SlideShare a Scribd company logo
Copyright © 2021 by ScottMadden, Inc. All rights reserved.
Natural Gas Benchmarking
Overview and Example Report
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
1
01
02
03
CONTENTS
Why Engage in Benchmarking?
Example Report
ScottMadden – Who We Are
Why Engage in Benchmarking?
2
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
3
Why Engage in Benchmarking?
Energy companies face increasing challenges:
n Aging infrastructure
n Declining return on equity (ROE) and increasing regulatory
scrutiny
n Ongoing cost control pressure
n Industry uncertainty
n Growth potential
n Environmental compliance demands
n Aging labor force
n External impacts on business operations
Corporate Direction Benchmarking Competitive Analysis
Set Strategic
Direction
n Mission and vision
n Performance goals
n Initiatives
Develop Business
Plans
n Sites
n Departments
n Regions
Build Supporting
Plans
n Projects
n Training
n Expansion
n Workforce
development
n Process
improvement
n Communications
Manage Performance
n Managing
n Reporting
Manage Organization
n Monthly
management
meetings
n Quarterly business
planning review
Report Results
n Performance
n Financial
n Project
Benefits:
n Provides insight on performance and helps identify improvement opportunities
n Enables companies to set stretch goals and learn from best performers through external objective reviews
n Serves as an integral part of managing the business
Assessing business
performance through
benchmarking can help
identify performance gaps and
improvement opportunities.
Benchmarking is a key part of
the business management
process.
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
$-
$500
$1,000
$1,500
$2,000
$2,500
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Annual Capital Expenditures - 9 Publicly-Traded Gas Utilities
4
Example Industry Challenge: Aging Infrastructure
n Much of the U.S. pipeline infrastructure is aging; more than a
third is 40 years or older.
n Pipeline safety, a top priority for the gas industry, is driving
investments to improve system integrity.
n Recent high-profile incidents have highlighted the need for such
improvements.
n As a result, capital expenditures among gas utilities have
increased significantly.
– The growth rate in CapEx for this group was 22% higher in
2012 than in 2011.
– Forecasts indicate this trend continuing in 2013.
0
50,000
100,000
150,000
200,000
250,000
Pre-1940
1940-
1949
1950-
1959
1960-
1969
1970-
1979
1980-
1989
1990-
1999
2000-
2009
2010-
present
Unknown
Miles
of
Pipeline
Onshore Gas Distribution Pipeline
Construction by Decade and Region (miles)
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Pre-1940
1940-
1949
1950-
1959
1960-
1969
1970-
1979
1980-
1989
1990-
1999
2000-
2009
2010-
present
Unknown
Miles
of
Pipeline
Onshore Gas Transmission Pipeline
Construction by Decade and Region (miles)
Source: PHMSA
Source: PHMSA
~31% ~55%
Source: SNL
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
5
Example Industry Challenge: Declining ROE
Rate cases have increased consistently since 2000, but
authorized ROEs continue to decline.
n In 2017, rate case filings were at the second highest point
in 18 years.
n Gas allowed ROEs are just above the lowest point in 18
years. 2017 median authorized ROEs are nearly 200
basis points below those reported in 2000.
n Contributing factors for this trend include:
– Increased levels of planned capital expenditures for
renewal of aging infrastructure
– Declining natural gas consumption
– Increasing energy efficiency in homes
Sources: ScottMadden analysis; S&P Global Market Intelligence
Earning authorized returns is challenging.
n Two-thirds of gas utilities’ earned ROEs are below
what is authorized.
n The median of earned ROE as a percentage of
allowed ROE is 97.9%.
8.5
9.0
9.5
10.0
10.5
11.0
11.5
9
19
29
39
49
59
69
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Authorized
ROE
No.
of
Rate
Cases
Rate Cases and Authorized ROE (1999-2017)
#of Gas Rate Cases Gas ROE
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
6
Our Benchmarking Approach
Our benchmarking analysis is based on publicly available data with metrics and peer groups developed based on ScottMadden’s
insight and the client’s input.
The analysis can take three to six weeks to complete depending on the level of client involvement and input needed. We tailor the
schedule to our clients’ requirements. An illustrative timeline is below.
Objectives and Planning
n Confirm objectives of
study
n Define plan and schedule
n Select metrics based on
objectives
n Develop benchmarking
panel and vet with client
Data Gathering and
Analysis
n Assemble benchmarking
data
n Develop analyses and
conduct additional
research as needed
Insight
Development
n Develop findings
n Highlight leading and
lagging areas of
performance
Presentation of
Results
n Review results
n Validate opportunities for
improvement
n Identify areas for more
detailed assessment
Phase Week 1 Week 2 Week 3 Week 4
Objectives and Planning
Data Gathering and Analysis
Insight Development
Presentation of Results
Typical fees for
this effort are
approximately
$35,000.
Example Report
7
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
8
01
REPORT CONTENTS
Introduction
Summary of Initial Observations
02
Overview of Panel Companies
03
Financial Performance
04
Operational Performance
05
Potential Improvement Opportunities
06
An example report with
illustrative data follows
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
Approach
n A panel of 12 natural gas companies, including the Company, was
selected as the benchmarking peer group for comparison purposes.
– Company size, location, and system characteristics are the
primary considerations for peer companies.
n This report is focused on key measures that provide a snapshot of
financial and operational performance compared to peers.
– Financial metrics were obtained from FERC Form 2 reports or
annual reports submitted to state commissions.
– Operational data (e.g., miles of main, number of services, leaks
repaired) were obtained from the Department of Transportation’s
(DOT) annual operator reports.
n Potential focus areas for improvement can be derived from the
benchmarking results.
– Where applicable, key industry trends, compiled from
ScottMadden’s observations and research, provide context to the
benchmarking comparison,
9
Introduction
Overview
n The objective of this review is to provide high-level
financial and operating comparisons that will help
the Company’s* management identify potential
opportunities for improvement.
n While benchmarking can point to good practices
and best-of-class results, it is not “the answer.”
Instead, the benchmarking process itself provides
a platform for dialogue about key management
questions:
– What are the appropriate measures of
performance?
– Where do we stand relative to those
measures, and who are the “best”?
– What are others doing, and what should we
be doing to improve?
– How will we institute those improvement
initiatives, and how will we measure
success?
* “The Company” is the subject of the benchmarking effort.
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
10
Summary of Initial Observations*
Benchmarking Results
1. Revenue (net of production) per customer is above the median and higher than comparable peers. While customer growth is
relatively flat, the Company is keeping pace with the peer companies.
2. The Company is below the median in terms of level of investment in its system.
3. Results for operation and maintenance (O&M) expenses are mixed.
– Non-production O&M expense is relatively high on a per mile of main basis but below the median on a per employee basis.
– Administrative and general (A&G) expense is at the peer median while distribution expenses are high compared to the peer
panel.
4. The Company’s distribution system is ranked high in the peer panel, with its relatively high percentage of older vintage mains
and services.
* The initial observations throughout this report can be refined after discussion with management to better understand
the context (i.e., the “whys” and the “so what's”).
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
11
Overview of Panel Companies
A group of comparable peer utilities was selected based on similarities in scale, region, organizational structure, and other
system operational and design characteristics (e.g., multiple opcos under one holding company, whether or not the service
territories were contiguous, whether or not they own upstream assets, pipe constructed of one predominant material, etc.) to the
degree possible to ensure a like-in-kind basis of comparison for the benchmarking analysis.
Company Customers
Throughput
(Mcf 000s)
Operating Revenue
($000s)
Utility A 694,391 68,938 644,474
Utility B 1,198,791 70,562 241,798
Utility C 918,283 80,535 1,178,102
Utility D 1,471,249 191,566 1,550,240
Utility E 544,205 48,138 380,935
Utility F 1,048,626 101,729 808,334
Utility G 431,181 12,656 369,353
Utility H 427,483 38,319 480,854
Utility I 1,881,576 210,244 1,064,301
Utility J 426,078 46,644 446,201
Utility K 656,743 79,349 909,192
The Company 686,256 85,644 424,256
NOTE: Customers, throughput, and operating revenue reflect year-end 2019 data.
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
12
Gas Revenue per Customer and Growth
Benchmarking Results – Revenue and Growth
n Overall, growth rates for the panel companies are fairly flat and
reflect the challenging economy.
n The customer growth rate for the Company is at the median of
the panel (about 0.2%).
n Revenue net of production reflects what is received for the
delivery of gas; commodity costs have been removed from this
number.
– Note: Quartiles and median are based on revenue net of
production.
n The Company was at the top quartile compared to peer
companies on a revenue net of production per customer basis.
Top Quartile
Median
Bottom Quartile
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
U
t
i
l
i
t
y
H
U
t
i
l
i
t
y
N
U
t
i
l
i
t
y
B
C
o
m
p
a
n
y
U
t
i
l
i
t
y
C
U
t
i
l
i
t
y
G
U
t
i
l
i
t
y
A
U
t
i
l
i
t
y
R
U
t
i
l
i
t
y
S
U
t
i
l
i
t
y
I
U
t
i
l
i
t
y
P
U
t
i
l
i
t
y
F
U
t
i
l
i
t
y
K
U
t
i
l
i
t
y
J
U
t
i
l
i
t
y
E
Revenue per Customer
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
U
t
i
l
i
t
y
N
U
t
i
l
i
t
y
C
U
t
i
l
i
t
y
F
U
t
i
l
i
t
y
A
C
o
m
p
a
n
y
U
t
i
l
i
t
y
B
U
t
i
l
i
t
y
K
U
t
i
l
i
t
y
I
U
t
i
l
i
t
y
G
U
t
i
l
i
t
y
J
U
t
i
l
i
t
y
S
U
t
i
l
i
t
y
E
U
t
i
l
i
t
y
H
U
t
i
l
i
t
y
P
U
t
i
l
i
t
y
R
Customer Growth – 5 Year CAGR
Better
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
13
Net Utility Plant
Benchmarking Results – Revenue and Growth
n Net utility plant reflects end-of-year total plant less accumulated
depreciation expense.
n The Company was slightly above comparable peers in net plant
per mile of main and per customer.
n The Company is just below the median for 5 Year CAGR, which
indicates that the company has been investing less in its
infrastructure than the peer panel.
Top Quartile
Median
Bottom Quartile
0%
5%
10%
15%
20%
U
t
i
l
i
t
y
A
U
t
i
l
i
t
y
P
U
t
i
l
i
t
y
I
U
t
i
l
i
t
y
H
U
t
i
l
i
t
y
E
U
t
i
l
i
t
y
N
U
t
i
l
i
t
y
S
U
t
i
l
i
t
y
O
C
o
m
p
a
n
y
U
t
i
l
i
t
y
F
U
t
i
l
i
t
y
J
Net Gas Utility Plant – 5 Year CAGR
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
U
t
i
l
i
t
y
H
U
t
i
l
i
t
y
N
U
t
i
l
i
t
y
A
U
t
i
l
i
t
y
J
U
t
i
l
i
t
y
E
U
t
i
l
i
t
y
P
U
t
i
l
i
t
y
I
U
t
i
l
i
t
y
S
C
o
m
p
a
n
y
U
t
i
l
i
t
y
F
Net Utility Plant per Customer
$0
$100
$200
$300
$400
$500
$600
$700
$800
U
t
i
l
i
t
y
H
U
t
i
l
i
t
y
N
U
t
i
l
i
t
y
B
U
t
i
l
i
t
y
A
U
t
i
l
i
t
y
M
U
t
i
l
i
t
y
J
U
t
i
l
i
t
y
L
U
t
i
l
i
t
y
E
U
t
i
l
i
t
y
I
C
o
m
p
a
n
y
U
t
i
l
i
t
y
R
U
t
i
l
i
t
y
P
U
t
i
l
i
t
y
F
Net Utility Plant per Mile of Main
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
14
Total Non-Production O&M
Benchmarking Results – Cost
n The Company was above most comparable peers based on
total non-production O&M expense per customer. A&G cost
appears to be a driver for this metric.
n However, the Company was below most comparable peers on a
per mile of main basis.
n The Company was one of the lowest to comparable peers
based on total non-production O&M expense per employee.
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
U
t
i
l
i
t
y
I
U
t
i
l
i
t
y
H
U
t
i
l
i
t
y
N
U
t
i
l
i
t
y
A
U
t
i
l
i
t
y
E
U
t
i
l
i
t
y
G
U
t
i
l
i
t
y
K
U
t
i
l
i
t
y
S
U
t
i
l
i
t
y
O
U
t
i
l
i
t
y
J
C
o
m
p
a
n
y
U
t
i
l
i
t
y
F
U
t
i
l
i
t
y
P
Total Non-Production O&M Expense
Distribution Transmission
Underground Storage Other Storage
Administrative & General Customer Accounts
Customer Svc. & Info. Sales
$0
$100
$200
$300
$400
$500
$600
$700
U
t
i
l
i
t
y
G
U
t
i
l
i
t
y
A
U
t
i
l
i
t
y
N
U
t
i
l
i
t
y
I
U
t
i
l
i
t
y
H
U
t
i
l
i
t
y
P
U
t
i
l
i
t
y
S
U
t
i
l
i
t
y
B
C
o
m
p
a
n
y
U
t
i
l
i
t
y
K
U
t
i
l
i
t
y
C
U
t
i
l
i
t
y
J
U
t
i
l
i
t
y
F
U
t
i
l
i
t
y
E
Total Non-Production O&M Expense per Customer
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
U
t
i
l
i
t
y
A
U
t
i
l
i
t
y
N
U
t
i
l
i
t
y
G
U
t
i
l
i
t
y
I
C
o
m
p
a
n
y
U
t
i
l
i
t
y
B
U
t
i
l
i
t
y
C
U
t
i
l
i
t
y
D
U
t
i
l
i
t
y
J
U
t
i
l
i
t
y
P
U
t
i
l
i
t
y
K
U
t
i
l
i
t
y
H
U
t
i
l
i
t
y
E
U
t
i
l
i
t
y
F
Total Non-Production O&M per Mile of Main Better
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
$0
$50
$100
$150
$200
$250
$300
U
t
i
l
i
t
y
K
U
t
i
l
i
t
y
B
U
t
i
l
i
t
y
N
U
t
i
l
i
t
y
C
U
t
i
l
i
t
y
A
U
t
i
l
i
t
y
G
C
o
m
p
a
n
y
U
t
i
l
i
t
y
F
U
t
i
l
i
t
y
I
U
t
i
l
i
t
y
O
U
t
i
l
i
t
y
H
U
t
i
l
i
t
y
S
U
t
i
l
i
t
y
R
U
t
i
l
i
t
y
Q
U
t
i
l
i
t
y
P
U
t
i
l
i
t
y
E
Total A&G Expense per Employee
$0
$50
$100
$150
$200
$250
$300
$350
U
t
i
l
i
t
y
B
U
t
i
l
i
t
y
N
U
t
i
l
i
t
y
G
U
t
i
l
i
t
y
A
U
t
i
l
i
t
y
C
U
t
i
l
i
t
y
K
U
t
i
l
i
t
y
H
C
o
m
p
a
n
y
U
t
i
l
i
t
y
I
U
t
i
l
i
t
y
S
U
t
i
l
i
t
y
D
U
t
i
l
i
t
y
L
U
t
i
l
i
t
y
J
U
t
i
l
i
t
y
F
U
t
i
l
i
t
y
P
U
t
i
l
i
t
y
E
Total A&G Expense per Customer
15
A&G O&M
Benchmarking Results – Cost
n We provide more detailed analyses of A&G expenses, as this is one of the largest components of total non-production O&M.
n Higher A&G expense per customer for the Company is driven primarily by employee pensions and benefits, outside services, and
salaries.
n A&G O&M expense per employee for the Company was above the median and comparable peers.
Top Quartile
Median
Bottom Quartile
Better
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
16
Distribution O&M
Benchmarking Results – Cost
n Distribution is another major component of non-production O&M expense.
n The Company’s distribution O&M expense per mile of main and per customer are lower than the majority of the panel, likely because of
the Company’s high percentage of newer pipe (see following page).
Top Quartile
Median
Bottom Quartile
$0
$50
$100
$150
$200
$250
U
t
i
l
i
t
y
P
U
t
i
l
i
t
y
A
U
t
i
l
i
t
y
H
U
t
i
l
i
t
y
S
U
t
i
l
i
t
y
G
U
t
i
l
i
t
y
N
C
o
m
p
a
n
y
U
t
i
l
i
t
y
I
U
t
i
l
i
t
y
J
U
t
i
l
i
t
y
E
U
t
i
l
i
t
y
K
U
t
i
l
i
t
y
F
U
t
i
l
i
t
y
D
U
t
i
l
i
t
y
C
U
t
i
l
i
t
y
B
Distribution O&M Expense per Customer
$0
$2
$4
$6
$8
$10
$12
$14
$16
U
t
i
l
i
t
y
A
U
t
i
l
i
t
y
G
U
t
i
l
i
t
y
N
U
t
i
l
i
t
y
P
U
t
i
l
i
t
y
I
U
t
i
l
i
t
y
J
C
o
m
p
a
n
y
U
t
i
l
i
t
y
C
U
t
i
l
i
t
y
E
U
t
i
l
i
t
y
B
U
t
i
l
i
t
y
D
U
t
i
l
i
t
y
M
U
t
i
l
i
t
y
Q
U
t
i
l
i
t
y
K
U
t
i
l
i
t
y
L
U
t
i
l
i
t
y
F
Distribution O&M Expense per Mile of Main
Better
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
17
Composition of Gas Distribution System
Benchmarking Results – Operational
n The Company has a high percentage of services that were
installed prior to 1940 or are of an unknown vintage.
n Like mains, the vintage and composition of services by material
are determinants of system performance and maintenance
expenses.
n More than half of the Company’s distribution mains were
installed prior to 1989, and 33% of the Company’s mains were
installed prior to 1970.
n The vintage and composition of distribution mains by material
type can drive system performance and maintenance expenses
(leaks, etc.).
0% 20% 40% 60% 80% 100%
Utility F
Utility J
Utility R
Utility D
Utility G
Company
Utility M
Utility A
Utility I
Utility K
Utility B
Utility H
Utility P
Utility Q
Utility N
Utility E
Utility C
Distribution Mains by Vintage
%Pre-1940 & Unknown %1940 to 1949
%1950 to 1959 %1960-1969
%1970-1979 %1980 to 1989
%1990 to 1999 %2000 to 2009
%2010 to 2019
0% 20% 40% 60% 80% 100%
Utility D
Utility M
Utility J
Utility H
Utility N
Utility F
Company
Utility R
Utility K
Utility A
Utility B
Utility Q
Utility G
Utility I
Utility P
Utility C
Utility E
Distribution Services by Vintage
Pre-1940 & Unknown 1940 to 1949
1950 to 1959 1960 to 1969
1970 to 1979 1980 to 1989
1990 to 1999 2000 to 2009
2010 to 2019
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
0
2000
4000
6000
8000
U
t
i
l
i
t
y
I
U
t
i
l
i
t
y
A
U
t
i
l
i
t
y
E
U
t
i
l
i
t
y
G
U
t
i
l
i
t
y
P
U
t
i
l
i
t
y
N
U
t
i
l
i
t
y
B
U
t
i
l
i
t
y
Q
U
t
i
l
i
t
y
M
C
o
m
p
a
n
y
U
t
i
l
i
t
y
K
U
t
i
l
i
t
y
F
U
t
i
l
i
t
y
R
U
t
i
l
i
t
y
J
U
t
i
l
i
t
y
D
U
t
i
l
i
t
y
L
U
t
i
l
i
t
y
L
Main Leaks by Cause
Corrosion Failure Pipe, Weld, or Joint Failure
Natural Force Damage Equipment Failure
Excavation Damage Incorrect Operation
Other Outside Force Damage Other
0
2
4
6
8
10
12
U
t
i
l
i
t
y
F
U
t
i
l
i
t
y
J
U
t
i
l
i
t
y
A
U
t
i
l
i
t
y
H
U
t
i
l
i
t
y
K
U
t
i
l
i
t
y
P
U
t
i
l
i
t
y
E
U
t
i
l
i
t
y
C
U
t
i
l
i
t
y
B
U
t
i
l
i
t
y
N
U
t
i
l
i
t
y
I
U
t
i
l
i
t
y
G
U
t
i
l
i
t
y
M
U
t
i
l
i
t
y
Q
U
t
i
l
i
t
y
D
C
o
m
p
a
n
y
U
t
i
l
i
t
y
R
U
t
i
l
i
t
y
O
Service Leaks per Thousand Services
0
200
400
600
800
1,000
1,200
1,400
1,600
U
t
i
l
i
t
y
H
U
t
i
l
i
t
y
C
U
t
i
l
i
t
y
P
U
t
i
l
i
t
y
A
U
t
i
l
i
t
y
Q
U
t
i
l
i
t
y
G
U
t
i
l
i
t
y
B
C
o
m
p
a
n
y
U
t
i
l
i
t
y
I
U
t
i
l
i
t
y
N
U
t
i
l
i
t
y
E
U
t
i
l
i
t
y
M
U
t
i
l
i
t
y
J
U
t
i
l
i
t
y
F
U
t
i
l
i
t
y
K
U
t
i
l
i
t
y
R
U
t
i
l
i
t
y
D
Main Leaks per Thousand Miles of Main
n The Company is close to or below the peer median in each
measure related to leaks.
n The Company experienced a comparatively higher number
of main leaks compared to service links, and the majority
of main leaks resulted from corrosion failures and natural
force damage.
Better
Better
18
Main and Service Leaks
Benchmarking Results – Operational
Top Quartile
Median
Bottom Quartile
Better
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
19
Pipeline Incidents by Cause
Benchmarking Results – Operational
n The Company had three significant incidents over the previous 10 years; four peer utilities experienced the same or fewer incidents,
while nine peer utilities experienced a higher number of incidents over the same timeframe.
NOTE: Significant incidents meet
one or more of the following criteria:
n Fatality or injury requiring in-
patient hospitalization
n $50,000 or more in total costs
n Highly-volatile liquid releases of
five barrels or more or other
liquid releases of 50 barrels or
more
n Liquid releases resulting in an
unintentional fire or explosion
Better
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
0
5
10
15
20
25
U
t
i
l
i
t
y
B
U
t
i
l
i
t
y
L
U
t
i
l
i
t
y
S
U
t
i
l
i
t
y
P
C
o
m
p
a
n
y
U
t
i
l
i
t
i
y
O
U
t
i
l
i
t
y
J
U
t
i
l
i
t
i
y
M
U
t
i
l
i
t
y
R
U
t
i
l
i
t
y
K
U
t
i
l
i
t
y
A
U
t
i
l
i
t
y
E
U
t
i
l
i
t
y
I
U
t
i
l
i
t
i
y
N
Estimated
Property
Damage
($M)
No.
of
Significant
Incidents
Pipeline Incidents by Cause and Total Property Damage (2010-2020)
Corrosion Failure Equipment Failure Excavation Damage
Incorrect Operation Material Failure of Pipe or Weld Natural Force Damage
Other Cause Other Outside Force Damage
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
610
620
630
640
650
660
670
680
690
700
710
U
t
i
l
i
t
y
H
U
t
i
l
i
t
y
E
U
t
i
l
i
t
y
K
C
o
m
p
a
n
y
U
t
i
l
i
t
y
F
U
t
i
l
i
t
y
B
U
t
i
l
i
t
y
J
U
t
i
l
i
t
y
A
U
t
i
l
i
t
y
G
U
t
i
l
i
t
y
C
U
t
i
l
i
t
y
D
U
t
i
l
i
t
y
I
J.D. Power Gas Utility Customer Satisfaction Index
n The Company’s customer satisfaction rating is just above the median among the peer panel companies.
20
J.D. Power Customer Satisfaction
Benchmarking Results – Customer
Top Quartile
Median
Bottom Quartile
Better
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
21
01
02
03
NEXT STEPS
Review results with management
and key stakeholders
Validate opportunities for improvement
(e.g., identify gaps with leading practices)
Identify areas for more detailed
assessment
ScottMadden – Who We Are
22
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
23
Who We Are
We believe that client success is the best measure of our
own success.
We listen carefully to our clients’ challenges, concerns,
and goals so we can personalize our work and focus on
the things most important to their success.
We don’t solve problems with canned methodologies—
we help our clients solve the right problem in the right
way.
We do what we say we are going to do with genuine
passion, tenacity, and integrity throughout the entire
process.
ScottMadden is a management
consulting firm with more
than 35 years of deep, hands-
on experience.
WHAT IT TAKES
W E D O
TO GET IT DONE
R I G H T
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
24
Energy Is Who We Are
ScottMadden is a management consulting firm with more than 35 years of deep, hands-on experience.
We deliver a broad array of consulting services—from strategic planning through implementation—
across the energy utility ecosystem.
Our energy practice covers the following areas:
TRANSMISSION &
DISTRIBUTION
GRID EDGE
ENERGY
MARKETS
ENERGY
CORPORATE
SERVICES
GENERATION
RATES &
REGULATION
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
25
Energy
Our work for you is experience-based, not theoretical.
EXPERIENCE AREAS OF FOCUS
We have been serving the energy industry since 1983. Our
industry-leading clients trust us with their most important
challenges. They know that we have seen and solved a
similar problem. Our consultants have earned this confidence
through decades of experience in the field, and they are on
the front lines of this changing landscape.
ScottMadden has worked in every business unit and every department in
companies across the energy utility ecosystem. We focus on
Transmission & Distribution, the Grid Edge, Generation, Energy
Markets, Rates & Regulation, and Energy Corporate Services.
SERVICES
We have helped our clients develop and implement strategies, improve
critical operations, reorganize departments and entire companies, and
implement myriad initiatives.
Cristin Lyons
Practice Area Leader
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
26
Our Consulting Approach
CONTENT DEEP
We know energy and have worked in every business unit and every
department in companies across the energy utility ecosystem for more
than 35 years.
PERSONALIZED
We begin by listening to our clients’ situations, challenges, and goals;
then we personalize our work to help them succeed.
CONTEXTUAL
We don’t solve problems with canned methodologies—we help our
clients solve the right problem in the right way.
COLLABORATIVE
We engage our clients like no other firm does, working side by side to
produce results.
REAL RESULTS
Our work is practical and can be put into play immediately. We excel at
helping internal stakeholders take ownership to continue producing
results after our work is done .
At ScottMadden, we work to earn our
clients’ trust every day by delivering
unparalleled consulting services.
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
27
Why ScottMadden?
DEEP EXPERTISE
n More than 35 years in the energy industry gives us
unmatched experience.
n Most likely we’ve seen a similar issue or solved a
similar problem.
PERSONALIZED APPROACH
n Before we begin any project, we sit down and listen to
our clients’ needs and challenges.
n We engage with our clients like no other firm does,
working side by side to create practical, real results.
n We don’t employ canned methodologies or cookie-
cutter solutions. We work to solve the right problem in
the right way.
PHILOSOPHY
n We are personally invested in every project and
measure our success by our clients’ success.
n We listen to our clients’ needs and put their best
interests ahead of our own.
n We work with integrity, tenacity, and a genuine passion
for what we do.
n We do what it takes to get it done right. More than 35 years later, our very first
client is still with us today.
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
28
Who We Work With
We work with clients across the energy utility ecosystem including electric, gas, and water investor-owned utilities, public power entities,
RTOs and ISOs, transmission companies, and non-utility organizations. A sample of our clients is shown below.
Note: Representative sample; not all-inclusive of clients served. Excludes numerous well-known clients due to confidentiality agreements.
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
29
Who We Work With – Gas
We work with clients across the energy utility ecosystem, including many gas utility organizations. A sample of our clients is shown below.
Note: Representative sample; not all-inclusive of clients served. Excludes numerous well-known clients due to confidentiality agreements.
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
30
Gas
Representative Qualifications
DIVERSIFIED UTILITY
Gas Industry Briefing and Benchmarking Analysis
ScottMadden worked with a diversified utility after a recent acquisition of three
local distribution companies (LDCs) to develop an executive primer on the
natural gas industry and the business model for a typical LDC. This engagement
also involved a detailed benchmarking analysis that compared the acquired
LDCs to regional and national peer panels.
MULTIPLE GAS LDCS
Business Process Improvement
ScottMadden managed large multi-team projects to assess LDCs’ current state
processes, functions, and organizations, and we led teams through developing
future state designs and business cases to support implementation.
ScottMadden provided the methodology, supported project management,
facilitated and performed analysis, offered best practices, supported
communications and change management, and helped to develop deliverables.
Projects improved business results, service levels, and operating efficiencies,
increased employee engagement, and helped develop a new culture of
continuous improvement. The project was cited in the client’s subsequent Wall
Street analyst presentations and annual reports.
GAS LDC
Organization Analysis
ScottMadden conducted an organizational structure analysis for a large gas
LDC by comparing current state practices to best practice benchmarks,
including spans of control, layers, and cost to manage. The analysis resulted in
identification of potential areas of improvement. These opportunities would
result in a structure aligned with corporate strategy, efficient decision making,
clear accountabilities, increased morale, and the potential for significant savings.
Copyright © 2021 by ScottMadden, Inc.
All rights reserved.
Cristin Lyons
Partner and
Energy Practice Leader
ScottMadden, Inc.
2626 Glenwood Avenue
Suite 480
Raleigh, NC 27608
cmlyons@scottmadden.com
O: 919-781-4191 M: 919-247-1031
Ed Baker
Partner
ScottMadden, Inc.
3495 Piedmont Road
Building 10, Suite 805
Atlanta, GA 30305
edbaker@scottmadden.com
O: 404-814-0020 M: 678-488-8142
CONTACT US
31

More Related Content

What's hot

Finance Technologies: Buy or Rent
Finance Technologies: Buy or RentFinance Technologies: Buy or Rent
Finance Technologies: Buy or Rent
ScottMadden, Inc.
 
Community Solar: Overview of an Emerging Growth Market
Community Solar: Overview of an Emerging Growth MarketCommunity Solar: Overview of an Emerging Growth Market
Community Solar: Overview of an Emerging Growth Market
ScottMadden, Inc.
 
Designing a Program that Increases Your Intelligent Automation “Velocity”
Designing a Program that Increases Your Intelligent Automation “Velocity”Designing a Program that Increases Your Intelligent Automation “Velocity”
Designing a Program that Increases Your Intelligent Automation “Velocity”
ScottMadden, Inc.
 
Coal Combustion Residuals: Understanding the Final Rule and Next Steps for El...
Coal Combustion Residuals: Understanding the Final Rule and Next Steps for El...Coal Combustion Residuals: Understanding the Final Rule and Next Steps for El...
Coal Combustion Residuals: Understanding the Final Rule and Next Steps for El...
ScottMadden, Inc.
 
The Electric Vehicle Market: Utility Perspective and Considerations for Utili...
The Electric Vehicle Market: Utility Perspective and Considerations for Utili...The Electric Vehicle Market: Utility Perspective and Considerations for Utili...
The Electric Vehicle Market: Utility Perspective and Considerations for Utili...
ScottMadden, Inc.
 
Value of Strategic Direction
Value of Strategic DirectionValue of Strategic Direction
Value of Strategic Direction
ScottMadden, Inc.
 
Benchmarking for Natural Gas LDCs
Benchmarking for Natural Gas LDCsBenchmarking for Natural Gas LDCs
Benchmarking for Natural Gas LDCs
ScottMadden, Inc.
 
Six sigma
Six sigmaSix sigma
ScottMadden Fossil Benchmarking Analysis
ScottMadden Fossil Benchmarking Analysis ScottMadden Fossil Benchmarking Analysis
ScottMadden Fossil Benchmarking Analysis
ScottMadden, Inc.
 
ScottMadden Fossil Benchmarking Analysis
ScottMadden Fossil Benchmarking Analysis ScottMadden Fossil Benchmarking Analysis
ScottMadden Fossil Benchmarking Analysis
ScottMadden, Inc.
 
Capital Program Assessment Overview
Capital Program Assessment OverviewCapital Program Assessment Overview
Capital Program Assessment Overview
ScottMadden, Inc.
 
Combined Cycles
Combined CyclesCombined Cycles
Combined Cycles
ScottMadden, Inc.
 
ScottMadden HR Shared Services Benchmarking Study Highlights 2019
ScottMadden HR Shared Services Benchmarking Study Highlights 2019ScottMadden HR Shared Services Benchmarking Study Highlights 2019
ScottMadden HR Shared Services Benchmarking Study Highlights 2019
ScottMadden, Inc.
 
ScottMadden Finance Shared Services Benchmark Highlights 2020
ScottMadden Finance Shared Services Benchmark Highlights 2020ScottMadden Finance Shared Services Benchmark Highlights 2020
ScottMadden Finance Shared Services Benchmark Highlights 2020
ScottMadden, Inc.
 
Miami University 2018 Cleveland Research Company Stock Pitch Competition
Miami University 2018 Cleveland Research Company Stock Pitch CompetitionMiami University 2018 Cleveland Research Company Stock Pitch Competition
Miami University 2018 Cleveland Research Company Stock Pitch Competition
Nhat Pham
 
Benchmarking for Natural Gas LDCs
Benchmarking for Natural Gas LDCsBenchmarking for Natural Gas LDCs
Benchmarking for Natural Gas LDCs
ScottMadden, Inc.
 
Fossil Benchmarking Analysis
Fossil Benchmarking AnalysisFossil Benchmarking Analysis
Fossil Benchmarking Analysis
ScottMadden, Inc.
 
IT Infrastructure Outsourcing Helps Shell Lower Costs, Drive Increased Effici...
IT Infrastructure Outsourcing Helps Shell Lower Costs, Drive Increased Effici...IT Infrastructure Outsourcing Helps Shell Lower Costs, Drive Increased Effici...
IT Infrastructure Outsourcing Helps Shell Lower Costs, Drive Increased Effici...
Information Services Group (ISG)
 
in-the-firing-line-en-1603221-2
in-the-firing-line-en-1603221-2in-the-firing-line-en-1603221-2
in-the-firing-line-en-1603221-2
Yasser Mahmud
 
Energy performance contracting guide
Energy performance contracting guideEnergy performance contracting guide
Energy performance contracting guide
Shailesh Joshi
 

What's hot (20)

Finance Technologies: Buy or Rent
Finance Technologies: Buy or RentFinance Technologies: Buy or Rent
Finance Technologies: Buy or Rent
 
Community Solar: Overview of an Emerging Growth Market
Community Solar: Overview of an Emerging Growth MarketCommunity Solar: Overview of an Emerging Growth Market
Community Solar: Overview of an Emerging Growth Market
 
Designing a Program that Increases Your Intelligent Automation “Velocity”
Designing a Program that Increases Your Intelligent Automation “Velocity”Designing a Program that Increases Your Intelligent Automation “Velocity”
Designing a Program that Increases Your Intelligent Automation “Velocity”
 
Coal Combustion Residuals: Understanding the Final Rule and Next Steps for El...
Coal Combustion Residuals: Understanding the Final Rule and Next Steps for El...Coal Combustion Residuals: Understanding the Final Rule and Next Steps for El...
Coal Combustion Residuals: Understanding the Final Rule and Next Steps for El...
 
The Electric Vehicle Market: Utility Perspective and Considerations for Utili...
The Electric Vehicle Market: Utility Perspective and Considerations for Utili...The Electric Vehicle Market: Utility Perspective and Considerations for Utili...
The Electric Vehicle Market: Utility Perspective and Considerations for Utili...
 
Value of Strategic Direction
Value of Strategic DirectionValue of Strategic Direction
Value of Strategic Direction
 
Benchmarking for Natural Gas LDCs
Benchmarking for Natural Gas LDCsBenchmarking for Natural Gas LDCs
Benchmarking for Natural Gas LDCs
 
Six sigma
Six sigmaSix sigma
Six sigma
 
ScottMadden Fossil Benchmarking Analysis
ScottMadden Fossil Benchmarking Analysis ScottMadden Fossil Benchmarking Analysis
ScottMadden Fossil Benchmarking Analysis
 
ScottMadden Fossil Benchmarking Analysis
ScottMadden Fossil Benchmarking Analysis ScottMadden Fossil Benchmarking Analysis
ScottMadden Fossil Benchmarking Analysis
 
Capital Program Assessment Overview
Capital Program Assessment OverviewCapital Program Assessment Overview
Capital Program Assessment Overview
 
Combined Cycles
Combined CyclesCombined Cycles
Combined Cycles
 
ScottMadden HR Shared Services Benchmarking Study Highlights 2019
ScottMadden HR Shared Services Benchmarking Study Highlights 2019ScottMadden HR Shared Services Benchmarking Study Highlights 2019
ScottMadden HR Shared Services Benchmarking Study Highlights 2019
 
ScottMadden Finance Shared Services Benchmark Highlights 2020
ScottMadden Finance Shared Services Benchmark Highlights 2020ScottMadden Finance Shared Services Benchmark Highlights 2020
ScottMadden Finance Shared Services Benchmark Highlights 2020
 
Miami University 2018 Cleveland Research Company Stock Pitch Competition
Miami University 2018 Cleveland Research Company Stock Pitch CompetitionMiami University 2018 Cleveland Research Company Stock Pitch Competition
Miami University 2018 Cleveland Research Company Stock Pitch Competition
 
Benchmarking for Natural Gas LDCs
Benchmarking for Natural Gas LDCsBenchmarking for Natural Gas LDCs
Benchmarking for Natural Gas LDCs
 
Fossil Benchmarking Analysis
Fossil Benchmarking AnalysisFossil Benchmarking Analysis
Fossil Benchmarking Analysis
 
IT Infrastructure Outsourcing Helps Shell Lower Costs, Drive Increased Effici...
IT Infrastructure Outsourcing Helps Shell Lower Costs, Drive Increased Effici...IT Infrastructure Outsourcing Helps Shell Lower Costs, Drive Increased Effici...
IT Infrastructure Outsourcing Helps Shell Lower Costs, Drive Increased Effici...
 
in-the-firing-line-en-1603221-2
in-the-firing-line-en-1603221-2in-the-firing-line-en-1603221-2
in-the-firing-line-en-1603221-2
 
Energy performance contracting guide
Energy performance contracting guideEnergy performance contracting guide
Energy performance contracting guide
 

Similar to Benchmarking for Natural Gas LDCs

Natural Gas Benchmarking
Natural Gas BenchmarkingNatural Gas Benchmarking
Natural Gas Benchmarking
ScottMadden, Inc.
 
BENCHMARKING: How Do You Stack Up Against Your Competition
BENCHMARKING: How Do You Stack Up Against Your CompetitionBENCHMARKING: How Do You Stack Up Against Your Competition
BENCHMARKING: How Do You Stack Up Against Your Competition
CBIZ, Inc.
 
Business Responsibility Reporting
Business Responsibility ReportingBusiness Responsibility Reporting
Business Responsibility Reporting
RSM GC
 
Trc investor presentation 05 13 final
Trc investor presentation 05 13 finalTrc investor presentation 05 13 final
Trc investor presentation 05 13 final
trcsolutions
 
Chase Corp
Chase CorpChase Corp
Chase Corp
Company Spotlight
 
Larsen & Toubro - Outthink 2017 (Strategy Case Competition) - Grand Finale
Larsen & Toubro - Outthink 2017 (Strategy Case Competition) - Grand FinaleLarsen & Toubro - Outthink 2017 (Strategy Case Competition) - Grand Finale
Larsen & Toubro - Outthink 2017 (Strategy Case Competition) - Grand Finale
Anupreet Choudhary
 
ZetaSustain EU.pdf
ZetaSustain EU.pdfZetaSustain EU.pdf
ZetaSustain EU.pdf
MadhavanNampoothiri2
 
Using Internal Benchmarking to drive change on CSR
Using Internal Benchmarking to drive change on CSRUsing Internal Benchmarking to drive change on CSR
Using Internal Benchmarking to drive change on CSR
Dwayne Baraka
 
Internal Benchmarking for CSR at Legal & General
Internal Benchmarking for CSR at Legal & GeneralInternal Benchmarking for CSR at Legal & General
Internal Benchmarking for CSR at Legal & General
valuecsr
 
Five Strategic Priorities: Generation and Transmission Cooperatives
Five Strategic Priorities: Generation and Transmission CooperativesFive Strategic Priorities: Generation and Transmission Cooperatives
Five Strategic Priorities: Generation and Transmission Cooperatives
ScottMadden, Inc.
 
Process engineering economics i industrial engineering management
Process engineering economics i industrial engineering managementProcess engineering economics i industrial engineering management
Process engineering economics i industrial engineering management
Luis Cabrera
 
Necessity Is the Mother Of (Re)Invention
Necessity Is the Mother Of (Re)InventionNecessity Is the Mother Of (Re)Invention
Necessity Is the Mother Of (Re)Invention
accenture
 
INSTRUCTIONS Please read the case first and then answer specificall.docx
INSTRUCTIONS Please read the case first and then answer specificall.docxINSTRUCTIONS Please read the case first and then answer specificall.docx
INSTRUCTIONS Please read the case first and then answer specificall.docx
maoanderton
 
How To Create A Pitch Deck - Sample
How To Create A Pitch Deck - SampleHow To Create A Pitch Deck - Sample
How To Create A Pitch Deck - Sample
Günter Richter
 
Dynamic matjan13presentation
Dynamic matjan13presentationDynamic matjan13presentation
Dynamic matjan13presentation
Company Spotlight
 
Powerpoint Summary of Industry Results for the Supply Chains To Admire Analysis
Powerpoint Summary of Industry Results for the Supply Chains To Admire AnalysisPowerpoint Summary of Industry Results for the Supply Chains To Admire Analysis
Powerpoint Summary of Industry Results for the Supply Chains To Admire Analysis
Lora Cecere
 
Balanced scorecard 1
Balanced scorecard 1Balanced scorecard 1
Balanced scorecard 1
Preeti Bhaskar
 
Balanced scorecard
Balanced scorecardBalanced scorecard
Balanced scorecard
Preeti Bhaskar
 
Sustainability goal setting guide to 7 top third party standards
Sustainability goal setting guide to 7 top third party standardsSustainability goal setting guide to 7 top third party standards
Sustainability goal setting guide to 7 top third party standards
Jackson Seng
 
Energy & Sustainability Goal-Setting: A Guide To 7 Top Third Party Standards
Energy & Sustainability Goal-Setting: A Guide To 7 Top Third Party StandardsEnergy & Sustainability Goal-Setting: A Guide To 7 Top Third Party Standards
Energy & Sustainability Goal-Setting: A Guide To 7 Top Third Party Standards
Leon Pulman
 

Similar to Benchmarking for Natural Gas LDCs (20)

Natural Gas Benchmarking
Natural Gas BenchmarkingNatural Gas Benchmarking
Natural Gas Benchmarking
 
BENCHMARKING: How Do You Stack Up Against Your Competition
BENCHMARKING: How Do You Stack Up Against Your CompetitionBENCHMARKING: How Do You Stack Up Against Your Competition
BENCHMARKING: How Do You Stack Up Against Your Competition
 
Business Responsibility Reporting
Business Responsibility ReportingBusiness Responsibility Reporting
Business Responsibility Reporting
 
Trc investor presentation 05 13 final
Trc investor presentation 05 13 finalTrc investor presentation 05 13 final
Trc investor presentation 05 13 final
 
Chase Corp
Chase CorpChase Corp
Chase Corp
 
Larsen & Toubro - Outthink 2017 (Strategy Case Competition) - Grand Finale
Larsen & Toubro - Outthink 2017 (Strategy Case Competition) - Grand FinaleLarsen & Toubro - Outthink 2017 (Strategy Case Competition) - Grand Finale
Larsen & Toubro - Outthink 2017 (Strategy Case Competition) - Grand Finale
 
ZetaSustain EU.pdf
ZetaSustain EU.pdfZetaSustain EU.pdf
ZetaSustain EU.pdf
 
Using Internal Benchmarking to drive change on CSR
Using Internal Benchmarking to drive change on CSRUsing Internal Benchmarking to drive change on CSR
Using Internal Benchmarking to drive change on CSR
 
Internal Benchmarking for CSR at Legal & General
Internal Benchmarking for CSR at Legal & GeneralInternal Benchmarking for CSR at Legal & General
Internal Benchmarking for CSR at Legal & General
 
Five Strategic Priorities: Generation and Transmission Cooperatives
Five Strategic Priorities: Generation and Transmission CooperativesFive Strategic Priorities: Generation and Transmission Cooperatives
Five Strategic Priorities: Generation and Transmission Cooperatives
 
Process engineering economics i industrial engineering management
Process engineering economics i industrial engineering managementProcess engineering economics i industrial engineering management
Process engineering economics i industrial engineering management
 
Necessity Is the Mother Of (Re)Invention
Necessity Is the Mother Of (Re)InventionNecessity Is the Mother Of (Re)Invention
Necessity Is the Mother Of (Re)Invention
 
INSTRUCTIONS Please read the case first and then answer specificall.docx
INSTRUCTIONS Please read the case first and then answer specificall.docxINSTRUCTIONS Please read the case first and then answer specificall.docx
INSTRUCTIONS Please read the case first and then answer specificall.docx
 
How To Create A Pitch Deck - Sample
How To Create A Pitch Deck - SampleHow To Create A Pitch Deck - Sample
How To Create A Pitch Deck - Sample
 
Dynamic matjan13presentation
Dynamic matjan13presentationDynamic matjan13presentation
Dynamic matjan13presentation
 
Powerpoint Summary of Industry Results for the Supply Chains To Admire Analysis
Powerpoint Summary of Industry Results for the Supply Chains To Admire AnalysisPowerpoint Summary of Industry Results for the Supply Chains To Admire Analysis
Powerpoint Summary of Industry Results for the Supply Chains To Admire Analysis
 
Balanced scorecard 1
Balanced scorecard 1Balanced scorecard 1
Balanced scorecard 1
 
Balanced scorecard
Balanced scorecardBalanced scorecard
Balanced scorecard
 
Sustainability goal setting guide to 7 top third party standards
Sustainability goal setting guide to 7 top third party standardsSustainability goal setting guide to 7 top third party standards
Sustainability goal setting guide to 7 top third party standards
 
Energy & Sustainability Goal-Setting: A Guide To 7 Top Third Party Standards
Energy & Sustainability Goal-Setting: A Guide To 7 Top Third Party StandardsEnergy & Sustainability Goal-Setting: A Guide To 7 Top Third Party Standards
Energy & Sustainability Goal-Setting: A Guide To 7 Top Third Party Standards
 

More from ScottMadden, Inc.

Creating IT Value-A Better Way to Make IT Investment Decisions
Creating IT Value-A Better Way to Make IT Investment DecisionsCreating IT Value-A Better Way to Make IT Investment Decisions
Creating IT Value-A Better Way to Make IT Investment Decisions
ScottMadden, Inc.
 
Overcoming the Challenges of Large Capital Programs/Projects
Overcoming the Challenges of Large Capital Programs/ProjectsOvercoming the Challenges of Large Capital Programs/Projects
Overcoming the Challenges of Large Capital Programs/Projects
ScottMadden, Inc.
 
The ScottMadden Energy Industry Update Webcast: Everything Counts ... In Larg...
The ScottMadden Energy Industry Update Webcast: Everything Counts ... In Larg...The ScottMadden Energy Industry Update Webcast: Everything Counts ... In Larg...
The ScottMadden Energy Industry Update Webcast: Everything Counts ... In Larg...
ScottMadden, Inc.
 
ScottMadden's Energy Industry Update for the 2019 Utility Supply Chain Confer...
ScottMadden's Energy Industry Update for the 2019 Utility Supply Chain Confer...ScottMadden's Energy Industry Update for the 2019 Utility Supply Chain Confer...
ScottMadden's Energy Industry Update for the 2019 Utility Supply Chain Confer...
ScottMadden, Inc.
 
Energy Industry Update Webcast: Don't Stop Believin'
Energy Industry Update Webcast: Don't Stop Believin'Energy Industry Update Webcast: Don't Stop Believin'
Energy Industry Update Webcast: Don't Stop Believin'
ScottMadden, Inc.
 
Technology for HR Shared Services
Technology for HR Shared ServicesTechnology for HR Shared Services
Technology for HR Shared Services
ScottMadden, Inc.
 
Building a Business Case for Shared Services
Building a Business Case for Shared ServicesBuilding a Business Case for Shared Services
Building a Business Case for Shared Services
ScottMadden, Inc.
 
Fundamentals of Designing, Building, & Implementing a Service Delivery Center
Fundamentals of Designing, Building, & Implementing a Service Delivery CenterFundamentals of Designing, Building, & Implementing a Service Delivery Center
Fundamentals of Designing, Building, & Implementing a Service Delivery Center
ScottMadden, Inc.
 
Next Generation Shared Services Centers
Next Generation Shared Services CentersNext Generation Shared Services Centers
Next Generation Shared Services Centers
ScottMadden, Inc.
 
Generation Trends: What are the Impacts on Transmission?
Generation Trends: What are the Impacts on Transmission? Generation Trends: What are the Impacts on Transmission?
Generation Trends: What are the Impacts on Transmission?
ScottMadden, Inc.
 
Overcoming the Challenges of Large Capital Programs/Projects
Overcoming the Challenges of Large Capital Programs/ProjectsOvercoming the Challenges of Large Capital Programs/Projects
Overcoming the Challenges of Large Capital Programs/Projects
ScottMadden, Inc.
 
Shared Services Customer Satisfaction
Shared Services Customer SatisfactionShared Services Customer Satisfaction
Shared Services Customer Satisfaction
ScottMadden, Inc.
 
Shared Services Technologies
Shared Services TechnologiesShared Services Technologies
Shared Services Technologies
ScottMadden, Inc.
 
HR Shared Service Expansion
HR Shared Service ExpansionHR Shared Service Expansion
HR Shared Service Expansion
ScottMadden, Inc.
 
The HR Business Partner
The HR Business PartnerThe HR Business Partner
The HR Business Partner
ScottMadden, Inc.
 
Supply Trends- What are the Impacts on Transmission?
Supply Trends- What are the Impacts on Transmission? Supply Trends- What are the Impacts on Transmission?
Supply Trends- What are the Impacts on Transmission?
ScottMadden, Inc.
 
Coal's Twilight Gets Expensive
Coal's Twilight Gets ExpensiveCoal's Twilight Gets Expensive
Coal's Twilight Gets Expensive
ScottMadden, Inc.
 
The Management of Critical Spares in the Electric & Gas Utility Industry
The Management of Critical Spares in the Electric & Gas Utility IndustryThe Management of Critical Spares in the Electric & Gas Utility Industry
The Management of Critical Spares in the Electric & Gas Utility Industry
ScottMadden, Inc.
 
Greening the Grid: An Overview of the Greening of the U.S. Generation Fleet
Greening the Grid: An Overview of the Greening of the U.S. Generation FleetGreening the Grid: An Overview of the Greening of the U.S. Generation Fleet
Greening the Grid: An Overview of the Greening of the U.S. Generation Fleet
ScottMadden, Inc.
 

More from ScottMadden, Inc. (19)

Creating IT Value-A Better Way to Make IT Investment Decisions
Creating IT Value-A Better Way to Make IT Investment DecisionsCreating IT Value-A Better Way to Make IT Investment Decisions
Creating IT Value-A Better Way to Make IT Investment Decisions
 
Overcoming the Challenges of Large Capital Programs/Projects
Overcoming the Challenges of Large Capital Programs/ProjectsOvercoming the Challenges of Large Capital Programs/Projects
Overcoming the Challenges of Large Capital Programs/Projects
 
The ScottMadden Energy Industry Update Webcast: Everything Counts ... In Larg...
The ScottMadden Energy Industry Update Webcast: Everything Counts ... In Larg...The ScottMadden Energy Industry Update Webcast: Everything Counts ... In Larg...
The ScottMadden Energy Industry Update Webcast: Everything Counts ... In Larg...
 
ScottMadden's Energy Industry Update for the 2019 Utility Supply Chain Confer...
ScottMadden's Energy Industry Update for the 2019 Utility Supply Chain Confer...ScottMadden's Energy Industry Update for the 2019 Utility Supply Chain Confer...
ScottMadden's Energy Industry Update for the 2019 Utility Supply Chain Confer...
 
Energy Industry Update Webcast: Don't Stop Believin'
Energy Industry Update Webcast: Don't Stop Believin'Energy Industry Update Webcast: Don't Stop Believin'
Energy Industry Update Webcast: Don't Stop Believin'
 
Technology for HR Shared Services
Technology for HR Shared ServicesTechnology for HR Shared Services
Technology for HR Shared Services
 
Building a Business Case for Shared Services
Building a Business Case for Shared ServicesBuilding a Business Case for Shared Services
Building a Business Case for Shared Services
 
Fundamentals of Designing, Building, & Implementing a Service Delivery Center
Fundamentals of Designing, Building, & Implementing a Service Delivery CenterFundamentals of Designing, Building, & Implementing a Service Delivery Center
Fundamentals of Designing, Building, & Implementing a Service Delivery Center
 
Next Generation Shared Services Centers
Next Generation Shared Services CentersNext Generation Shared Services Centers
Next Generation Shared Services Centers
 
Generation Trends: What are the Impacts on Transmission?
Generation Trends: What are the Impacts on Transmission? Generation Trends: What are the Impacts on Transmission?
Generation Trends: What are the Impacts on Transmission?
 
Overcoming the Challenges of Large Capital Programs/Projects
Overcoming the Challenges of Large Capital Programs/ProjectsOvercoming the Challenges of Large Capital Programs/Projects
Overcoming the Challenges of Large Capital Programs/Projects
 
Shared Services Customer Satisfaction
Shared Services Customer SatisfactionShared Services Customer Satisfaction
Shared Services Customer Satisfaction
 
Shared Services Technologies
Shared Services TechnologiesShared Services Technologies
Shared Services Technologies
 
HR Shared Service Expansion
HR Shared Service ExpansionHR Shared Service Expansion
HR Shared Service Expansion
 
The HR Business Partner
The HR Business PartnerThe HR Business Partner
The HR Business Partner
 
Supply Trends- What are the Impacts on Transmission?
Supply Trends- What are the Impacts on Transmission? Supply Trends- What are the Impacts on Transmission?
Supply Trends- What are the Impacts on Transmission?
 
Coal's Twilight Gets Expensive
Coal's Twilight Gets ExpensiveCoal's Twilight Gets Expensive
Coal's Twilight Gets Expensive
 
The Management of Critical Spares in the Electric & Gas Utility Industry
The Management of Critical Spares in the Electric & Gas Utility IndustryThe Management of Critical Spares in the Electric & Gas Utility Industry
The Management of Critical Spares in the Electric & Gas Utility Industry
 
Greening the Grid: An Overview of the Greening of the U.S. Generation Fleet
Greening the Grid: An Overview of the Greening of the U.S. Generation FleetGreening the Grid: An Overview of the Greening of the U.S. Generation Fleet
Greening the Grid: An Overview of the Greening of the U.S. Generation Fleet
 

Recently uploaded

E-learning Odoo 17 New features - Odoo 17 Slides
E-learning Odoo 17  New features - Odoo 17 SlidesE-learning Odoo 17  New features - Odoo 17 Slides
E-learning Odoo 17 New features - Odoo 17 Slides
Celine George
 
How to Create & Publish a Blog in Odoo 17 Website
How to Create & Publish a Blog in Odoo 17 WebsiteHow to Create & Publish a Blog in Odoo 17 Website
How to Create & Publish a Blog in Odoo 17 Website
Celine George
 
NAEYC Code of Ethical Conduct Resource Book
NAEYC Code of Ethical Conduct Resource BookNAEYC Code of Ethical Conduct Resource Book
NAEYC Code of Ethical Conduct Resource Book
lakitawilson
 
How To Update One2many Field From OnChange of Field in Odoo 17
How To Update One2many Field From OnChange of Field in Odoo 17How To Update One2many Field From OnChange of Field in Odoo 17
How To Update One2many Field From OnChange of Field in Odoo 17
Celine George
 
modul ajar kelas x bahasa inggris 2024-2025
modul ajar kelas x bahasa inggris 2024-2025modul ajar kelas x bahasa inggris 2024-2025
modul ajar kelas x bahasa inggris 2024-2025
NurFitriah45
 
A beginner’s guide to project reviews - everything you wanted to know but wer...
A beginner’s guide to project reviews - everything you wanted to know but wer...A beginner’s guide to project reviews - everything you wanted to know but wer...
A beginner’s guide to project reviews - everything you wanted to know but wer...
Association for Project Management
 
Parent PD Design for Professional Development .docx
Parent PD Design for Professional Development .docxParent PD Design for Professional Development .docx
Parent PD Design for Professional Development .docx
AntonioJarligoCompra
 
BÀI TẬP BỔ TRỢ 4 KỸ NĂNG TIẾNG ANH LỚP 12 - GLOBAL SUCCESS - FORM MỚI 2025 - ...
BÀI TẬP BỔ TRỢ 4 KỸ NĂNG TIẾNG ANH LỚP 12 - GLOBAL SUCCESS - FORM MỚI 2025 - ...BÀI TẬP BỔ TRỢ 4 KỸ NĂNG TIẾNG ANH LỚP 12 - GLOBAL SUCCESS - FORM MỚI 2025 - ...
BÀI TẬP BỔ TRỢ 4 KỸ NĂNG TIẾNG ANH LỚP 12 - GLOBAL SUCCESS - FORM MỚI 2025 - ...
Nguyen Thanh Tu Collection
 
How to Add a Filter in the Odoo 17 - Odoo 17 Slides
How to Add a Filter in the Odoo 17 - Odoo 17 SlidesHow to Add a Filter in the Odoo 17 - Odoo 17 Slides
How to Add a Filter in the Odoo 17 - Odoo 17 Slides
Celine George
 
1. Importance_of_reducing_postharvest_loss.pptx
1. Importance_of_reducing_postharvest_loss.pptx1. Importance_of_reducing_postharvest_loss.pptx
1. Importance_of_reducing_postharvest_loss.pptx
UmeshTimilsina1
 
View Inheritance in Odoo 17 - Odoo 17 Slides
View Inheritance in Odoo 17 - Odoo 17  SlidesView Inheritance in Odoo 17 - Odoo 17  Slides
View Inheritance in Odoo 17 - Odoo 17 Slides
Celine George
 
What is Packaging of Products in Odoo 17
What is Packaging of Products in Odoo 17What is Packaging of Products in Odoo 17
What is Packaging of Products in Odoo 17
Celine George
 
Cómo crear video-tutoriales con ScreenPal (2 de julio de 2024)
Cómo crear video-tutoriales con ScreenPal (2 de julio de 2024)Cómo crear video-tutoriales con ScreenPal (2 de julio de 2024)
Cómo crear video-tutoriales con ScreenPal (2 de julio de 2024)
Cátedra Banco Santander
 
FINAL MATATAG Kindergarten CG 2023 pdf
FINAL MATATAG Kindergarten CG 2023   pdfFINAL MATATAG Kindergarten CG 2023   pdf
FINAL MATATAG Kindergarten CG 2023 pdf
maricelrudela
 
SEQUNCES Lecture_Notes_Unit4_chapter11_sequence
SEQUNCES  Lecture_Notes_Unit4_chapter11_sequenceSEQUNCES  Lecture_Notes_Unit4_chapter11_sequence
SEQUNCES Lecture_Notes_Unit4_chapter11_sequence
Murugan Solaiyappan
 
matatag curriculum education for Kindergarten
matatag curriculum education for Kindergartenmatatag curriculum education for Kindergarten
matatag curriculum education for Kindergarten
SarahAlie1
 
Power of Ignored Skills: Change the Way You Think and Decide by Manoj Tripathi
Power of Ignored Skills: Change the Way You Think and Decide by Manoj TripathiPower of Ignored Skills: Change the Way You Think and Decide by Manoj Tripathi
Power of Ignored Skills: Change the Way You Think and Decide by Manoj Tripathi
Pankaj523992
 
modul ajar kelas x bahasa inggris 24/254
modul ajar kelas x bahasa inggris 24/254modul ajar kelas x bahasa inggris 24/254
modul ajar kelas x bahasa inggris 24/254
NurFitriah45
 
How to Manage Large Scrollbar in Odoo 17 POS
How to Manage Large Scrollbar in Odoo 17 POSHow to Manage Large Scrollbar in Odoo 17 POS
How to Manage Large Scrollbar in Odoo 17 POS
Celine George
 
How to Manage Shipping Connectors & Shipping Methods in Odoo 17
How to Manage Shipping Connectors & Shipping Methods in Odoo 17How to Manage Shipping Connectors & Shipping Methods in Odoo 17
How to Manage Shipping Connectors & Shipping Methods in Odoo 17
Celine George
 

Recently uploaded (20)

E-learning Odoo 17 New features - Odoo 17 Slides
E-learning Odoo 17  New features - Odoo 17 SlidesE-learning Odoo 17  New features - Odoo 17 Slides
E-learning Odoo 17 New features - Odoo 17 Slides
 
How to Create & Publish a Blog in Odoo 17 Website
How to Create & Publish a Blog in Odoo 17 WebsiteHow to Create & Publish a Blog in Odoo 17 Website
How to Create & Publish a Blog in Odoo 17 Website
 
NAEYC Code of Ethical Conduct Resource Book
NAEYC Code of Ethical Conduct Resource BookNAEYC Code of Ethical Conduct Resource Book
NAEYC Code of Ethical Conduct Resource Book
 
How To Update One2many Field From OnChange of Field in Odoo 17
How To Update One2many Field From OnChange of Field in Odoo 17How To Update One2many Field From OnChange of Field in Odoo 17
How To Update One2many Field From OnChange of Field in Odoo 17
 
modul ajar kelas x bahasa inggris 2024-2025
modul ajar kelas x bahasa inggris 2024-2025modul ajar kelas x bahasa inggris 2024-2025
modul ajar kelas x bahasa inggris 2024-2025
 
A beginner’s guide to project reviews - everything you wanted to know but wer...
A beginner’s guide to project reviews - everything you wanted to know but wer...A beginner’s guide to project reviews - everything you wanted to know but wer...
A beginner’s guide to project reviews - everything you wanted to know but wer...
 
Parent PD Design for Professional Development .docx
Parent PD Design for Professional Development .docxParent PD Design for Professional Development .docx
Parent PD Design for Professional Development .docx
 
BÀI TẬP BỔ TRỢ 4 KỸ NĂNG TIẾNG ANH LỚP 12 - GLOBAL SUCCESS - FORM MỚI 2025 - ...
BÀI TẬP BỔ TRỢ 4 KỸ NĂNG TIẾNG ANH LỚP 12 - GLOBAL SUCCESS - FORM MỚI 2025 - ...BÀI TẬP BỔ TRỢ 4 KỸ NĂNG TIẾNG ANH LỚP 12 - GLOBAL SUCCESS - FORM MỚI 2025 - ...
BÀI TẬP BỔ TRỢ 4 KỸ NĂNG TIẾNG ANH LỚP 12 - GLOBAL SUCCESS - FORM MỚI 2025 - ...
 
How to Add a Filter in the Odoo 17 - Odoo 17 Slides
How to Add a Filter in the Odoo 17 - Odoo 17 SlidesHow to Add a Filter in the Odoo 17 - Odoo 17 Slides
How to Add a Filter in the Odoo 17 - Odoo 17 Slides
 
1. Importance_of_reducing_postharvest_loss.pptx
1. Importance_of_reducing_postharvest_loss.pptx1. Importance_of_reducing_postharvest_loss.pptx
1. Importance_of_reducing_postharvest_loss.pptx
 
View Inheritance in Odoo 17 - Odoo 17 Slides
View Inheritance in Odoo 17 - Odoo 17  SlidesView Inheritance in Odoo 17 - Odoo 17  Slides
View Inheritance in Odoo 17 - Odoo 17 Slides
 
What is Packaging of Products in Odoo 17
What is Packaging of Products in Odoo 17What is Packaging of Products in Odoo 17
What is Packaging of Products in Odoo 17
 
Cómo crear video-tutoriales con ScreenPal (2 de julio de 2024)
Cómo crear video-tutoriales con ScreenPal (2 de julio de 2024)Cómo crear video-tutoriales con ScreenPal (2 de julio de 2024)
Cómo crear video-tutoriales con ScreenPal (2 de julio de 2024)
 
FINAL MATATAG Kindergarten CG 2023 pdf
FINAL MATATAG Kindergarten CG 2023   pdfFINAL MATATAG Kindergarten CG 2023   pdf
FINAL MATATAG Kindergarten CG 2023 pdf
 
SEQUNCES Lecture_Notes_Unit4_chapter11_sequence
SEQUNCES  Lecture_Notes_Unit4_chapter11_sequenceSEQUNCES  Lecture_Notes_Unit4_chapter11_sequence
SEQUNCES Lecture_Notes_Unit4_chapter11_sequence
 
matatag curriculum education for Kindergarten
matatag curriculum education for Kindergartenmatatag curriculum education for Kindergarten
matatag curriculum education for Kindergarten
 
Power of Ignored Skills: Change the Way You Think and Decide by Manoj Tripathi
Power of Ignored Skills: Change the Way You Think and Decide by Manoj TripathiPower of Ignored Skills: Change the Way You Think and Decide by Manoj Tripathi
Power of Ignored Skills: Change the Way You Think and Decide by Manoj Tripathi
 
modul ajar kelas x bahasa inggris 24/254
modul ajar kelas x bahasa inggris 24/254modul ajar kelas x bahasa inggris 24/254
modul ajar kelas x bahasa inggris 24/254
 
How to Manage Large Scrollbar in Odoo 17 POS
How to Manage Large Scrollbar in Odoo 17 POSHow to Manage Large Scrollbar in Odoo 17 POS
How to Manage Large Scrollbar in Odoo 17 POS
 
How to Manage Shipping Connectors & Shipping Methods in Odoo 17
How to Manage Shipping Connectors & Shipping Methods in Odoo 17How to Manage Shipping Connectors & Shipping Methods in Odoo 17
How to Manage Shipping Connectors & Shipping Methods in Odoo 17
 

Benchmarking for Natural Gas LDCs

  • 1. Copyright © 2021 by ScottMadden, Inc. All rights reserved. Natural Gas Benchmarking Overview and Example Report
  • 2. Copyright © 2021 by ScottMadden, Inc. All rights reserved. 1 01 02 03 CONTENTS Why Engage in Benchmarking? Example Report ScottMadden – Who We Are
  • 3. Why Engage in Benchmarking? 2
  • 4. Copyright © 2021 by ScottMadden, Inc. All rights reserved. 3 Why Engage in Benchmarking? Energy companies face increasing challenges: n Aging infrastructure n Declining return on equity (ROE) and increasing regulatory scrutiny n Ongoing cost control pressure n Industry uncertainty n Growth potential n Environmental compliance demands n Aging labor force n External impacts on business operations Corporate Direction Benchmarking Competitive Analysis Set Strategic Direction n Mission and vision n Performance goals n Initiatives Develop Business Plans n Sites n Departments n Regions Build Supporting Plans n Projects n Training n Expansion n Workforce development n Process improvement n Communications Manage Performance n Managing n Reporting Manage Organization n Monthly management meetings n Quarterly business planning review Report Results n Performance n Financial n Project Benefits: n Provides insight on performance and helps identify improvement opportunities n Enables companies to set stretch goals and learn from best performers through external objective reviews n Serves as an integral part of managing the business Assessing business performance through benchmarking can help identify performance gaps and improvement opportunities. Benchmarking is a key part of the business management process.
  • 5. Copyright © 2021 by ScottMadden, Inc. All rights reserved. $- $500 $1,000 $1,500 $2,000 $2,500 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Annual Capital Expenditures - 9 Publicly-Traded Gas Utilities 4 Example Industry Challenge: Aging Infrastructure n Much of the U.S. pipeline infrastructure is aging; more than a third is 40 years or older. n Pipeline safety, a top priority for the gas industry, is driving investments to improve system integrity. n Recent high-profile incidents have highlighted the need for such improvements. n As a result, capital expenditures among gas utilities have increased significantly. – The growth rate in CapEx for this group was 22% higher in 2012 than in 2011. – Forecasts indicate this trend continuing in 2013. 0 50,000 100,000 150,000 200,000 250,000 Pre-1940 1940- 1949 1950- 1959 1960- 1969 1970- 1979 1980- 1989 1990- 1999 2000- 2009 2010- present Unknown Miles of Pipeline Onshore Gas Distribution Pipeline Construction by Decade and Region (miles) 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 Pre-1940 1940- 1949 1950- 1959 1960- 1969 1970- 1979 1980- 1989 1990- 1999 2000- 2009 2010- present Unknown Miles of Pipeline Onshore Gas Transmission Pipeline Construction by Decade and Region (miles) Source: PHMSA Source: PHMSA ~31% ~55% Source: SNL
  • 6. Copyright © 2021 by ScottMadden, Inc. All rights reserved. 5 Example Industry Challenge: Declining ROE Rate cases have increased consistently since 2000, but authorized ROEs continue to decline. n In 2017, rate case filings were at the second highest point in 18 years. n Gas allowed ROEs are just above the lowest point in 18 years. 2017 median authorized ROEs are nearly 200 basis points below those reported in 2000. n Contributing factors for this trend include: – Increased levels of planned capital expenditures for renewal of aging infrastructure – Declining natural gas consumption – Increasing energy efficiency in homes Sources: ScottMadden analysis; S&P Global Market Intelligence Earning authorized returns is challenging. n Two-thirds of gas utilities’ earned ROEs are below what is authorized. n The median of earned ROE as a percentage of allowed ROE is 97.9%. 8.5 9.0 9.5 10.0 10.5 11.0 11.5 9 19 29 39 49 59 69 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Authorized ROE No. of Rate Cases Rate Cases and Authorized ROE (1999-2017) #of Gas Rate Cases Gas ROE
  • 7. Copyright © 2021 by ScottMadden, Inc. All rights reserved. 6 Our Benchmarking Approach Our benchmarking analysis is based on publicly available data with metrics and peer groups developed based on ScottMadden’s insight and the client’s input. The analysis can take three to six weeks to complete depending on the level of client involvement and input needed. We tailor the schedule to our clients’ requirements. An illustrative timeline is below. Objectives and Planning n Confirm objectives of study n Define plan and schedule n Select metrics based on objectives n Develop benchmarking panel and vet with client Data Gathering and Analysis n Assemble benchmarking data n Develop analyses and conduct additional research as needed Insight Development n Develop findings n Highlight leading and lagging areas of performance Presentation of Results n Review results n Validate opportunities for improvement n Identify areas for more detailed assessment Phase Week 1 Week 2 Week 3 Week 4 Objectives and Planning Data Gathering and Analysis Insight Development Presentation of Results Typical fees for this effort are approximately $35,000.
  • 9. Copyright © 2021 by ScottMadden, Inc. All rights reserved. 8 01 REPORT CONTENTS Introduction Summary of Initial Observations 02 Overview of Panel Companies 03 Financial Performance 04 Operational Performance 05 Potential Improvement Opportunities 06 An example report with illustrative data follows
  • 10. Copyright © 2021 by ScottMadden, Inc. All rights reserved. Approach n A panel of 12 natural gas companies, including the Company, was selected as the benchmarking peer group for comparison purposes. – Company size, location, and system characteristics are the primary considerations for peer companies. n This report is focused on key measures that provide a snapshot of financial and operational performance compared to peers. – Financial metrics were obtained from FERC Form 2 reports or annual reports submitted to state commissions. – Operational data (e.g., miles of main, number of services, leaks repaired) were obtained from the Department of Transportation’s (DOT) annual operator reports. n Potential focus areas for improvement can be derived from the benchmarking results. – Where applicable, key industry trends, compiled from ScottMadden’s observations and research, provide context to the benchmarking comparison, 9 Introduction Overview n The objective of this review is to provide high-level financial and operating comparisons that will help the Company’s* management identify potential opportunities for improvement. n While benchmarking can point to good practices and best-of-class results, it is not “the answer.” Instead, the benchmarking process itself provides a platform for dialogue about key management questions: – What are the appropriate measures of performance? – Where do we stand relative to those measures, and who are the “best”? – What are others doing, and what should we be doing to improve? – How will we institute those improvement initiatives, and how will we measure success? * “The Company” is the subject of the benchmarking effort.
  • 11. Copyright © 2021 by ScottMadden, Inc. All rights reserved. 10 Summary of Initial Observations* Benchmarking Results 1. Revenue (net of production) per customer is above the median and higher than comparable peers. While customer growth is relatively flat, the Company is keeping pace with the peer companies. 2. The Company is below the median in terms of level of investment in its system. 3. Results for operation and maintenance (O&M) expenses are mixed. – Non-production O&M expense is relatively high on a per mile of main basis but below the median on a per employee basis. – Administrative and general (A&G) expense is at the peer median while distribution expenses are high compared to the peer panel. 4. The Company’s distribution system is ranked high in the peer panel, with its relatively high percentage of older vintage mains and services. * The initial observations throughout this report can be refined after discussion with management to better understand the context (i.e., the “whys” and the “so what's”).
  • 12. Copyright © 2021 by ScottMadden, Inc. All rights reserved. 11 Overview of Panel Companies A group of comparable peer utilities was selected based on similarities in scale, region, organizational structure, and other system operational and design characteristics (e.g., multiple opcos under one holding company, whether or not the service territories were contiguous, whether or not they own upstream assets, pipe constructed of one predominant material, etc.) to the degree possible to ensure a like-in-kind basis of comparison for the benchmarking analysis. Company Customers Throughput (Mcf 000s) Operating Revenue ($000s) Utility A 694,391 68,938 644,474 Utility B 1,198,791 70,562 241,798 Utility C 918,283 80,535 1,178,102 Utility D 1,471,249 191,566 1,550,240 Utility E 544,205 48,138 380,935 Utility F 1,048,626 101,729 808,334 Utility G 431,181 12,656 369,353 Utility H 427,483 38,319 480,854 Utility I 1,881,576 210,244 1,064,301 Utility J 426,078 46,644 446,201 Utility K 656,743 79,349 909,192 The Company 686,256 85,644 424,256 NOTE: Customers, throughput, and operating revenue reflect year-end 2019 data.
  • 13. Copyright © 2021 by ScottMadden, Inc. All rights reserved. 12 Gas Revenue per Customer and Growth Benchmarking Results – Revenue and Growth n Overall, growth rates for the panel companies are fairly flat and reflect the challenging economy. n The customer growth rate for the Company is at the median of the panel (about 0.2%). n Revenue net of production reflects what is received for the delivery of gas; commodity costs have been removed from this number. – Note: Quartiles and median are based on revenue net of production. n The Company was at the top quartile compared to peer companies on a revenue net of production per customer basis. Top Quartile Median Bottom Quartile $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 U t i l i t y H U t i l i t y N U t i l i t y B C o m p a n y U t i l i t y C U t i l i t y G U t i l i t y A U t i l i t y R U t i l i t y S U t i l i t y I U t i l i t y P U t i l i t y F U t i l i t y K U t i l i t y J U t i l i t y E Revenue per Customer -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% U t i l i t y N U t i l i t y C U t i l i t y F U t i l i t y A C o m p a n y U t i l i t y B U t i l i t y K U t i l i t y I U t i l i t y G U t i l i t y J U t i l i t y S U t i l i t y E U t i l i t y H U t i l i t y P U t i l i t y R Customer Growth – 5 Year CAGR Better
  • 14. Copyright © 2021 by ScottMadden, Inc. All rights reserved. 13 Net Utility Plant Benchmarking Results – Revenue and Growth n Net utility plant reflects end-of-year total plant less accumulated depreciation expense. n The Company was slightly above comparable peers in net plant per mile of main and per customer. n The Company is just below the median for 5 Year CAGR, which indicates that the company has been investing less in its infrastructure than the peer panel. Top Quartile Median Bottom Quartile 0% 5% 10% 15% 20% U t i l i t y A U t i l i t y P U t i l i t y I U t i l i t y H U t i l i t y E U t i l i t y N U t i l i t y S U t i l i t y O C o m p a n y U t i l i t y F U t i l i t y J Net Gas Utility Plant – 5 Year CAGR $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 U t i l i t y H U t i l i t y N U t i l i t y A U t i l i t y J U t i l i t y E U t i l i t y P U t i l i t y I U t i l i t y S C o m p a n y U t i l i t y F Net Utility Plant per Customer $0 $100 $200 $300 $400 $500 $600 $700 $800 U t i l i t y H U t i l i t y N U t i l i t y B U t i l i t y A U t i l i t y M U t i l i t y J U t i l i t y L U t i l i t y E U t i l i t y I C o m p a n y U t i l i t y R U t i l i t y P U t i l i t y F Net Utility Plant per Mile of Main
  • 15. Copyright © 2021 by ScottMadden, Inc. All rights reserved. 14 Total Non-Production O&M Benchmarking Results – Cost n The Company was above most comparable peers based on total non-production O&M expense per customer. A&G cost appears to be a driver for this metric. n However, the Company was below most comparable peers on a per mile of main basis. n The Company was one of the lowest to comparable peers based on total non-production O&M expense per employee. $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 U t i l i t y I U t i l i t y H U t i l i t y N U t i l i t y A U t i l i t y E U t i l i t y G U t i l i t y K U t i l i t y S U t i l i t y O U t i l i t y J C o m p a n y U t i l i t y F U t i l i t y P Total Non-Production O&M Expense Distribution Transmission Underground Storage Other Storage Administrative & General Customer Accounts Customer Svc. & Info. Sales $0 $100 $200 $300 $400 $500 $600 $700 U t i l i t y G U t i l i t y A U t i l i t y N U t i l i t y I U t i l i t y H U t i l i t y P U t i l i t y S U t i l i t y B C o m p a n y U t i l i t y K U t i l i t y C U t i l i t y J U t i l i t y F U t i l i t y E Total Non-Production O&M Expense per Customer $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 U t i l i t y A U t i l i t y N U t i l i t y G U t i l i t y I C o m p a n y U t i l i t y B U t i l i t y C U t i l i t y D U t i l i t y J U t i l i t y P U t i l i t y K U t i l i t y H U t i l i t y E U t i l i t y F Total Non-Production O&M per Mile of Main Better
  • 16. Copyright © 2021 by ScottMadden, Inc. All rights reserved. $0 $50 $100 $150 $200 $250 $300 U t i l i t y K U t i l i t y B U t i l i t y N U t i l i t y C U t i l i t y A U t i l i t y G C o m p a n y U t i l i t y F U t i l i t y I U t i l i t y O U t i l i t y H U t i l i t y S U t i l i t y R U t i l i t y Q U t i l i t y P U t i l i t y E Total A&G Expense per Employee $0 $50 $100 $150 $200 $250 $300 $350 U t i l i t y B U t i l i t y N U t i l i t y G U t i l i t y A U t i l i t y C U t i l i t y K U t i l i t y H C o m p a n y U t i l i t y I U t i l i t y S U t i l i t y D U t i l i t y L U t i l i t y J U t i l i t y F U t i l i t y P U t i l i t y E Total A&G Expense per Customer 15 A&G O&M Benchmarking Results – Cost n We provide more detailed analyses of A&G expenses, as this is one of the largest components of total non-production O&M. n Higher A&G expense per customer for the Company is driven primarily by employee pensions and benefits, outside services, and salaries. n A&G O&M expense per employee for the Company was above the median and comparable peers. Top Quartile Median Bottom Quartile Better
  • 17. Copyright © 2021 by ScottMadden, Inc. All rights reserved. 16 Distribution O&M Benchmarking Results – Cost n Distribution is another major component of non-production O&M expense. n The Company’s distribution O&M expense per mile of main and per customer are lower than the majority of the panel, likely because of the Company’s high percentage of newer pipe (see following page). Top Quartile Median Bottom Quartile $0 $50 $100 $150 $200 $250 U t i l i t y P U t i l i t y A U t i l i t y H U t i l i t y S U t i l i t y G U t i l i t y N C o m p a n y U t i l i t y I U t i l i t y J U t i l i t y E U t i l i t y K U t i l i t y F U t i l i t y D U t i l i t y C U t i l i t y B Distribution O&M Expense per Customer $0 $2 $4 $6 $8 $10 $12 $14 $16 U t i l i t y A U t i l i t y G U t i l i t y N U t i l i t y P U t i l i t y I U t i l i t y J C o m p a n y U t i l i t y C U t i l i t y E U t i l i t y B U t i l i t y D U t i l i t y M U t i l i t y Q U t i l i t y K U t i l i t y L U t i l i t y F Distribution O&M Expense per Mile of Main Better
  • 18. Copyright © 2021 by ScottMadden, Inc. All rights reserved. 17 Composition of Gas Distribution System Benchmarking Results – Operational n The Company has a high percentage of services that were installed prior to 1940 or are of an unknown vintage. n Like mains, the vintage and composition of services by material are determinants of system performance and maintenance expenses. n More than half of the Company’s distribution mains were installed prior to 1989, and 33% of the Company’s mains were installed prior to 1970. n The vintage and composition of distribution mains by material type can drive system performance and maintenance expenses (leaks, etc.). 0% 20% 40% 60% 80% 100% Utility F Utility J Utility R Utility D Utility G Company Utility M Utility A Utility I Utility K Utility B Utility H Utility P Utility Q Utility N Utility E Utility C Distribution Mains by Vintage %Pre-1940 & Unknown %1940 to 1949 %1950 to 1959 %1960-1969 %1970-1979 %1980 to 1989 %1990 to 1999 %2000 to 2009 %2010 to 2019 0% 20% 40% 60% 80% 100% Utility D Utility M Utility J Utility H Utility N Utility F Company Utility R Utility K Utility A Utility B Utility Q Utility G Utility I Utility P Utility C Utility E Distribution Services by Vintage Pre-1940 & Unknown 1940 to 1949 1950 to 1959 1960 to 1969 1970 to 1979 1980 to 1989 1990 to 1999 2000 to 2009 2010 to 2019
  • 19. Copyright © 2021 by ScottMadden, Inc. All rights reserved. 0 2000 4000 6000 8000 U t i l i t y I U t i l i t y A U t i l i t y E U t i l i t y G U t i l i t y P U t i l i t y N U t i l i t y B U t i l i t y Q U t i l i t y M C o m p a n y U t i l i t y K U t i l i t y F U t i l i t y R U t i l i t y J U t i l i t y D U t i l i t y L U t i l i t y L Main Leaks by Cause Corrosion Failure Pipe, Weld, or Joint Failure Natural Force Damage Equipment Failure Excavation Damage Incorrect Operation Other Outside Force Damage Other 0 2 4 6 8 10 12 U t i l i t y F U t i l i t y J U t i l i t y A U t i l i t y H U t i l i t y K U t i l i t y P U t i l i t y E U t i l i t y C U t i l i t y B U t i l i t y N U t i l i t y I U t i l i t y G U t i l i t y M U t i l i t y Q U t i l i t y D C o m p a n y U t i l i t y R U t i l i t y O Service Leaks per Thousand Services 0 200 400 600 800 1,000 1,200 1,400 1,600 U t i l i t y H U t i l i t y C U t i l i t y P U t i l i t y A U t i l i t y Q U t i l i t y G U t i l i t y B C o m p a n y U t i l i t y I U t i l i t y N U t i l i t y E U t i l i t y M U t i l i t y J U t i l i t y F U t i l i t y K U t i l i t y R U t i l i t y D Main Leaks per Thousand Miles of Main n The Company is close to or below the peer median in each measure related to leaks. n The Company experienced a comparatively higher number of main leaks compared to service links, and the majority of main leaks resulted from corrosion failures and natural force damage. Better Better 18 Main and Service Leaks Benchmarking Results – Operational Top Quartile Median Bottom Quartile Better
  • 20. Copyright © 2021 by ScottMadden, Inc. All rights reserved. 19 Pipeline Incidents by Cause Benchmarking Results – Operational n The Company had three significant incidents over the previous 10 years; four peer utilities experienced the same or fewer incidents, while nine peer utilities experienced a higher number of incidents over the same timeframe. NOTE: Significant incidents meet one or more of the following criteria: n Fatality or injury requiring in- patient hospitalization n $50,000 or more in total costs n Highly-volatile liquid releases of five barrels or more or other liquid releases of 50 barrels or more n Liquid releases resulting in an unintentional fire or explosion Better $0 $2 $4 $6 $8 $10 $12 $14 $16 $18 $20 0 5 10 15 20 25 U t i l i t y B U t i l i t y L U t i l i t y S U t i l i t y P C o m p a n y U t i l i t i y O U t i l i t y J U t i l i t i y M U t i l i t y R U t i l i t y K U t i l i t y A U t i l i t y E U t i l i t y I U t i l i t i y N Estimated Property Damage ($M) No. of Significant Incidents Pipeline Incidents by Cause and Total Property Damage (2010-2020) Corrosion Failure Equipment Failure Excavation Damage Incorrect Operation Material Failure of Pipe or Weld Natural Force Damage Other Cause Other Outside Force Damage
  • 21. Copyright © 2021 by ScottMadden, Inc. All rights reserved. 610 620 630 640 650 660 670 680 690 700 710 U t i l i t y H U t i l i t y E U t i l i t y K C o m p a n y U t i l i t y F U t i l i t y B U t i l i t y J U t i l i t y A U t i l i t y G U t i l i t y C U t i l i t y D U t i l i t y I J.D. Power Gas Utility Customer Satisfaction Index n The Company’s customer satisfaction rating is just above the median among the peer panel companies. 20 J.D. Power Customer Satisfaction Benchmarking Results – Customer Top Quartile Median Bottom Quartile Better
  • 22. Copyright © 2021 by ScottMadden, Inc. All rights reserved. 21 01 02 03 NEXT STEPS Review results with management and key stakeholders Validate opportunities for improvement (e.g., identify gaps with leading practices) Identify areas for more detailed assessment
  • 23. ScottMadden – Who We Are 22
  • 24. Copyright © 2021 by ScottMadden, Inc. All rights reserved. 23 Who We Are We believe that client success is the best measure of our own success. We listen carefully to our clients’ challenges, concerns, and goals so we can personalize our work and focus on the things most important to their success. We don’t solve problems with canned methodologies— we help our clients solve the right problem in the right way. We do what we say we are going to do with genuine passion, tenacity, and integrity throughout the entire process. ScottMadden is a management consulting firm with more than 35 years of deep, hands- on experience. WHAT IT TAKES W E D O TO GET IT DONE R I G H T
  • 25. Copyright © 2021 by ScottMadden, Inc. All rights reserved. 24 Energy Is Who We Are ScottMadden is a management consulting firm with more than 35 years of deep, hands-on experience. We deliver a broad array of consulting services—from strategic planning through implementation— across the energy utility ecosystem. Our energy practice covers the following areas: TRANSMISSION & DISTRIBUTION GRID EDGE ENERGY MARKETS ENERGY CORPORATE SERVICES GENERATION RATES & REGULATION
  • 26. Copyright © 2021 by ScottMadden, Inc. All rights reserved. 25 Energy Our work for you is experience-based, not theoretical. EXPERIENCE AREAS OF FOCUS We have been serving the energy industry since 1983. Our industry-leading clients trust us with their most important challenges. They know that we have seen and solved a similar problem. Our consultants have earned this confidence through decades of experience in the field, and they are on the front lines of this changing landscape. ScottMadden has worked in every business unit and every department in companies across the energy utility ecosystem. We focus on Transmission & Distribution, the Grid Edge, Generation, Energy Markets, Rates & Regulation, and Energy Corporate Services. SERVICES We have helped our clients develop and implement strategies, improve critical operations, reorganize departments and entire companies, and implement myriad initiatives. Cristin Lyons Practice Area Leader
  • 27. Copyright © 2021 by ScottMadden, Inc. All rights reserved. 26 Our Consulting Approach CONTENT DEEP We know energy and have worked in every business unit and every department in companies across the energy utility ecosystem for more than 35 years. PERSONALIZED We begin by listening to our clients’ situations, challenges, and goals; then we personalize our work to help them succeed. CONTEXTUAL We don’t solve problems with canned methodologies—we help our clients solve the right problem in the right way. COLLABORATIVE We engage our clients like no other firm does, working side by side to produce results. REAL RESULTS Our work is practical and can be put into play immediately. We excel at helping internal stakeholders take ownership to continue producing results after our work is done . At ScottMadden, we work to earn our clients’ trust every day by delivering unparalleled consulting services.
  • 28. Copyright © 2021 by ScottMadden, Inc. All rights reserved. 27 Why ScottMadden? DEEP EXPERTISE n More than 35 years in the energy industry gives us unmatched experience. n Most likely we’ve seen a similar issue or solved a similar problem. PERSONALIZED APPROACH n Before we begin any project, we sit down and listen to our clients’ needs and challenges. n We engage with our clients like no other firm does, working side by side to create practical, real results. n We don’t employ canned methodologies or cookie- cutter solutions. We work to solve the right problem in the right way. PHILOSOPHY n We are personally invested in every project and measure our success by our clients’ success. n We listen to our clients’ needs and put their best interests ahead of our own. n We work with integrity, tenacity, and a genuine passion for what we do. n We do what it takes to get it done right. More than 35 years later, our very first client is still with us today.
  • 29. Copyright © 2021 by ScottMadden, Inc. All rights reserved. 28 Who We Work With We work with clients across the energy utility ecosystem including electric, gas, and water investor-owned utilities, public power entities, RTOs and ISOs, transmission companies, and non-utility organizations. A sample of our clients is shown below. Note: Representative sample; not all-inclusive of clients served. Excludes numerous well-known clients due to confidentiality agreements.
  • 30. Copyright © 2021 by ScottMadden, Inc. All rights reserved. 29 Who We Work With – Gas We work with clients across the energy utility ecosystem, including many gas utility organizations. A sample of our clients is shown below. Note: Representative sample; not all-inclusive of clients served. Excludes numerous well-known clients due to confidentiality agreements.
  • 31. Copyright © 2021 by ScottMadden, Inc. All rights reserved. 30 Gas Representative Qualifications DIVERSIFIED UTILITY Gas Industry Briefing and Benchmarking Analysis ScottMadden worked with a diversified utility after a recent acquisition of three local distribution companies (LDCs) to develop an executive primer on the natural gas industry and the business model for a typical LDC. This engagement also involved a detailed benchmarking analysis that compared the acquired LDCs to regional and national peer panels. MULTIPLE GAS LDCS Business Process Improvement ScottMadden managed large multi-team projects to assess LDCs’ current state processes, functions, and organizations, and we led teams through developing future state designs and business cases to support implementation. ScottMadden provided the methodology, supported project management, facilitated and performed analysis, offered best practices, supported communications and change management, and helped to develop deliverables. Projects improved business results, service levels, and operating efficiencies, increased employee engagement, and helped develop a new culture of continuous improvement. The project was cited in the client’s subsequent Wall Street analyst presentations and annual reports. GAS LDC Organization Analysis ScottMadden conducted an organizational structure analysis for a large gas LDC by comparing current state practices to best practice benchmarks, including spans of control, layers, and cost to manage. The analysis resulted in identification of potential areas of improvement. These opportunities would result in a structure aligned with corporate strategy, efficient decision making, clear accountabilities, increased morale, and the potential for significant savings.
  • 32. Copyright © 2021 by ScottMadden, Inc. All rights reserved. Cristin Lyons Partner and Energy Practice Leader ScottMadden, Inc. 2626 Glenwood Avenue Suite 480 Raleigh, NC 27608 cmlyons@scottmadden.com O: 919-781-4191 M: 919-247-1031 Ed Baker Partner ScottMadden, Inc. 3495 Piedmont Road Building 10, Suite 805 Atlanta, GA 30305 edbaker@scottmadden.com O: 404-814-0020 M: 678-488-8142 CONTACT US 31