The ScottMadden Energy Practice

Copyright © 2014 by ScottMadden, Inc. All rights reserved.
The ScottMadden Energy Practice

1
Who We Are
ScottMadden is a management
consulting firm with more than 30 years
of deep, hands-on experience.
We deliver a broad array of consulting
services—from strategic planning
through implementation—across many
industries, business units, and
functions.
WHAT IT TAKES
W E D O
TO GET IT DONE
R I G H T
 More than 2,400 projects
 More than 300 clients including 20 of the top
20 energy utilities
 Every business unit, every function
ENERGY
 More than 1,100 projects
 Clients range from entertainment to energy
to high tech
 Unmatched experience with more
clients and more solutions
CORPORATE&
SHAREDSERVICES
 Unique perspective built on 30 years of
energy experience
 Solutions for clean and renewable sources
of energy, smart energy management, and
sustainability
CLEANTECH&
SUSTAINABILITY

2
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.
S c o t t Ma d d e n :
SMART.
FOCUSED.
DONE RIGHT.
“They were able to offer more
customization vs. a cookie-
cutter consulting project plan
or proposal. Exactly what
we’re looking for.”

Our energy utility expertise has been built over more than 30
years. It is experience based, not theoretical. Our capabilities are
broad and deep. Chances are we have seen and solved a similar
problem.
E X P E R I E N C E
We have helped our clients develop strategies, improve
operations, reorganize companies, and implement initiatives.
S E R V I C E S
We perform projects across every energy utility industry business
unit and in every function. Since 1983, we have served more than
300 clients and completed more than 2,400 projects.
S C O P E
20 OF THE TOP 20
ENERGY UTILITIES HAVE ENGAGED
SCOTTMADDEN.
3
ScottMadden Knows Energy

4
Representative Capabilities
 Strategic planning
 Business planning
 Operational excellence and best practices
 Playbook and management model
 Process improvement
 Organization design and staffing
 Smart Grid
 Renewables
 Environmental
 Regulatory
 Mergers and acquisitions
 Benchmarking
 Corporate and shared services
 Clean tech and sustainability
“I’ve used many consulting services during my
career, and no other firm ever delivered on the
promises they made better than ScottMadden.”
G E N E R A T I O N C O M P A N Y
P R E S I D E N T

5
Areas of Focus
GENERATION
Our practical expertise in nuclear,
fossil, and renewables helps clients
implement leading practices for
fleets and individual plants to improve
and sustain results.
DISTRIBUTION/SMART GRID
We help our clients manage their
distribution businesses in this
changing environment with a
continued focus on managing cost
and ensuring reliability.
TRANSMISSION
We provide broad, deep energy
expertise coupled with practical
business acumen to help companies
navigate transmission challenges
with solid business advice.
VERTICALLY INTEGRATED
UTILITIES/PUBLIC POWER,
MUNICIPALS, AND COOPERATIVES
We have performed numerous
projects for leading players in every
area of the business.
REGULATION AND RATES
We offer extensive experience in
addressing the strategic and operational
challenges posed by energy regulation
to help our clients succeed in today’s
turbulent times.
GAS
We help companies adapt to rapid
change in the natural gas industry by
providing strategic and operational
improvements that deliver value
to clients.

Consulting Approach
C O N T E N T D E E P
We know energy and have worked across every
energy utility business unit and every function for
more than 30 years.
P E R S O N AL I Z E D
We begin by listening to our clients’ situation,
challenges, and goals; then we personalize our
work to help them succeed.
C O N T E X T U AL
We don’t solve problems with canned
methodologies—we help our clients solve the
right problem in the right way.
C O L L AB O R AT I V E
We engage with our clients like no other firm
does, working side by side to produce results.
R E AL R E S U LT S
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.
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7
Representative Clients
Transmission Delivery Utilities Regulation GasGeneration
Note: Representative sample; not all-inclusive of clients served. Excludes numerous well-known clients due to confidentiality agreements

8
 More than 30 years in the energy industry gives us unmatched
experience
 More than 2,400 projects means “most likely” we’ve seen a
similar issue or solved a similar problem
D E E P E X P E R T I S E
 Before we begin any project, we sit down and listen to our
clients’ needs and challenges
 We engage with our clients like no other firm does, working side
by side to create practical, real results
 We don’t employ canned methodologies or cookie-cutter
solutions. We work to solve the right problem in the right way
P E R S O N A L I Z E D A P P R O A C H
P H I L O S O P H Y
 We are personally invested in every project and measure our
success by our clients’ success
 We listen to our clients’ needs and put their best interests ahead
of our own
 We work with integrity, tenacity, and a genuine passion for what
we do
 We do what it takes to get it done right
More than 30 years later,
our very first client is still
with us today.
Why ScottMadden?
“Outstanding job of selecting
really good people that have
the experience, knowledge,
and insights.”

S. Bradley Kitchens
President and
Chief Executive Officer
ScottMadden, Inc.
3495 Piedmont Road
Building 10, Suite 805
Atlanta, GA 30305
sbkitchens@scottmadden.com
404-814-0020
ScottMadden, Inc.
2626 Glenwood Avenue
Suite 480
Raleigh, NC 27608
spearman@scottmadden.com
919-781-4191
Stuart M. Pearman
Partner and
Energy Practice Leader
Contact Us
9

National Nuclear Fleet Operator
Fleet Operating Model Development and Implementation
ScottMadden worked with this operator to determine how to put an approach in
place to operate a fleet of plants that had grown through acquisition and
continued to operate independently. We began with a formal assessment of their
current approach against criteria of a stronger fleet model. Gaps were identified,
and a long-term transition plan was implemented. Standards were set for
organization, staffing, tiered indicators, regular management meetings, business
plans, functional area ownership, and improvement plans.
Large Unregulated Fleet Operator
Site Performance Improvement Applying Fleet Standard
ScottMadden worked with an underperforming nuclear generating station to
improve operational performance by identifying and closing gaps to the proven
standard fleet operating model. This included facilitating initial assessments to
identify quick wins, followed by a thorough gap assessment for each functional
area in order to create gap-based improvement plans. This process has been
recognized and recommended in the industry as a best practice.
Single-Site Nuclear Operator
Reorganization and Staffing
ScottMadden led a corporate downsizing effort for a single-site, dual-unit, non-
fleet nuclear operator. The initial phase of the project included working with
executives to determine the right staffing targets, working with functional areas to
perform a detailed workload analysis of their plant in comparison to top-
performing peer operators, and assisting the functional area teams to develop
staffing recommendations based on leading practices to the executive review
team. The final phase of the project included working with human resources to
develop a selection process that was legal, fair, and equitable for all parties and
assisting plant leadership with the selection process.
N U C LEA R
Generation
Representative Qualifications
10

Large Fossil Utility
Fossil Power Playbook Development
ScottMadden assisted our client in developing a playbook structure for
consistent management practices across their fossil business. To execute this
project, ScottMadden adapted our model for this approach to the unique needs
of our client. The approach focused on both management controls—how we run
the business and hold people accountable—and operational processes—how
we run and maintain the units. We leveraged best practice policies, processes,
and procedures in dozens of functional areas to ensure our client had a
successful operating model and assisted with the implementation. Our client
saw dramatic results in operational and management performance metrics.
Multiple Large Fossil Utilities and Unregulated Generators
Fossil Operations Restructuring
ScottMadden assisted our clients in designing and implementing an organization
structure and reporting relationship changes in their fossil organizations. This
was a multi-phased project which included current state analysis, functional
mapping, organization design, staffing selection methodology, and
implementation and communications.
Generation
FOSSIL
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Large Utility
Renewable and Clean Tech Project Evaluation Pipeline Process
ScottMadden assisted a large utility in the development of a renewable and
clean tech project pipeline screening and evaluation process. Scope included
the major renewable and clean tech projects such as biomass, wind, solar, and
energy storage. The evaluation pipeline was geared for acquisition of assets or
companies, and the pipeline process evaluated projects that were operational,
had commenced construction, had just applied for permits, or were just “on the
drawing board.”
R EN EWA B LES
Generation
12

Independent System Operator
Wind Penetration Impact Study
ScottMadden conducted a comprehensive study of the impacts of wind
generation penetration on the transmission grid. This study assessed the issues
associated with increased wind generation such as intermittency, the need for
increased voltage regulation, and the need for firming capacity. We also
estimated the cost of remediating these issues.
Large Wind Developer
Wind Development Organization Business Plan
ScottMadden assisted a large wind developer in developing a formal business
strategy and business plan. This included the market, regulatory, economic, and
legislative framework to shape development of the company wind business. The
business plan also analyzed key drivers shaping wind generation demand, such
as coal plant retirements, natural gas supply and price projections, transmission
availability, expansion of state renewable portfolio standards, the turbine
technologies, and others.
Large Wind Developer
Wind Development Organization Project Management Process Assessment
and Improvements
ScottMadden assisted a large wind developer in assessing, improving,
formalizing, and documenting the processes used to manage wind generation
projects from cradle to grave (origination to commercial operations date). The
project resulted in the formation of a project management organization structure
to coordinate all the activities needed to successfully manage a wind generation
project to completion. ScottMadden conducted similar assessments for the same
developer in construction management and safety.
Generation
R EN EWA B LES
W IN D
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Large Municipal Utility
Rooftop Solar Rate Strategy
ScottMadden worked with a large municipal utility to refine the strategy and rate
structure for customer-owned rooftop solar generation. The new approach was
targeted at providing a better alignment with the cost of solar integration and
involved the development of a value of solar rate to replace their then-current
net-metering rate. ScottMadden also led the development of an implementation
plan and detailed communication plan to support the change.
Generation
R EN EWA B LES
SOLA R
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Large Resource Management Company
Biomass Strategic Option Development
ScottMadden assisted a non-utility large resource management company in
developing a comprehensive biomass strategy, including feedstock assessments,
generation plant-size determinations, PPA structures, and internal skill
assessments. Since the client had no experience in electric utility operations, the
development of PPA pricing, terms and conditions, and transmission
interconnection were particularly useful.
R EN EWA B LES
B IOMA SS
Generation
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Independent Transmission Company
Operations Center Design and Implementation
ScottMadden led the development of a comprehensive plan to build a new
transmission operations center to take over operations of a transmission system
being divested by the incumbent integrated utility. Once the plan was finalized,
ScottMadden managed the project to build the operations center. This project
included building a facility to house system operations, implementing a new
energy management system, upgrading remote terminal units in the substations,
provisioning a new telecom network, and developing all policies and procedures
that would be used to manage the new organization.
Transmission Company in the Midwest
Transmission Strategy Project
ScottMadden was retained by a large multi-state utility to assess existing
transmission project requests, near- and long-term state commission expansion
plans, and multi-state regional transmission and generation planning group goals.
We helped the client prepare the five- to ten-year landscape for likely
transmission construction projects. Potential projects were evaluated on the
likelihood of project approval in the regulatory arena, costs to construct, and
perceived benefits (including regulatory return), improved system reliability, and
increased system stability. The study produced a rank-ordered listing of projects
that would result in stabilizing capital investments over a multi-year horizon.
Independent Transmission Company
Operational Strategy
ScottMadden assisted a transmission owner in selecting the strategy and
technology by which it would manage its newly built transmission assets.
ScottMadden helped the organization select the appropriate energy management
system and telecommunications solution to facilitate remote operations. The
solution enabled the client to minimize local energy management system
equipment and software and leverage the organization’s significant IT resources
in another state. This work also allowed the organization to maintain a local
control center with proximity to the transmission assets.
TR A N SMISSION /
SMA R T GR ID
Transmission
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Regional Transmission Operator
Control Area Consolidation
ScottMadden assisted a large North American RTO with a strategic assessment
of implementation options for consolidation of balancing authority functions and
the rollout of an ancillary services market. The project scope included
development of operational requirements and potential configuration options for
consolidation. In addition, a comprehensive cost/benefit study was performed to
model the economic benefits of consolidation and estimate the financial impact
of various implementation choices and trajectories. The project mapped out
development of a virtual balancing authority and subsequent transformation into
a physical balancing authority. This was implemented successfully. The client
used this analysis to support the development of a FERC filing on the potential
benefits of this consolidation.
Regional Transmission Organization
Generation-Transmission Interconnection Process Development and
FERC Tariff Submission
ScottMadden assisted an RTO in revamping their interconnection process to
accommodate the large influx of renewable interconnection requests into the
queue. The project included management of the RTO stakeholder process.
Stakeholders included those involved in RTO planning and asset management,
regulatory groups, the transmission owners in the RTO footprint, generating
entities in the footprint, FERC, state regulators, and a wide array of lobbying
groups. ScottMadden helped develop the interconnection process and provided
subsequent assistance in revising internal business processes and drafting
sections of the FERC tariff, which was approved by FERC.
Regional Transmission Organization
Implementation of an Energy Dispatch Market
ScottMadden assisted an RTO with the implementation of an energy dispatch
market, including day-ahead and real-time markets, asset management, and
back-office functions. ScottMadden designed the post-market launch
organization structure and assisted the RTO with certification to FERC of
readiness to open the energy market.
MA R K ETS /
R TOs/ISOs
Markets/RTOs/ISOs
17

Investor-Owned Utility
Smart Grid Demonstration Grant
ScottMadden assisted a large northeastern utility in managing a Smart Grid
Demonstration Grant within the American Recovery and Reinvestment Act (the
Stimulus package). This program was designed to further Smart Grid
capabilities in electric distribution systems. It included advanced meter
infrastructure and associated distribution system automation and data utilization,
piloting of energy storage applications, electric vehicle charging, facility
functionality, and electric grid stability applications to facilitate expanded
penetration of renewable energy resources. This suite of applications and
functions was designed to use alternative resources to help improve the
functionality of the T&D system. Visualization of the various resources was
another important part of the demonstration. ScottMadden developed the
program infrastructure, project execution plan, and earned value management
models to manage the project. We provided day-to-day program management
support to the client across multiple sub-awardees and internal utility
departments.
Electric Utility in the Northeast
Capital Project Planning Process Development
ScottMadden was engaged by this client to develop a new capital project
planning process to support more robust business plans and budgets. Working
with stakeholders across T&D operations, ScottMadden developed a stage-gate
process, defining the thresholds of approval required for various types of
projects. Key stakeholders of the process were engaged to ensure that all
project team members were fully committed to the revised procedures. This
work also included development of a project close-out process. The new stage-
gate process was implemented successfully in the following year’s planning
cycle.D ISTR IB U TION /
SMA R T GR ID
Distribution/Smart Grid
18

Southeastern Vertically Integrated Utility
Merger Integration
ScottMadden assisted an energy company with the integration of an acquisition
of a $3+ billion energy company. The acquisition received close scrutiny from
Wall Street and industry observers. The identification and realization of cost
reduction synergies were key elements for this post-acquisition integration effort.
We set up the integration approach in the first 30 days and identified synergy and
integration opportunities in the next 90 days. We also supported organization
redesign, staffing, and detailed process integration. The deal closed in record
time for the energy industry. Synergies identified, and ultimately realized, met the
highly ambitious targets initially announced to Wall Street. Attendant earnings
and growth targets were in line with estimates.
VER TIC A LLY
INTEGRATED UTILITIES
Vertically Integrated Utilities
19

Public Power Agency
Strategic Planning
ScottMadden assisted one of the largest public power agencies in the United
States with the development of its strategic plan. The plan was designed to
optimize the business across multiple stakeholders with differing interests,
reduce risk, and ensure a continued supply of low-cost power over the long term.
We helped identify, and mitigate, significant risks to the business. ScottMadden
performed the analysis, helped develop the strategy, and presented it to the
Board. The plan is being implemented successfully and is routinely in the news.
Generation and Transmission Cooperative
Strategic Planning
ScottMadden provided strategic planning leadership for a G&T cooperative. We
provided an assessment of the current state; worked with the Board and
executive leadership team to craft a new vision, set strategic objectives, and
develop an implementation plan; and established an integrated strategic planning
calendar.
Municipal Utility
Business Plan Development
ScottMadden supported the first evolution of a municipal utility’s enterprise
business plan development. We designed the business planning process to link
operational performance to strategic plans and created the methods, templates,
metrics, and other infrastructure required for execution. We project managed 11
teams from all operational and support services business units through the
development process. ScottMadden provided project management and analysis
support for the teams throughout the project and helped author the enterprise
consolidated business plan. The project resulted in a comprehensive, two-year
company business plan focused on achieving very specific results by addressing
the root causes of existing gaps between current and first-quartile performance.
PU B LIC POW ER ,
MU N IC IPA LS, A N D
C OOPER ATIVES
Public Power, Municipals, and Cooperatives
20

Investor-Owned Electric Utility
Future Test-Year Support
ScottMadden assisted an electric utility in maximizing its probability of success
with a future test-year rate case filing. Concerns existed around current budgeting
and financial management processes. Internal resources were constrained in the
midst of mounting integration, documentation, and business process
improvements. The budgeting process and assumptions were documented, and
the O&M budgeting process was redesigned to improve accuracy. Variance
reports were designed and installed across business units. We also performed an
evaluation of the capital project process, with associated recommendations
designed to improve accuracy and efficiencies.
Investor-Owned Utility in the Southeast
Rate-Making Process Assessment
The company established a goal to: (a) reduce regulatory lag; (b) harden its
regulatory filing development process; and (c) capture institutional knowledge of
its regulatory filing development process. ScottMadden was retained to help
improve the speed and accuracy of the rate-making process by examining the
potential benefits of improvements on the revenue side of rate filings, enhancing
information reporting and analytics, and automating the process through potential
technology solutions. We completed a detailed analysis of the sub-processes,
people, and systems underlying the utility’s ratemaking efforts.
Recommendations addressing each of the key findings were developed and
prioritized considering a number of factors, including (a) cycle-time days saved;
(b) workforce/work management benefits; (c) costs; and (d) risks. A revenue
deficiency of $60 million translates into an additional $5 million in revenue for
every month the cycle time can be reduced. We were able to help the company
trim five weeks from their timeline—a potential earnings impact of almost $6
million.R EGU LATION A N D
R ATES
Regulation and Rates
21

Investor-Owned Utility in the Midwest
Rate Case Support
ScottMadden assisted a utility in the Midwest in its response to commission
inquiries about affiliate interest issues, cost separation methodologies, and the
rationale for proposed increases in the company’s cost-of-service filing.
ScottMadden developed detailed documentation and supporting work-paper
templates for capital and O&M budgets, facilitated template completion by the
business units, sample-tested capital budget items to ensure adequate
separation of regulated and non-regulated projects, and assisted the client in
submitting new filing.
Regulation and Rates
R EGU LATION A N D
R ATES
22

Gas Utility
Strategic Sourcing Assessment and Implementation
ScottMadden assessed the potential savings achievable through strategic
sourcing at a large gas utility. We developed and executed a plan to achieve
these savings through the establishment of client-led teams. This effort involved
team selection and training and the implementation of leading practices in spend
and market analysis, sourcing strategy, RFP development, proposal evaluation,
negotiations, and contracting. Our approach not only yielded cost savings for the
client but also established a new capability in the organization.
Multiple Gas LDCs
Business Process Improvement
ScottMadden managed large multi-team projects to assess LDCs’ current state
processes, functions, and organizations and 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.
GA S
Gas
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