U.S. Generation Monitoring Services
Scoville Risk Partners and Skipping Stone have partnered to provide international investors in U.S. generation assets with asset monitoring services. These services are designed for investors who desire third-party validation and expertise to monitor and report on the financial performance in critical areas such as power sales, hedging strategies, forecasting and revenue optimization. For investors who do not control the financial performance of generation investments, the monitoring service provides the information and data required to validate these activities performed by either the development partner or their outsourced asset management vendor.
Typically, investors in U.S. generation assets do not take controlling interest in the assets, rather they are minority investors. The controlling investor is often the project developer. In most cases the developer provides a project prospectus with details of the generation assets, location and a forecast of the revenue and profit potential. Either the developer or an outsourced asset management vendor is responsible for selling the power, scheduling with the market (often an ISO, such as PJM), reconciling transaction settlements, hedging and revenue optimization. For gas fired plants they also buy gas, schedule delivery and manage the gas pricing strategies, including capacity and hedging.
A financial forecast for any project is based on the best available information at the time of the prospectus. The actual financial performance of the project is always different than the forecasted performance due to changing market conditions, whether arising from short time scale price volatility or changes that effect longer time scales such as the addition of new generation and transmission assets, changes in regulation, the impact of shale gas or the growing footprint of renewables.
Most investors do not have in house expertise in U.S. power markets. It is also difficult to find and hire staff with this expertise outside of the U.S. and very costly to hire and maintain a U.S. presence for purposes of monitoring the financial performance of these investments. For a fraction of the in-house staffing cost we provide a monitoring service to validate, verify and monitor the financial performance of your investment.
Our monitoring service does not merely report what has happened; we also explain why it happened and provide a perspective on what should have happened. Empowered with comprehensible explanations of the factors that caused any surprises or significant deviations from forecasted financial results, investors can raise potential issues with developers and outsourced asset managers. In addition, investors can utilize this information to explain in detail to their boards of directors the reasons for deviations from financial results forecasts.