Projects

Meridian has been appointed to prepare the tariff application on behalf of the client. The work entails: developing a detailed tariff model which considers the implications of different tariff methodologies, and enables detailed scenario and stochastic analysis to be performed; the preparation of the tariff application document itself; and assistance with regulatory engagement throughout the 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. ...

After lengthy engagement with the regulator regarding methodology we calculated an appropriate tariff path that would meet both the client's needs and the regulator's requirements. This required the calculation of a levelised cost tariff that increases by inflation every year, and the calculation of a Rate-of-Return tariff for the same facility and the demonstration of parity between these two different tariff profiles. We also documented the financial calculations (model) and drafted the technical (and primary) sections of the tariff application document. Following the submission of the application, we remain active on the project to assist Sunrise with the finalisation of ...

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. ...