Projects

We created a pricing mechanism using a number of objective, measurable features related to customers' consumption profiles which allowed significant variation in pricing. This mechanism created incentives for customers to improve their efficiency by rewarding customers who use gas in a more consistent manner with lower prices. Creation of the pricing mechanism required use of non-linear mathematical optimisation techniques under multiple constraints in order to satisfy the competing requirements. ...

We created all customer engagement tools to facilitate explanation of the new mechanism to customers. We additionally created modelling tools for long-term budgeting and strategic planning purposes. We wrote the software required to convert hourly consumption logger file data into the metrics required for pricing calculation and the loading of this information into the accounting system. We created a parallel calculation to check the invoicing integrity of the new process. ...

We built a financial model of the savings that would be realised by the power utility under various possible operational modes, quantities of gas sold and instantaneous demand requirements. We integrated this model with the clients own financial model to ensure that multiple scenarios could be analysed both from the client's perspective and that of the utility. ...

We provided analytical, and strategic support in a number of Gas Supply Agreement negotiations between our client (a piped-gas trader) and their customers. We assisted by calculating the possible profit impact of offering customised escalation adjustment mechanisms under uncertain future scenarios, and by quantifying the sensitivity of a customer's pricing to the pattern-of-use elements of the pricing mechanism under their control. We created innovative mechanisms to facilitate differential pricing for appropriate customers whilst complying with the non-discriminatory requirements of the regulatory environment. ...

We created a stochastic scenario generator to integrate with the existing financial model. By doing this we retained all the complexity already built into the existing model by the client but provided insights from the same model that could not be gained by considering a single scenario at a time. We provided the client with a number of visual tools to illustrate the risks of different options and facilitate board approval of the project. ...

Meridian was appointed to prepare the Sunrise tariff application. However, given that Sunrise required a levelised cost tariff (an inflation indexed tariff) we first had to engage NERSA around the methodology that Sunrise wished to use for the application. After extensive engagements and exchanges of letters on the technicalities of our proposed approach (and demonstrating its NPV equivalence to the NERSA Rate of Return approach) we were able to reach a point where the tariff application could proceed on a levelised cost basis. ...

We constructed a comprehensive paramaterised multi-period financial model of the client's profitability metrics under arbitrary assumptions around volume and macro-economic scenarios. We generated multiple stochastic macro-economic scenarios incorporating the client's forecasts. We developed a visual spreadsheet tool to illustrate the likely range of consequences under the pricing options envisaged by the client. This process allowed the client to refine their offering and confirm that their business strategy gave them desirable levels of risk/reward from the unhedged exposures. ...