Financial Models
Where a cost of service study examines and allocates historical costs, a good financial planning model is forward looking. It picks up where the cost of service leaves off and projects the financial condition of the utility for a 10 year planning horizon. The information contained in the financial planning model provides a good look at “where we are headed” financially over the next 10 years. This look forward is not wishful thinking but instead is a careful examination of a utility’s financial condition if current trends continue. Our financial model also identifies that tools a utility management has available for keeping the utility's earnings in line with expectations. The information provided by our financial planning model includes:
- Demand and sales forecasts
- Budget projections
- Capital forecasts
- Operation and maintenance expense forecasts
- Financial projections
- Purchase power forecasts
- Rate change forecasts
- Key financial indicators
