor their businesses through people.Whether it is assisting with internationalexpansion, change programmes, tacklingskills shortages, improving and measuringhuman capital performance or developingeffective remuneration systems, PwC’s HRprofessionals can help.


PwC can help your company ororganisation in many different ways.On the following pages we summarisehow our services can help specificallywith the following key challenges:

• smarter grid optimisationand interaction with customers

• cleaner and renewable energy

• managing M&A to deliver growth

• successful capital projectsand infrastructure

• doing things better throughperformance improvement

• making the most of theregulatory environment.


Working together – your destinations


How PwC can help you

PwC can help give you momentum. Ourapproach focuses on the full lifecycle ofsmart grid initiatives and touches allaspects of what needs to be considered.

Strategy and planning – business casedevelopment, alignment of the smart gridplan to organisational strategy and overallproject management.Technology integration – selection andimplementation of technology and ITsolutions to support smart grid initiatives.Business process readiness –optimisation of critical processes to ensurethe value of smart grid investment isachieved.Compliance and risk management –validation of all compliance/contractualobligations to ensure they are achievedand managed.Regulatory and cost recovery –alignment of initiatives with market,regulatory and stimulus requirements.

Getting the right smart grid strategy and roadmap in placeCompanies need to evaluate theiroperational and regulatory landscape andhave a clear vision of the end destinationthey want to reach and what targetoperating model they want to develop.PwC can help with strategy andimplementation planning that can robustlymanage the reality and the potential ofnew interactivity across a myriad ofdifferent interfaces – between the world ofpower utilities and technology, energystorage, distributed large- and small-scalerenewable energy, electromobility,telecommunications, home and businessappliances and energy management.

Having effective programme governanceand controlThere are substantial risks to the success ofsmart grid programmes. PwC is on hand toensure that risks are identified andunderstood up front. Getting thefoundations right through goodpreparation is key. On the capitalprogramme side, there is potential, like allcapital projects, for timescales to slip andcosts to get out of hand. We can help youput effective programme control in placeand ensure that good governance is areality.


Smarter grid optimisation and interaction with customersSmart grids lie at the heart of many of the changes that are tocome in the power utilities sector – the replacement of ageinginfrastructure, clean energy, electric cars and many otherchallenges. They offer the potential to significantly reduce gridinefficiency, enable more interactive demand management,better integrate distributed power sources into the grid, changecustomer experience and facilitate new uses for electric power.


The realisation of these benefits is not easyor automatic. Like any major project, thereare the challenges of delivering on time,on budget and operating successfully.Smart grid implementation involves majorcapital project challenges. But it is not justa matter of rising to those challenges.Success also relies on a complex interplayof technological, cross-sector, behaviouraland regulatory factors in addition toeffective project implementation.

Thinking about customers from the startTwo way communication lies at the heartof smart grid technology. Its effectiveness,though, relies on such communicationtranslating into behaviour change. Evenwith smart grid technology in place,customers have to be won over and thereare many trust and other barriers toovercome along the way. PwC can drawupon extensive experience of customerreaction to smart grid programmes to helpadvise on issues such as customerrelationship management, datamanagement and security and howcompanies can manage expectations andavoid the danger of negative reactions tosmart metering.

Managing multiple stakeholdersThe success of smart grid programmesrelies on a convergence of many interestsand industries. Utility companies need tobe adept at orchestrating and managingmany stakeholders for project delivery andto ensure markets will develop in responseto the opportunities a smart grid provides.This has implications for how companiesidentify, select and make the most ofcollaboration with partner companies andjudge market development. Speed, agility,reliability and commonality of vision willall be important considerations in alliancerelationships.



Working together – Pacific Gas & Electric Company and PwC

ContextIn North America’s largest smart meterroll-out, Pacific Gas & Electric ((PG&E)is installing 10.2 million smart meters ina US$2.2bn seven year programme to2012. It is a massive logistical challengeinvolving 14,000 relays, 2,000 electricnetwork collectors, 5,000 gas networkcollectors, new billing and data systemsand much more.

PwC holds a major consulting role on theproject including participation in allexecutive steering committee discussionsand contribution to eight distinct workstreams, covering key areas such asprogramme management office (PMO)process and controls design, businessprocess design, and deployment of

real-time cost and customer impactmetrics. We highlight the PMO element ofthis work below. The smart meteringproject required integrating multiple workstreams and stakeholders through a strong,centralised project management body tomanage programme scope, schedule andbudget.

DeliverablesThe project demonstrated strong PMOcapability to the utility regulator, and hasbeen able to operate and manage scope,schedule and budget to meet projectgoals. The PwC team has operated with acollaborative focus and is able to make realtime process change, necessary for theproject considering the customer, utilityand state implications of project issues.

CommentJim Meadows, director, SmartMeter fielddeployment, PG&E says: “When we startedthe project, we specifically sold the idea toour officers that we would have PwC comeand re-evaluate the PMO’s controls,capabilities and documentation to makesure we are doing the right things and areas ‘best in class’ as we can be. We have aninternal process of course but having anoutside team come in and stare hard at usreally adds value.”

Daryl Walcroft, Partner, PwC SanFrancisco, adds: “We are hard on thembecause that is the challenge that iswelcomed and really adds resilience.”

Jim Meadows: “It has proved its worth.During the course of the project we had togo back to the regulator. The programmewas put on the stand a bit and had todefend itself but we had the documentationand stood up very well in what was a verypublic interrogative process.”

Working together – Austrian energyregulator, E-control, and PwC

ContextThe EU wants smart meteringintroduced across Europe. An EUdirective requires member states to carryout an economic assessment of all thelong-term costs and benefits to themarket and the individual consumer,looking at which form of metering iscost-effective and which timeframe isfeasible for its introduction. If the netbenefit is positive smart meters must beintroduced to cover at least 80% ofconsumers by 2020. PwC conducted thecost benefit analysis in Austria. Welooked at the costs and benefits for allrelevant stakeholders such as customers,network operators, suppliers but also theimpact to the overall market system.

Deliverables

• Development of a cost-benefit model.• Economic analysis for each stakeholder.• Assessment of available smart metering

technology.• Definition of technical requirements for

the entire market for the meters.• Definition of necessary data formats.• Assessment of the impact on network

operators’ processes.

CommentWalter Boltz, managing director of Austrianenergy regulator E-control, said “Theintroduction of smart metering in Austria isan important step for energy clients. Weexpect it will help them to manage andultimately to reduce their energyconsumption. Thus we see smart meteringas an important tool for the improvementof energy efficiency for small (householdand SME) customers. PwC supported uswith a comprehensive cost benefit analysisfor the introduction of smart metering. Theanalysis gave the regulation authority andrelevant stakeholders a clear basis for theirfurther decisions.”


The delivery of cleaner and renewableenergy entails considerable investment,project and technological challenges.Developments such as the exploration ofcarbon capture technologies, large scalesolar generation and offshore wind indeepwater locations involve considerablerisk and uncertainty. The regulatoryframework governing emissions is a crucialfactor in the long-term investmentdecisions that utility companies have tomake.

Choosing technological partners orforming alliancesThe response to climate change is takingutility companies into new technologicalareas and new markets, requiring carefulselection of project and, in some cases,strategic partners. Electric transportation,for example, will create a new way ofconsuming electricity and, with it,different physical and pricing deliverymodels. PwC can help with contractor andpartner selection and advise on the bestframeworks for matters such as jointinvestment, project design and delivery,governance and risk management.

Making the most of tax and otherincentive regimesCompanies need to ensure they are gainingmaximum benefit from rapidly changinggrant and incentive opportunities andemissions trading markets around theworld. For example, in the US alone, thereare literally hundreds of different state andlocal tax incentives available to a companyfor renewable energy and energy efficiencyprojects at any given time – not to mentionthose available at the federal level. PwC’snetwork of tax and regulatory specialists ison hand to provide advice and guidance tohelp you understand and optimise theimpact of tax and incentive regimes.

Venturing into new renewable areasThe potential to harness solar energy withlarge-scale concentrating solar power inarid regions is the focus of interest by anumber of companies and organisations.PwC is a partner of the DESERTECFoundation, a non-profit foundation withthe aim of promoting the implementationof the global concept of "Clean Power fromDeserts" all over the world. We can helpcompanies investigate the viability of suchventures. For example, we recently adviseda private company developing a project inTunisia on market and institutionalframeworks in Italy and Tunisia as a firststep to evaluating project feasibility.


Cleaner and renewable energy

Far sighted – 100% renewable

PwC, in conjunction with international climate experts atthe European Climate Forum, the Potsdam Institute forClimate Impact Research and the International Institute forApplied System Analysis, has set out a roadmap showingthe steps that would need to be taken to achieve the ‘whatif” scenario of powering Europe and North Africaexclusively with renewable electricity by 2050 (100%renewable electricity: a roadmap to 2050 for Europe andNorth Africa, 2010)

The focus on cleaner power and the associated concerns ofemission regulation and energy efficiency remain top of theagenda for many utility companies worldwide. Companies aremaking big fuel mix changes, investing in and rolling outrenewable generation or other cleaner power sources such asnuclear energy. Such investment is important not just because ofclimate change but also as part of the response to concernsabout energy security.



Making the right investment decisionsCompanies face an array of choices aboutwhere and how best to deliver cleaner andrenewable energy. Which markets? Whichtechnologies? Which sites? Capitalexpenditure or acquisitions? PwC is onhand to give you the business planning andmarket analysis that you need. We canmap your strategic and project choices,bringing clarity to a complex array ofcurrent and future variables such as theimpact of different fuel price and carbonmarket scenarios.



Working together – Stadtwerke München and PwC

ContextStadtwerke München (SWM) is thelargest municipal utility company inGermany with revenues of overEUR4.8bn. It aims to supply allelectricity to its residential customersfrom renewable energy sources by 2015.A key step in achieving this was theacquisition of a 30% stake in Gwynt yMôr, one of Europe's largest offshorewind farms with a capacity of up to 576MW.

Getting such an investment right wasvital. SWM chose PwC to develop afinancial model to analyse the projecteconomics in the transaction and post-transaction phases. It enabled thecompany to calculate the project's returnon investment and other financialindicators in order to structure thetransaction and decide on a purchaseprice.

Deliverables• Analysis of the project structure and

compilation of key economic assumptions.

• Construction of a complex financial model able to calculate and analyse the following: • investment costs, including timing of

construction phase• operating revenues, including wind

yield and price assumptions• operating expenses• financing costs, including several

financing tranches• taxation of the project company in the

United Kingdom, including various tax credits.

• Analysis of multiple scenarios and sensitivities to present effects of changes in investment costs, revenues and expenses.

• Calculation of the effects of various possible tax structures, taking into consideration British and German tax regimes and their interactions.

Comment“The purchase price has lifetimeconsequences. Once it is agreed, it sets themetrics for the project. There was thecentral objective of analysing the variablesthat impinge on the return on investmentand purchase price. But PwC also broughttogether specialists from the UK andGermany to optimise the complex taxstructure of the project, taking into accountthe British background of the project andcross-border European tax implications”(PwC).

Increasing consumer take-up

PwC is a partner in the initiative behind WindMade™, the first globalconsumer label identifying products and corporations made with windenergy. The WindMade™ label provides qualifying corporations theability to effectively communicate to consumers a commitment to windenergy that differentiates their brand, and signals a strong commitmentto renewable energy. WindMade™ is a non-profit organisationsupported by Vestas Wind Systems, The Global Wind Energy Council(GWEC), WWF, UN Global Compact, The LEGO Group, PwC, andBloomberg (the official data provider).

“PwC were at our side all of the way”ContextBhutan’s Druk Green Power Corporation (DGPS) has been accelerating development of the country’s largehydro development and export potential, starting with a public private partnership for the DagachhuHydropower Project. The installation has an installed capacity of 114 MW with approximate annual energyproduction of 500 GWh. It chose PwC India as project advisors from project concept to financial close.

CommentChhewang Rinzin, DGPC’s managing director, said: “Dagachhu is the first project of its kindfor Bhutan in terms of being a commercially structured project with project finance obtainedfrom multilateral agencies, export credit and other lenders. This is our first hydro projectwith private sector participation in equity as well as in the export of power to India. This isalso the first instance of a cross-border power trade in the world that has been approved bythe UNFCC under CDM. This involved our taking many new steps - on project finance,management, PPP, PPA, CDM, etc - and PwC India were at our side all the way.”


Getting the right deal structureWe help clients to identify the principalconcerns that will determine the rightstructure for a transaction. PwC can assistwith marshalling the complex range offactors including tax, legal, accounting andregulatory issues that will need to beconsidered together. We create a feasibilityplan to assess the chosen structure andonce this is confirmed as the right choicewe will provide continuous supportthroughout implementation.

Making sure the integration deliverswhat you needPwC has extensive experience of helpingbusinesses integrate new acquisitions. Ourdedicated teams of professionals work on-site to help manage the changes that a dealgenerates in an existing business. Weaddress the immediate concerns of theacquirer over the first 100 days of theacquisition and produce detailed actionplans to deliver value from the deal. Wealso carry out post-deal reviews after 6 to12 months to assess whether objectives arebeing met and if not, how to get them backon track. Our broad knowledge of HRissues allows us to give practical advice onemployee management. We help ourclients to navigate through the widevariety of employee programmes used andto help them choose the best programmesto achieve all potential synergies.

Running the financial and regulatoryruler over dealsAll businesses involved in an acquisition, asbuyers or sellers, need to ensure that thefinancial information they hold is asaccurate as possible and that all risks arefully known and taken account of. Thevalue of a deal can be significantly alteredby utilities regulation. We see regulators insome parts of the world taking a tougherstance in allowed cost of capital andachievable cost performances fromregulated activities. PwC can help youconduct pre-deal financial due diligenceand evaluate the regulatory risks thatmight affect your proposed deal.

Getting the right structure for JVs and strategic alliancesJoint ventures (JVs) and strategic alliancesare likely to become increasingly importantas utilities take up the challenge ofdelivering initiatives such as major nuclearand renewable energy programmes. PwCcan help with a detailed examination ofrisks and how the structure can reflect thefact that different parties will becontributing different components to a JV.For example, a company providingtechnology to the venture is in a verydifferent situation from one signing an off-take arrangement and taking mark-to-market risks. Shareholders may havedifferent appetites for, and capability to,manage exposures. With our help, your JVcan get off on a strong platform.


Managing M&A to deliver growth

Deal-making is an important motor of utility company growthand a route to acquire the new capacity, technology and skillsneeded to address issues such as security of supply and cleanergeneration. Transactions are key to utility companies extendingtheir international footprints and achieving the right balance intheir portfolios. There is a continuing appetite of outsideinvestors in the sector. The influence of international Chineseinvestors is also important and their influence will grow.


Consolidation remains a strong force.Outside Europe, most major marketsremain highly fragmented withopportunities for companies to scale-upthrough consolidation. Consolidation inwestern Europe is at a more advancedstage, providing a springboard for furthermoves inside the continent and widerinternational ambition outside.Convergence between sectors is also animportant potential deal driver ascompanies address fuel supply issues andthe implications of smarter grids and newuses for electricity.


We help you do better deals and createvalue through mergers, acquisitions,disposals and restructuring. We worktogether to help develop the right strategybefore the deal, execute deals seamlessly,identify issues and points of negotiationand value, and implement changes todeliver synergies and improvements afterthe deal.

Identifying deal valueMaximising the values that can becaptured from deals is crucial. PwC canfind the targets, analyse the strengths andweaknesses, identify synergies andpotential improvement opportunities,negotiate terms, access capital markets and other sources of finance, manage the post-deal integration process, carve outnon-core assets, and make changes torealise improvements in long-termperformance.



Working together – PwC and The Blackstone Group

ContextThe Blackstone Group is the largestalternative asset manager in the world,with over $104.3 billion in fee earningassets under management. During 2010,Blackstone's private equity group wasconsidering an investment in the USpower and utilities sector with anattempt to acquire 100% of theoutstanding stock of Dynegy Inc.Understanding the complexities of theUS power market and the business ofindependent power producers wascritical to Blackstone. Industryknowledge was a key factor whenBlackstone decided which externaladvisors to hire to advise them duringthe due diligence process.

DeliverablesPwC provided a broad range of pre-closedue diligence services, including financialdue diligence, accounting advisory, taxstructuring and tax due diligence, tradingrisk management due diligence, humanresources due diligence, IT due diligence,valuation and insurance risk managementdue diligence. Key areas driving valuewere tax structuring, analysis of the hedgebook and key facility agreements, analysisof normalized EBITDA, identification ofpotential debt-like items andunderstanding the target's liquidity andforecasted available cash position.

Comment“During several months of due diligence,PwC worked closely with Blackstone to putourselves in the client's shoes. Largevolumes of information were synthesized toprovide Blackstone with advice on keyvalue drivers affecting the transaction.Communication across PwC lines ofservices, with other external advisors andwith the client throughout the process, wascritical to developing a deep clientrelationship built on a foundation of trust”(PwC)

Working together – successfullyclosing complex infrastructuretransactions

Comment“Closing two linked project financings inthe middle of the credit crunch proved anexceptional challenge requiring a detailedunderstanding of the market and an abilityto respond creatively to fast-changingcircumstances. PwC demonstrated ourability to work with clients, their fundersand the public sector counterparties toextend the PPP concept to include fundingas well as contracting structures” (PwC)

“An exemplary service delivered in a very challenging environment” (John Laing Investments)

“Very impressed. We are tough to please,but PwC fully met our expectations”(Viridor Waste Management)

ContextThe Greater Manchester Waste (GMW)contract is the largest waste PublicPrivate Partnership (PPP) project inWestern Europe. PwC acted as leadadviser to both the winning ViridorLaing consortium on the ManchesterWaste PFI contract and to the projectsponsors on the related Runcorn Energyfrom Waste project. Services providedincluded support to sponsors in biddingfor and negotiating the underlying PPPcontract, structuring and raising projectdebt and negotiation of final terms withthe senior lenders. In addition PwCprovided specialist tax and accountingadvice and ran the time-critical processrequired to achieve simultaneousfinancial close on both projects. Thedeal, which closed in April 2009,involved two stapled project financingsand the acquisition by our client of GMWLimited, a publicly owned wastemanagement company.



Effective project appraisalSound project definition and effectivedecision making at the outset of a capitalproject are critical to a successful outcome.The ability to influence project success andenhance value is greatest at the start ofproject evaluation and rapidly declines as aproject advances towards implementation.PwC can assist you in taking the rightactions early to avoid costly errors later.We can help with option appraisal andmodelling, and feasibility studies as well asimplement measures to assess balancesheet impact, structuring and financing,funding resources, tax and real estateimplications.

Deciding on the right finance and the right contractCompanies face a series of critical choicesregarding funding options, contractorselection and management, and projectand quality management arrangements.PwC can help you secure appropriatefunding and we have a range of tools tohelp you with contract design andselection issues, including assessing thebest contractual arrangement to matchyour project risks, mapping of supply chainrisk, cost modelling and design ofincentives.

Keeping projects on or ahead of courseWe can help you put in place the thingsyou need to stay on course, includingbudgeting and forecasting processes,project cost and schedule systems,reporting procedures, open book contractcontrol and project audit. Our goal is tohelp you achieve best practice in projectcontrol, risk management, schedulemanagement, and performancemanagement. We are on hand to help youconduct reviews of project controls,processes and programme management,due diligence on programmes and projectsas well as identify the lessons learntthrough post-project close-out and review.

Getting projects back on trackPwC can help with a range of preventativemeasures to avoid projects going wrong tostart with. We can identify issues earlythrough review and health checks andthen assess and select corrective options.We understand the steps that need to betaken to recover projects quickly andeffectively. Where appropriate, we canhelp you renegotiate commercial terms.We are on hand if you are facing arestructuring, contract re-let andnegotiation, transfer or disposal situationand can advise on the best course of actionto take. We also offer dispute resolutionservices.

* World Energy Outlook 2010


Successful capital projects and infrastructureThe capital project demands for utilities are immense. In thepower sector alone, the International Energy Agency estimatesthat the cumulative global investment required in the periodfrom 2010 to 2035 is US$16.6trillion (in year-2009 dollars)*.Better and smarter grid infrastructure, new transmissionnetworks to integrate renewable energy sources, betterinterconnectors, replacement of ageing infrastructure are allpressing concerns quite apart from investment in newrenewable, nuclear and fossil fuel generation capacity.


More and more capital projects are locatedaway from OECD countries, not just in thefast growing BRIC economies but in theVISTA (Vietnam, Indonesia, Singapore,Turkey and Argentina) and similar highgrowth countries, as well as in otheremerging markets including Africa. Manyprojects in both developed and developingcountries entail substantial technologicaland construction risk as well as extensivesupport infrastructure. Deepwater offshorewind development in Europe’s North Sea,for example, is now being planned at 50metre depths with substantial shipping,port, foundations and rig requirements.


Identifying and correcting project weakenessContextOur client was a global power generationcompany running a 1200MW capacityCCGT facility. It had a £90million fixedpriced long-term service agreement tomaintain the unit over an eight-yearterm. The client was unsure whether itsmaintenance agreements weredelivering value for money and wantedan independent view


Working together – RWE npower and PwC

ContextRWE npower is constructing new CCGTpower stations at Staythorpe andPembroke in the UK. The 1650MWStaythorpe facility has beguncommercial operations and the 2000MW power station in Pembroke is underconstruction. Both gas fired powerstations were procured under an EPCcontract and are being delivered byAlstom. The value of each EPC contractis approximately £800m. RWE wantedsome advice on the project managementprocedures as they had previouslyundertaken a Flue Gas Delsulpurisation(FGD) project which had resulted in acost overrun. In particular, they wereseeking advice on internal processes andsystems to increase risk resilience and toprovide guidance on constructionprogramming, project risk managementand data management

EngagementPwC was engaged to undertake an internalreview of key project managementprocesses for the projects which were atdifferent stages of construction. Our reviewcomprised interviews with project teammembers, a review of the projectdocumentation, the project managementprocedures and the IT systems. Our riskbased assessment comprised: • a review of the EPC contracts to identify

the risk allocation and specifically the client’s commercial risks and areas where claims would likely arise from

• mapping the existing framework of project management processes and the extent to which they safeguarded the client against the identified risks was assessed

• the project’s team capability and maturity was assessed against this framework to highlight areas of concern.

OutcomeThe risk resilience review identified a lackof maturity in the project team’s systemswhich required further development toprovide a robust challenge to the type ofrisks and claims expected. Furthermore,the contract did not provide RWE with thetransparency it required to adequatelyunderstand the impact of contract changes.There was an overdependence onindividuals’ skill and competency ratherthan formal project managementprocedures. The key benefits of the reviewwere:• identification of key contractual and

delivery risks that need to be closely managed

• shortfalls in the capability of project management components such as planning and risk management and a lack of integration of IT systems were identified and solutions proposed

• guidance was provided on how claims should be scrutinised and knowledge of delay analysis techniques was transferred to the RWE team

• specific recommendations were made to increase resources allocated to record keeping, project planning and risk management activities.

Our recommendations have beenimplemented with a resulting increase inrisk resilience for RWE npower in thedelivery of these two key business projects.

Comment“We identified that the company was losing £12.5m, or14% of the contract value, under the current commercialarrangements. Our review pinpointed weaknesses in theprocurement approach, which resulted in value andperformance issues occurring during the contract. Theclient’s lack of historical information compromised theirability to provide a robust challenge to the costs beingproposed by the supplier and resulted in the resourceelement of the budget being over-estimated by 43%.Recommendations were made to enhance our client’sproject governance in order to strengthen its commercialposition in the event of a contract variation or extensionof time claim” (PwC).


Billing errors are a major challenge forutility companies worldwide. Customerswitching between companies, differentcontract start dates, house or businessmoves and the reconciliation of billedpower to power purchased by the utilityare just a few of the complicating factors.Multiple billing cycles mean that unbilledrevenue is also part of the calculation.


Delivering operational excellenceUtility companies need to deliveroperational effectiveness while managingrisk. Companies face the challenge ofmanaging ageing assets alongside theintroduction of major new generation andgrid programmes. PwC can help you acrossa wide range of operational excellenceinitiatives, from the use of lean and sixsigma techniques to manage costs and thesupply chain to introducing learning fromother sectors that can lead tobreakthroughs that save time, improvequality, lower costs, and increase revenue.

Customer retention and growthThe customer relationship in the utilitiessector has evolved from the earlier era ofcaptive markets to modern, competitivemarketplaces where much deeper anddynamic relationships are needed. Amongother things, PwC can help companiesmeasure and improve the performance oftheir contact strategies and customer-facing systems and operations. We canhelp you make sure you are maximisingthe effectiveness of your customer insightand pricing strategies. We can help youprepare for the challenges of smart meterimplementation which has the potential ofbeing a ‘make or break’ moment forcustomers.

Improving financial and performance managementPwC can help you improve managementinformation and prospective visibilitythrough alignment of financial,operational and regulatory metrics thatdrive accountabilities, decision supportand operational execution. With a focusedand proven approach, we help clients withplanning and forecasting optimisation,CPM tool deployment, dashboards,scorecards and KPI development, changemanagement and HR programmes.

Getting the most from technologyTechnology is playing a more and moreimportant role in the utilities sector, bothin terms of improving legacy environmentsand opening up new possibilities in manyareas, from generation to the customer.PwC can help companies on the bestapproach to decisions on applications andsourcing. With companies becoming moreand more regionalised across continents,we can help with rolling out technology ona regional-wide basis. We can also helpwith the transformation and culturechange challenges that come with newmarkets and operations.


Doing things better through performance improvementIn an era of high energy prices, the stakeholder pressure onutility companies to deliver greater efficiency and operationaleffectiveness is greater than ever. Higher input costs, stretchedsupply lines and the need to invest in expanded and diversifiedinfrastructure are putting significant additional cost into thevalue chain. Companies can expect continued and, indeed,greater resistance to costs being passed on to end-users makinginternal efficiency and performance even more vital. Smartasset management is becoming increasingly important,especially in the context of capital expenditure programmes at a time when so much infrastructure needs to be built.

Corporate PerformanceManagement (CPM) is aframework that...

...integrates strategy with business operations. It givescompanies a prospective and real-time picture of what isactually going on across the value chain and provides arobust platform to support future growth. It helps addressthe fundamental business questions of: How are we doing?Why? What should we be doing?



ContextAfter restructuring and unbundling thestate-owned power utilities, the Indianstate of West Bengal embarked on twolarge transformational projects to get theutilities adopt new practices and systemsto improve performance, governanceand customer service delivery.


Working together – optimising energyretailing strategies

ContextWith liberalisation of energy markets inEurope customer competition is now anestablished feature of utility retailing,placing an emphasis on sales, brand andproduct strategies. The cost of acquiringand serving customers is a key metric,not least as price is a significantcomponent of customer decision-making. In Germany, PwC has beenworking with a large Berlin energysupplier to improve the process costoptimisation of its sales unit.

Deliverables• Analysis of the current situation and

assess the competitive environment.• Conception of the target structures

(processes, organisation, IT).• Implementation of the target structures.• Development of a performance

measurement system for monitoring the effectiveness and sales pipeline.

• Support for the implementation, training and ‘the next 20 days in operation.’

Comment"Energy suppliers are very alive to theopportunities of liberalisation but also veryconscious of the challenges. Competitivemarkets are not part of their history andmany companies lack internal resourcesand expertise. In our successfuloptimisation of the sales unit of the Berlinenergy supplier, we brought in ourexperience from other industries such asautomotive. In addition, we supported thecompany in implementing the newoptimised processes in the SAP CRM"(PwC).

Providing a roadmap forimprovement – PwC and thegovernment of West Bengal

Comment“PwC have been supportingus in all these initiatives. They worked withus on the restructuring initially and then asthe capacity building consultants. Throughextensive stakeholder consultations wewere able to achieve ownership ofreforms among all stakeholders whichhelped in smooth implementation. Thefinancial restructuring plan provided thenew companies a clean balance sheetand the business plan provided theroadmap for improvement. The capacitybuilding project helped us implementradical changes in the field operatingstructure and now we are in process ofimplementing an enterprise wide ITsystem” (Malay Kumar De, principalsecretary, department of power,government of West Bengal).


Optimising rates of return Achieving an optimal level of return oninvestment and maximising shareholdervalue depends on having effective systemsin place for measuring and modellingrevenues and costs and translating thisinto an effective dialogue with theregulator. PwC can help with a range ofsituations, whether you are preparing for arate case or tariff review, assemblingvolume, investment and cost forecasts, orexamining the timing and capital structureof an investment to make the most of aparticular regulatory framework.

Evaluating the impact of regulatoryregimesWhether you are a regulator wanting todecide on the best design for a newregulatory scheme or a company needingto understand the impact on youractivities, PwC is on hand with a range ofevaluation and advisory tools. We can, forexample, help with the analysis ofdifferent market frameworks to guidecompanies considering geographicexpansion or regulators wanting tobenchmark other regimes.

Ensuring compliance with regulatoryrequirementsUtility company activities are affected notjust by industry, financial reporting andcompetition regulation but also,increasingly, by financial and commoditymarket regulation. The compliancelandscape is ever-changing and thevolatility and complexity of energy marketsthemselves are increasingly the focus forregulatory attention. Market structuresvary widely and are constantly evolving.PwC can help your company put theinternal systems in place to fit withregulatory requirements and to audit anddemonstrate compliance.

19 Conference report: Global trends and company strategies

Making the most of the regulatory environmentUtility company activities are affected by a wide range ofregulatory requirements. Alongside financial reportingrequirements, they must respond to energy policy goals,climate change and emissions targets, price and tariffrequirements and a range of minimum service obligations.Increasingly, issues such as data regulation and security are also important considerations.


Perhaps more than in any other industry,how utility companies shape and respondto the regulatory environment determinesthe value they can return to shareholdersor other stakeholders. The compliancelandscape is ever-changing and thevolatility and complexity of energy marketsthemselves are increasingly the focus forregulatory attention. Market structuresvary widely and are constantly evolving.Companies have a role to play in shapingthat evolution alongside policy-makers.


Anticipating and implementingregulatory changesUnbundling networks or other operations,smart meter programmes, renewableenergy targets. These are just a fewexamples of regulatory obligations thatrequire major investment and changes byutility companies. PwC can help youanticipate and plan for these and otherregulatory moves. When regulations arebeing considered, we can help you toassess the impact on your company andinput to the consultation on the final shapeof the regulation. We can then help withthe change projects and capitalprogrammes that may be necessary forcompliance. For example, we haveextensive experience of advisingcompanies on smart grid and unbundlinginitiatives.

Government regulationis shaping...

... many of the key investment and acquisition decisionsthat companies make. Developments such as clean energypolicy, for example, are increasing the extent to which theprice of power assets and, in turn, M&A valuations aredetermined by regulatory frameworks.



Working together – cost recovery following a natural disaster

ContextTwo severe hurricanes within a monthcaused extensive damage to the utilitiesand power company's electricitytransmission and distribution systems, aswell as several generating plants and anatural gas distribution system. In theUS, in addition to seeking recoveriesfrom their property and casualtyinsurers, utility and power companiescan seek recovery of the costs of suchevents, either as part of a traditional ratecase or as a separate case which focuseson the particular costs incurred.

DeliverablesPwC performed procedures to validate thestorm related costs, including rigorousaudits of the filed costs prior to filing withthe regulator. In some instances, weprovided formal reports on the validity ofthe costs and wrote expert testimony onthe results of our work. In performing suchreviews, we helped ‘scrub the data’. Weidentified and eliminated certain costs thatwere not related to the project andproduced an ‘audit trail’ of support for therequested costs. This type of review wasuseful by providing the company andregulators with an independent review andassurance that the costs submitted weredocumented and supported costs that wereeligible for recovery. In addition, PwC’sforensic accountants and insurance claimsconsultants assisted the company in itsrecovery of losses through its insurancecarriers. PwC provided resources,insurance claim process expertise andstrategy, and analyses to support thecompany in its claim preparation andfiling. This resulted in maximising theirrecovery, speeding up its recovery frominsurers, all while minimising the stressthat goes along with the process for thecompany's management.

Comment“These cases can be quite lengthy, leavingcompanies to finance the costs of therequired recovery between the time theyare incurred and when recovery begins,which can stretch from several months toeven over a year. Not only does therecovery case need to be assembled but it isthen subject to a lengthy ‘audit’ by the statepublic utility commission and otherintervening parties who are searching forcosts they can potentially disallow. PwCassisted the utilities and power company inthe case in which the company recoveredsubstantially all of the storm costsrequested. Our work also helped toaccelerate the recovery of the billion plusdollars of costs by several months” (PwC).

Keeping on top of regulatoryrequirements

Comment“The timeframe is ambitious. Getting itwrong carries considerable financial risk.PwC helped the German group of a majorinternational power provider to implementthe new processes. It entailed many newfunctions in the company-wide IT systems.The project covered six regional sales units,one wholesale sales unit and a countrywidesales unit. We were able to provide projectmanagement skills, quality assurance forconcepts and processes and assistance inchange management. The completion is ontrack in good time for testing well ahead ofthe regulatory deadline” (PwC)

ContextNew EU and German regulations requiregrid operators and electricity retailers inGermany to fulfil new balancing andscheduling obligations by April 2011.This development involves complexbusiness process, data exchange, IT andpeople changes. Eight hundreddistribution grid operators and about400 sales units have to adopt the newrules.



What makes us different?

Our reach

We can be wherever you need us to be.With a network of over 4,000 staffdedicated to the utilities industry andtwelve utilities centres of excellencecovering major regions worldwide, we areable to be where our clients most need us.We work with all types of utility companiesand industry stakeholders in all differentmarkets. Our different centres of expertiseenable us to focus on particular aspects ofthe energy market in each location, forexample nuclear power in France, andcross-fertilise that insight across ouractivities and services worldwide.

Our knowledge

Our worldwide network of industryspecialists are linked by a sophisticatedinternal knowledge management system,giving them the tools to input their insightsand draw upon the most up to dateinformation for the benefit of our clients.Our programme of ‘thought leadership’ iswidely respected. From roundtablediscussions to global surveys, we shareknowledge with our clients on industryissues. Each year, we prepare industry-dedicated reports and gather opinions onthe issues that are of key strategicimportance to our clients and thechallenges that lie ahead. Our knowledgedraws on the insight of our worldwidenetwork of industry specialists as well asthe industry itself.

We take the time to listen, question andunderstand their goals and theircompetitive and regulatoryenvironment. And then we tap into ourglobal network, deep industry expertise,and strong judgement and experience tohelp each client create the kind of valuethey are looking for.

The cornerstone of our approach is thebelief that developing strongrelationships with clients unlocks valueand meaningful results—and furtherstrengthens the capabilities of ournetwork. This is how we do business.And we believe it’s why more than 415 of Fortune Global 500 companies workwith PwC.

Our people

We aim to draw out people from the verybest talent and develop them to be thevery best in our sector. Our ability toattract the best people is reflected infrequent ‘employer of choice’ awards, forexample PwC was named as the numberone in The Times Top 100 GraduateEmployers in the UK. We ensure ourpeople are immersed in local knowledgeabout the markets they serve but also gainthe global perspective that comes from aworldwide organisation.

Why more than 80%of Fortune Global500 companies workwith PwC...



GermanyManfred [email protected]

AustraliaMichael [email protected]

BrazilGuilherme [email protected]

CanadaScott BoltonEmail: [email protected]

ChinaGavin [email protected]

FrancePhilippe [email protected]

GermanyManfred [email protected]

IndiaKameswara [email protected]

Middle EastPaul NavratilEmail: [email protected]

Russia and CEEDave [email protected]

Southern AfricaStanley [email protected]

United KingdomSteven JenningsEmail: [email protected]

United StatesDavid [email protected]

PwC utilities centres of excellence

Over

4,000utilities specialists...

In

154countries...

More than

161,000people worldwide...

PwC Utilities Global Centre of Excellence

PwC – on hand where youneed us worldwide


PwC – on hand where you need us worldwide...

Chinese growth: PwC making theinternational connections

PwC has been helping a major powercompany in China, also one of the largestpower companies in Asia, to moderniseand internationalise its business operationand financial management processes. Inthe past few years, with the support fromPwC’s strong international network andutility industry global expertise, PwC hasbecome the bridge between the companyand major energy companies, industryexperts, stock exchanges and governmentauthorities in the US, Australia andEurope. PwC has organised training, sitevisits and in-depth knowledge andexperience-sharing sessions on topicscovering market development, theregulatory environment, operation andfinancial management, as well astransition to IFRS.

South American power: PwC benchmarking industryperformance

PwC Columbia works with the Regional EnergyIntegration Commission on a regularbenchmarking study for power companies inSouth America, covering cost structures foradministration, operation and maintenanceexpenditures and key technical indicators. Thestudy cover over 23 companies in most of thecountries in South and Central America. As well asadvising on key indicators and benchmark design,PwC provides the tool and database to capture theinformation from the participating companies in asecure online environment. Each participatingcompany is able to compare how it stands for eachkey indicator compared to the best practice andthe average of other companies in the sample.

Australian gas: PwC managing land access and public education

Liquefied natural gas (LNG), allied with newsources of gas, is a key part of the Australianenergy mix. PwC was responsible for themanagement and coordination of Queensland GasCompany/BG Group’s end-to-end land accessprocess during the ramp up phase for its upstreamprogramme. This involved obtaining permissionsand clearances for land. We identified a number ofimprovement opportunities, designed to lead tomore streamlined processes and more predictableoutcomes. PwC also developed a series ofeducational flyers explaining how operations mayimpact on landowners, written in ‘plain English’and covering seismic testing, site selection, safety,pipelines, drilling, noise, access, water andirrigated forest plantations.



International renewables:PwC giving valuationassurance

PwC conducted independent valuations ofPacific Hydro’s assets and developmentprojects across Australia, Brazil, Chile,Philippines and Fiji. These comprised acomplex portfolio of renewable energyassets in different operation, constructionand project development stages. PwC’sknowledge of the renewable energy sectorand an infrastructure valuation capabilityprovided the assurance needed for PacificHydro and its key stakeholders. Inconjunction with Pacific Hydro, PwCdeveloped a robust valuationmethodology to assess the value ofindividual assets and developmentprojects. This included assessment of theappropriate cost of capital for the assetsacross the different geographies, takinginto account the specific developmentrisks of individual projects.

Russian power generation: PwC strengthening corporategovernance

Rosatom Nuclear Energy State Corporationwanted support to strengthen its corporategovernance system development. The projectentailed significant organisational andmanagement structure change. PwC workedclosely with the company’s senior managementin planning and designing a new corporategovernance system. The project plan wasstructured around four major steps: (1)preparation of options with an overview of themechanisms available for corporate governancedevelopment; (2) a review of the main risksconnected to each option and conducting limiteddue diligence; (3) the development of an actionplan for the implementation of the optionchosen by the company; (4) drafting ofdocuments necessary for implementation.

South African nuclear power:PwC advising on advancedtechnology investment

Eskom, the South African state-owned electricitycompany, is the lead sponsor in the Pebble BedModular Reactor (PBMR) developmentconsortium. The project is centred on anadvanced fourth generation nuclear reactordesign. PwC was asked to advise on the viabilityof this new technology and whether furtherinvestment could be justified in the developmentbusiness. We created two models. First, a utilityoperator model to evaluate and develop a set ofhigh level financial statements for a plant beingowned by a utility as operator. Second, a PBMRbusiness plan model, based on a range ofscenarios for international sales of PBMRreactors. This included assessing worldwidedevelopments and opportunities in nuclearpower, undertaking an economic analysis of theposition of nuclear generation in the SouthAfrican electricity market, and assessing thebusiness plan and undertaking modelling for thesubsidiary developing a fourth generationnuclear reactor.



Global utilities team contacts

Global contacts

Manfred WiegandGlobal Utilities LeaderTelephone: +49 201 438 1517Email: [email protected]

James KochGlobal Energy & Utilities Tax LeaderTelephone: +1 713 356 4626Email: [email protected]

Michael HurleyGlobal Energy & Utilities Advisory LeaderTelephone: +44 207 804 4465 Email: [email protected]

Territory contacts

Asia-Pacific

AustraliaMichael HappellTelephone: +61 3 8603 6016Email: [email protected]

ChinaGavin ChuiTelephone: +86 10 6533 2188Email: [email protected]

IndiaKameswara RaoTelephone: +91 40 6624 6688Email: [email protected]

IndonesiaWilliam DeertzTelephone: +62 21 521 3975Email: [email protected]

JapanKoji HaraTelephone : +81 90 1618 5601E-mail : [email protected]

Europe

AustriaGerhard PrachnerTelephone: +43 501 88 1800Email: [email protected]

BelgiumBernard GabrielsTelephone: +32 3 259 3304Email: [email protected]

DenmarkPer TimmermannTelephone: +45 39453945Email: [email protected]


FinlandMauri HätönenTelephone: + 358 9 22801946Email: [email protected]

FrancePhilippe GiraultTelephone: +33 1 56 57 88 97Email: [email protected]

GermanyManfred WiegandTelephone: +49 201 438 1517Email: [email protected]

GreeceSocrates Leptos-BourgiTelephone: +30 210 687 4693Email: [email protected]

IrelandAnn O’ConnellTelephone: +353 1 792 8512Email: [email protected]

ItalyGiovanni PoggioTelephone: +39 06 570252588Email: [email protected]

NetherlandsJeroen van HoofTelephone: +31 88 792 1328Email: [email protected]

NorwayStaale JohansenTelephone: +47 9526 0476Email: [email protected]

PortugalLuis FerreiraTelephone: +351 213 599 296Email: [email protected]

Russia and Central and Eastern EuropeDavid GrayTelephone: +7 495 967 6311Email: [email protected]

SpainIñaki Goiriena BasualduTelephone: +34 915 684469Email: [email protected]

SwedenMartin GaveliusTelephone: +46 8 5553 3529Email: [email protected]

SwitzerlandRalf SchlaepferTelephone: +41 58 792 1620Email: [email protected]

TurkeyFaruk SabuncuTelephone: +90 212 326 6082Email: [email protected]

United KingdomSteven JenningsTelephone: +44 207 212 1449Email: [email protected]

Middle East and Africa

Middle EastPaul NavratilTelephone: +973 17540554Email: [email protected]

Southern AfricaStanley SubramoneyTelephone: +27 11 797 4380Email: [email protected]

Sub-Saharan AfricaVishal AgarwalTelephone: +254 20 285 5581Email: [email protected]

The Americas

United StatesDavid EtheridgeTelephone: +1 415 498 7168Email: [email protected]

CanadaScott BoltonTelephone: +1 403 509 7502Email: [email protected]

ArgentinaJorge BacherTelephone: +54 11 5811 6952Email: [email protected]

BrazilGuilherme ValleTelephone: +55 21 3232 6011Email: [email protected]

UruguayPatricia MarquesTelephone: +598 2916 0463Email: [email protected]

For further informationOlesya HatopGlobal Utilities Marketing &Knowledge ManagementTelephone: +49 201 438 1431Email: [email protected]


PwC CAP statement changes 18.3 21/3/11 14:43 Page 25

PwC firms provide industry-focused assurance, tax andadvisory services to enhance value for their clients. Morethan 161,000 people in 154 countries in firms across the PwCnetwork share their thinking, experience and solutions todevelop fresh perspectives and practical advice.

The Global Energy, Utilities and Mining group(www.pwc.com/energy) is the professional services leader inthe international energy, utilities and mining community,advising clients through a global network of fully dedicatedspecialists.

For further information, please visit:www.pwc.com/utilities

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should notact upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express orimplied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law,PricewaterhouseCoopers does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone elseacting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

© 2011 PwC. All rights reserved. Not for further distribution without the permission of PwC. “PwC” refers to the network of member firms ofPricewaterhouseCoopers International Limited (PwCIL), or, as the context requires, individual member firms of the PwC network. Each memberfirm is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services to clients.PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professionaljudgment or bind them in any way. No member firm is responsible or liable for the acts or omissions of any other member firm nor can it controlthe exercise of another member firm’s professional judgment or bind another member firm or PwCIL in any way.


Helping you get ahead - PwC

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