Published: January 26, 2023

Concentric is proud to announce several significant team member promotions:

Joshua Nowak was promoted to Vice President. Joshua is a testifying expert on cost of capital matters and lead-lag studies in support of cash working capital requirements.  

Peter Blazunas was promoted to Senior Project Manager. Peter is a testifying expert on rate design as it relates to multiyear rate plans and transportation electrification programs.  

Amanda Nori was promoted to Senior Project Manager. Amanda is a depreciation professional with more than ten years of nuanced experience in the field of depreciation.  

Colin Burns was promoted to Project Manager. Colin is an experienced member of the depreciation team and supports depreciation studies for clients in Canada and the US.  

Bryan Hu was promoted to Consultant. Bryan specializes in financial models related to return on equity, revenue requirements, and market power studies. 

Clara-Ann Joyce was promoted to Consultant. Clara-Ann is involved in engagements covering energy efficiency, utility operations, and M&A due diligence.  

Tara Mou was promoted to Consultant. Tara has experience in utility rate design, energy efficiency, alternative rate mechanisms, and performance benchmarking. 

Pieter Zwart was promoted to Consultant. Pieter has supported engagements related to utility demand forecasting, energy efficiency, resource planning, revenue requirement, and cost of service studies. 

Jack Gross was promoted to Senior Analyst. Jack has recently supported engagements related to strategic M&A support and the fair market valuation of assets. 

Hilary Gardner was promoted to Director of Human Resources. Hilary’s accomplishments include completing an in-depth compensation analysis and implementing a new recruitment applicant tracking and onboarding system to streamline hiring. 

“During this crucial period in the energy industry, our clients are faced with pivotal decisions regarding their core business models,” said John J. Reed, Chairman and Chief Executive Officer of Concentric. “This team of dedicated professionals further enhances Concentric’s dynamic ability to provide insightful, rigorous, and pragmatic advisory services to clients throughout the energy industry.”  

To learn more about life at Concentric visit Careers@Concentric and subscribe to the Concentric Connection to receive industry news and analysis from our team. 

As Concentric’s 20^th anniversary year draws to a close, I want to pause and thank our clients.

You are the engine of our business, and we would not be here without you.

As we look forward to the next twenty years, I am reminded of how much the energy landscape has evolved since the early 2000s and the extraordinary depth of experience and knowledge we offer our clients. From the California energy crisis to today and onward into the future, the Concentric team remains dedicated to providing economic and financial advisory services delivered by the most passionate, experienced, and dedicated consultants in the energy industry.

From the Concentric family to yours, we wish you a prosperous 2023.

And thank you again for helping us get here.

John J. Reed
Chairman and Chief Executive Officer
Concentric Energy Advisors

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Forged by Fire: Concentric Marks 20 Years of Learning from Crisis

Published: December 29, 2022

By: Concentric Staff Writer

It was in the crucible of the California energy crisis of the early 2000s that Concentric Energy Advisors (“Concentric”) was formed, and similar to the challenging environment in the energy industry today, it is in times of crisis when knowledge, experience and opportunities are gained, Concentric Chairman and Chief Executive Officer John Reed said.

Founded in 2002, Marlborough, Massachusetts-based Concentric has since grown from a start-up with less than a year of cash to a thriving employee-owned firm of over 65 employees with two subsidiary companies—CE Capital Advisors and Concentric Advisors ULC. Today, Concentric provides consulting and financial advisory services throughout the U.S. and Canada regarding utilities, wholesale and retail power and natural gas markets, and the oil pipeline industry.

Back in the fourth quarter of 2001, fundamental changes were going on in the energy industry, especially in California energy markets, where allegations of market manipulation and accounting irregularities were coming to light regarding the Houston-based energy firm Enron. Enron was not a minor player in the energy industry. It had 19,000 employees and more than $100 billion in revenues in 2000, according to Forbes.

But Enron claimed a lot of things, and at the end of 2001 when the company’s massive accounting fraud was revealed, Enron went from being the darling of the credit markets to filing for Chapter 11 bankruptcy in December of 2001.

“It was shocking, nobody had ever seen anything like that,” Reed, who has been operating in the industry for 46 years, said in an interview.

In the wake of the September 2001 attacks, a period of turmoil in America occurred, including in U.S. energy markets and other industries Enron was involved in, like water and broadband. This resulted in a coincident financial crisis, and nobody knew what kind of industry would emerge after the “merchant meltdown” of late 2001, Reed said.

It wasn’t just that Enron went under, but its contractual counterparties were now suffering. In a 12-month period, bankruptcies or near-bankruptcies occurred for other huge companies such NRG, Dynegy, Reliant, Calpine, and Mirant.

“It was kind of a spooky time to try to start your own business,” Reed said, adding that his new company had to plan for a rocky beginning. “All it takes is for one big player to go down, and suddenly every other player finds they are holding potentially worthless paper … it goes on and on and on.”

But Reed felt that despite the accounting irregularities at Enron, other companies were unlikely to have engaged in similar activities and would likely bounce back, which gave him faith. What followed in the wake of Enron was a new law known as Sarbanes-Oxley and a host of new regulations regarding accounting, financial reporting, credit and other business practices such as natural gas and power contracting.

One of Concentric’s earliest clients was the state of California, which was trying to ferret out parties that were engaging in market manipulation, Reed said. Concentric became an expert for the state looking for improprieties and illegal behavior, requiring Concentric to begin investigating companies that formerly had been clients. This was one of the most challenging aspects of launching the new business and positioning it in the rapidly changing marketplace, he said.

“We found ourselves right in the midst of all that,” Reed said.

At the time, the industry was navigating the post-Enron waters, which meant flipping certain accepted business practices on their heads. In one case he worked with a company to voluntarily set rates in a way that wouldn’t recover higher costs resulting from an affiliate’s bankruptcy resulting from the 2001 energy crisis. This meant executives had to be convinced to take a financial hit and move on—and they listened.

The ensuing years saw new crises, such as the financial crisis of 2008 that had outsize impacts on the energy industry, and to a lesser extent, the upheaval in 2016. But nothing compared to the simultaneous crises occurring in 2000 and 2001, Reed said.

The industry grew and learned from those experiences—“it wasn’t easy, and it wasn’t painless, but it was dramatic.”

Today, it’s spiking natural gas prices and reliability issues in places like California, Texas, and the Northeast that will have almost as much impact as the crisis of the early 2000s. During Winter Storm Uri in February 2021, some utilities expended their entire natural gas purchasing budgets for an entire year over a few days. This required utilities to rush to capital markets and stress over getting approval for cost recovery from regulators—and this often requires consultation with firms such as Concentric.

Similar to the early 2000s, 2021 and 2022 “were a sea change. It was a demarcation point where  we very quickly went from a surplus market to a shortage market and recognized that it will likely be a very long time before we can reverse that,” Reed said of the energy shortages and price hikes of the past year and a half.

“The industry is again being offered learning opportunities,” Reed said.

Across the larger industry, it was assumed by some that there would be a predictable and manageable transition to decarbonization of the grid, Reed said, but the events in Texas and global events such as the war in Ukraine, the COVID-19 pandemic and associated supply chain issues have complicated the picture.

“We are seeing greater tension between reliability, decarbonization, and economics than most experts expected, and energy issues are rapidly becoming more political. People vote with their pocketbooks, and economics matter,” Reed said.

Along with high gas and food prices, high energy prices are increasingly becoming an issue, and “affordability is becoming what I would describe as the inconvenient truth right now,” he said.

Whether it be the modern era or recent historical events, Concentric has always been poised for growth, with a strength forged by the constant change in the energy industry and the need to learn from market realities and adapt plans time and time again. That is why the experience and knowledge gained by Concentric over so many years is vitally important.

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All views expressed by the contributors are solely the contributors’ current views and do not reflect the views of Concentric Energy Advisors, Inc., its affiliates, subsidiaries, or related companies. The contributors’ views are based upon information the contributors consider reliable at the time of publication. However, neither Concentric Energy Advisors, Inc., nor its affiliates, subsidiaries, and related companies warrant the information’s completeness or accuracy, and it should not be relied upon as such.

Concentric Energy Advisors is proud to be the presenting sponsor of the 13th Annual Abby’s House 5k, a hybrid virtual/in-person walk/run supporting Abby’s House in Worcester, MA. Abby’s House is a nonprofit organization that provides shelter, support, and advocacy to women, with or without children, escaping abuse or facing homelessness.

Thanks to our fellow sponsors, 5k participants, auction bidders, and individual donors, Abby’s House raised $55,000 through their 2021 hybrid virtual/in-person 5k race. Click here for more information about the 2022 Abby’s House 5k.

Thank you to Team Concentric for another year of faithful support of the AH5k!

Concentric is pleased to welcome William (Bill) Davis as an Assistant Vice President.

Before joining Concentric, Mr. Davis spent 16 years at a significant Midwest electric and gas utility. He is an experienced senior leader and expert witness specializing in renewable energy and the planning, implementation, and evaluation of utility energy efficiency programs. His expertise includes a wide range of regulatory matters, including load research, sales and revenue forecasting, rate design, class cost of service studies, lost revenue recovery, and prudence reviews. Mr. Davis is a member of Public Utilities Fortnightly Under 40 Class of 2020. He holds a B.S. and M.S. in Economics from Illinois State University.

“Bill is an accomplished leader with significant expertise, and he will be an exemplary part of the Concentric family,” said John J. Reed, Chairman and Chief Executive Officer. “Our clients will benefit from Bill’s comprehensive knowledge of utility energy efficiency and renewable energy programs, and broad regulatory background. I am excited to welcome him to our team.”

Concentric is celebrating twenty years of providing exceptional client service. To learn more about life at Concentric visit the careers page, and subscribe to the Concentric Connection to receive industry news and analysis from our team.

Concentric Energy Advisors is pleased to announce that it is celebrating 20 years of client service.

After working together as REED Consulting Group, which was formed in 1988, the team evolved into Concentric Energy Advisors in 2002. Concentric has been a part of some of the most significant events affecting the energy and water industries and has conducted over 2200 projects for more than 750 clients.

Over its many years, Concentric’s focus has never wavered from providing economic and financial advisory services delivered by the most passionate, experienced, and dedicated consultants in the energy space.

“As I reflect on the last twenty years of our industry, I am amazed by all we have accomplished together,” said John J. Reed, Chairman and CEO. “We built on the values and success of REED Consulting Group and created a consultancy that has helped guide the energy industry through the enormous changes of the past two decades, and this anniversary is a testament to that success. We are now positioned and eager to continue our role on the forefront of change for many more years.”

Mr. Reed added that, “Our clients are the heart of our business, and we would not be celebrating today without them. On behalf of the entire Concentric team, thank you to our clients who have continued to entrust us with their projects. As we look forward, I am reminded of how much the energy landscape has changed and the extraordinary depth of experience we offer our clients. I am confident that through the commitment of our employees we will continue to advance our mission of energy, service, and trust.”

Learn more about employment opportunities and life at Concentric by visiting the careers page, and stay in touch by subscribing to the Concentric Connection.

Do you need assistance assessing your Electric Vehicle (EV) program offerings?

We support the development of EV-specific rates, the design and implementation of EV incentive programs, and the overall evaluation of the EV market size and associated charging needs.

Below are summaries of a few of our specific EV-related capabilities:

Cost of Service Rate Design

Most states have, or are evaluating, the budgets required to implement EV programs, the recovery of associated costs, and other steps needed to initiate and implement EV programs for residential and commercial accounts.

Concentric has direct experience working with utilities on developing program budgets and providing regulatory support. We offer a team of experts on all ratemaking matters, including load analysis, revenue requirements, cost allocation, cost of capital, and rate design to help assure that program costs are recovered in a reasonable manner.

Charging Program Design

Regulators are now consistently requiring utilities to design and implement customer rebates approaching 100% of utility and customer make-ready capital costs. With early programs focused on residential and public-use charging fully implemented in many states, many regulators are now looking for ways to increase adoption in the medium-heavy duty (MHD) segment and through fleet conversions.

Concentric can help utilities determine the appropriate size of these MHD utility programs through detailed forecasting of vehicle charging requirements based on existing and forecasted vehicle registration data. This information is used to project charging infrastructure costs applicable to fleet operations.

Commercial Strategy

Some regulators are limiting the role of utilities in providing EV charging incentive programs, so utility holding companies have begun to explore direct investment in charging infrastructure through competitive affiliates. Evaluating such investments requires a detailed analysis of market potential, estimated charging revenues, capital requirements, and operations costs. As an illustration, because utility make-ready costs, electricity rates, and charging revenue potential are often highly site-specific, EV charging investments must be evaluated at the site level.

Concentric has performed such evaluations of EV charging investments, including developing multi-site screening tools and detailed costing proformas for specific sites, formulating site-host pricing structures, and projecting future electricity rates applicable to EV chargers.

Fleet Management

Utilities are finding that the role of the commercial account representative is expanding to include helping customers evaluate and manage fleet electrification. This enhanced role requires a detailed understanding of anticipated fleet operations (e.g., routes and mileage) and the charging needs of various types of vehicles under specific operating circumstances to determine the optimal charger configuration (e.g., DCFC at varying voltages versus Level 2 chargers).

Concentric has undertaken these analyses to assess the charging requirements to support medium and heavy-duty fleet operations at both depots and on-route charging requirements.

Concentric is uniquely able to support clients as they navigate the emerging opportunities and challenges of adding EV programs to their offerings. Please contact Michael Kagan to learn more about our EV services.

Concentric is proud to announce the appointment of Michael Kagan, Senior Vice President, to the Board of Directors.  

Mr. Kagan joined Concentric in 2013 and has more than 26 years of experience in management roles and consulting to utilities, independent power producers, large energy users, retail energy suppliers and infrastructure investors. His recent consulting work has included investment due diligence, litigation support, and regulatory and commercial strategy with a particularly focus on the renewables and electric vehicle space. 

“I am proud to welcome Michael to the Board of Directors,” said John J. Reed, Chairman of the Board and Chief Executive Officer of Concentric. “Michael brings diverse expertise and insight, and he has demonstrated an exceptional commitment to serving our clients. I look forward to his continued leadership.”  

Prior to joining Concentric, Michael served in a variety of leadership roles with Constellation, Exelon and AES Corp. including as president of Constellation NewEnergy. He has also been an adjunct professor at the George Washington School of Business. 

Mr. Kagan earned an M.A. in economics from the University of California, Santa Barbara and an undergraduate degree in economics and business from Skidmore College.

Published: January 14, 2022

By: Concentric Staff Writer

A December storm that brought a deluge of rain and snow to the western U.S. coast rang out a year of intense drought that had hydroelectric project reservoir levels plummeting to alarming lows, illustrating the complex relationship between weather and energy output in all regions.

The close-out of December and the end of 2021 brought much-needed precipitation, particularly to the Sierra Nevada and the Pacific Northwest, which is heavy with hydroelectric generation. But California’s water agency warned that the La Niña season storm is not quite enough to ease concerns about drought in 2022. The California Department of Water Resources’ (“CADWR”) first snow survey of the winter season at Phillips Station west of Lake Tahoe on Dec. 30 showed 78.5 inches of snow depth and a snow water equivalent of 20 inches, which is 202 percent of average for that location on that date.

“We could not have asked for a better December in terms of Sierra snow and rain,” CADWR Director Karla Nemeth said in a Dec. 30 written statement. “But Californians need to be aware that even these big storms may not refill our major reservoirs during the next few months. We need more storms and average temperatures this winter and spring, and we can’t be sure it’s coming. So, it’s important that we continue to do our part to keep conserving – we will need that water this summer.”

The U.S. Drought Monitor said on Dec. 30 that the heavy December precipitation, snow water equivalent numbers (the amount of water if the snowpack melted all at once), and Standardized Precipitation Index figures point to large improvements in the drought for California, parts of Nevada, and Utah. Precipitation between Dec. 21-27 exceeded two inches liquid-equivalent across much of California and western parts of Oregon and Washington state. Temperatures in that period were also below normal across California and the Pacific Northwest, and a more favorable snowpack was building from the Cascades to the Sierra Nevada.

Energy GPS noted on Dec. 30 that the current weather pattern is bringing cooler temperatures across the Midwest, East, and South-Central regions going into 2022. This will increase the marginal cost of energy in those regions, but there are no signs that a similar situation exists to February 2021, when Winter Storm Uri propelled drastic increases in natural gas and electricity prices and led to widespread grid outages, human suffering, and fatalities in the Electric Reliability Council of Texas region.¹

However, in the East, the Drought Monitor’s Dec. 30 assessment showed declining soil moisture and an expansion of moderate drought across eastern West Virginia. Abnormal dryness persisted across the northern Mid-Atlantic, where 60-day precipitation deficits range from 2 to 6 inches. Moderate drought also expanded in northern and western parts of Virginia, with short-term precipitation deficits, and there was an expansion of dry conditions across parts of Alabama, Georgia, and the Florida Panhandle.

Experts say that despite the stormy December, it will take an exceptional water year to beat back the devasting drought of 2021, which brought many hydroelectric reservoirs to critically low capacity. For example, low reservoir levels at the 646-MW Edwards Hyatt Power Plant at Lake Oroville, California, caused the hydro plant to shut down in August for the first time since it began operating in 1969. After the storms, the plant resumed operation on Jan. 1, 2022. Over the summer, power production also dropped heavily at Lake Shasta in California’s Central Valley and at the 2000-MW Hoover Dam on the Colorado River.

At the peak of summer, 100 percent of California was experiencing some degree of drought, the snowpack was severely below normal, and melting water from the snowpack often didn’t reach western reservoirs, according to the U.S. Energy Information Administration (“EIA”). EIA expects that data from 2021 will show it was a lower year for hydroelectric output, which was down by 37 percent in the first four months of the year compared with 2020, and 71 percent lower than the same period in 2019. EIA projects that hydroelectric output in California will be down by 19 percent over the entire year from 2020, decreasing from 16.8 million MWh in 2020 to 13.6 million MWh in 2021.

The reduced hydropower output offset an increase in solar and wind generating capacity nationally. This effect put the share of all renewables in the U.S. electricity capacity at about 20 percent in 2021, about the same level as 2020 despite the addition of new renewable projects, EIA said. National renewables output is expected to be about 22 percent of U.S. electricity generation in 2022.

As of Dec. 15, before a strong surge of rainfall caused by the La Niña season, the snow-water equivalent was at 18 percent of the April 1 average and 73 percent of a normal read for the Dec. 15 date. The Central Sierra’s snow-water equivalent was at 87 percent of normal for the Dec. 15 date, and the Southern Sierra was at 97 percent of normal for that date, according to CADWR.

The Drought Monitor reported that dry winter seasons in 2020 and 2021 have created concerns about the Sierra Nevada snowpack, which serves as the “blood supply” for the state’s water system. CADWR announced Dec. 1 that the “initial water allocation” to state water contractors would be at zero percent for the first time. For comparison, the initial allocation in 2020 was 10 percent, and the final allocation in May was 20 percent.

But strong snowfall was predicted for the remainder of the year in the Sierra Nevada, the Cascades in southern British Columbia and the Pacific Northwest, the Great Basin—which includes the Great Salt Lake, Pyramid Lake, and the Humboldt Sink—and the 3000-mile Rocky Mountains that stretch from western Canada to New Mexico.

This will replenish hydroelectric reservoirs that serve Pacific Northwest utilities and electric grids as far away as Arizona, which imports a good portion of Northwest hydropower.

But even as the West shows signs of recovery, drought was still prevalent as 2021 closed out, although precipitation had improved. As of Jan. 4, two to locally six inches of precipitation was reported from the Cascades westward to the West Coast in the Pacific Northwest and parts of California, “further reducing dryness and drought in areas where such conditions have already been removed,” the Drought Monitor said. Some areas in California received more precipitation in the past three months than they had in the prior 12 months, the agency said.

The surge in rain and snow in December shows that weather systems work in cyclical ways, but the impact of drought on power production and water allocations for agriculture and other activities serious. However, for the time being, it seems that the parched soil in the West and throughout the country is beginning to experience some relief.

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All views expressed by the contributors are solely the contributors’ current views and do not reflect the views of Concentric Energy Advisors, Inc., its affiliates, subsidiaries, or related companies. The contributors’ views are based upon information the contributors consider reliable at the time of publication. However, neither Concentric Energy Advisors, Inc., nor its affiliates, subsidiaries, and related companies warrant the information’s completeness or accuracy, and it should not be relied upon as such

¹ Subscriber-only content: https://www.energygps.com/Newsletter/b/Newsletter-Opposite-End-of-the-Spectrum-2060038

Concentric Energy Advisors proudly announces several significant team member promotions.

John Stewart was promoted to Senior Vice President. Mr. Stewart is an expert on ratemaking, regulatory policies, utility mergers and acquisitions, and future of energy matters.

Ruben Moreno was promoted to Vice President. Mr. Moreno is a recognized expert in energy procurement and risk management.

Caroline O’Neill was promoted to Vice President. Ms. O’Neill offers a broad range of expertise, including regulatory policy formation and strategy, merger and acquisition due diligence, utility valuations, and asset-based transactions.

Gregg Therrien was promoted to Vice President. Mr. Therrien is an expert in regulatory strategy, cost of service, revenue requirements, and rate design and rate consolidation.

Benjamin Davis was promoted to Assistant Vice President. Mr. Davis focuses on renewable energy, energy efficiency programs, including for low- to moderate-income customers, heat pump programs, grid modernization, and innovative regulatory models.

Meredith Stone was promoted to Senior Project Manager. Ms. Stone offers extensive power market experience focusing on wholesale market design.

Ryan Kennedy was promoted to Senior Analyst. Mr. Kennedy is a member of the depreciation team and provides analytical and research support.

“I am pleased to watch our team continually grow and evolve year after year. This group has demonstrated a strong commitment to serving our clients, and their promotions are well-deserved,” said John J. Reed, Chairman and Chief Executive Officer. “I am honored to have as my colleagues some of the top experts in energy consulting.”