Summary: Edward Bodmer has taught energy finance and pricing throughout the
world, formulated significant government policy and corporate strategy in the
Midwest, and created innovative forward pricing and investment valuation software
for consulting clients throughout the United States. Mr. Bodmer’s teaching and
project finance activities have included lectures and development of course
materials on energy finance and electricity pricing for clients in North
America, South America, Africa and Asia.
He has constructed project finance software and taught courses for
bankers, utility companies, government officials and power plant
developers. Mr. Bodmer’s involvement in
Illinois energy policy has included
advising officials on de-regulation, testifying on the economics of “delivery
services” and simulating the financial impacts of legislative
alternatives. He has negotiated rates
for major electricity users such as the CTA and the City of Chicago street
lights and he has implemented new tax policies associated with de-regulation of
electricity. The analytical tools for forward pricing and investment valuation that
Mr. Bodmer has created include software development and consulting reports for
utility companies, municipal power agencies, financial institutions and
independent power producers. He has
constructed a framework for forecasting and valuation using production cost
modeling techniques combined with option price theory and monte carlo
simulation.
·
Project finance
models and debt sizing analysis with complex financial structures
·
Equity valuation of
projects using alternative financial methods including hourly production
simulation and options pricing models
·
Merchant plant
valuation and credit analysis using forward price analysis and monte carlo simulation
·
Marginal cost pricing
for electric utility companies including distribution, generation transmission
and administrative functions
·
Productivity analysis
of cost structure using regression analysis that reflects service territory
constraints and plant characteristics
·
Forward electricity
price analysis using production simulation and options pricing models
·
Project Finance
modeling for energy, utilities, mining and other projects
·
Marginal cost measurement
and electricity rate design
·
Taxation of Electric
Utility companies
·
First National Bank of
Chicago: Developed forward electricity price models using hourly
supply and demand; constructed capacity pricing models using option theory, and
analyzed credit for limited recourse electricity projects. (1996-1999)
·
City of Chicago: Advised
City officials and the Speaker of the Illinois House of Representatives on
issues associated with de-regulation of electricity that resulted in the 1997
legislation. Testified for the City on
rate design and cost of service for distribution facilities. Developed aggregation programs and
negotiated new rates for transit, street lighting and municipal buildings.
(1996-1999)
·
PriceWaterhouseCoppers: Used
production simulation model to measure value of merchant plant strategies and the
decision of whether to proceed with limited recourse project financing.
(1998-1999)
·
Massachusetts Municipal
Electric Company: Wrote and
installed software for forward price estimation and used the price
projections in valuing limited recourse projects, supporting pipeline
construction and measurement of stranded investment. (1996-1999)
·
Detroit Edison Company: Analyzed the value of generation asset
portfolio using forward price models and assisted with stranded investment testimony.
(1997-1999)
·
NICOR, Inc.: Constructed valuation analysis for a
proposed merchant plant investment using hourly market price modeling together
with monte carlo simulation. The
analysis was used by the board of directors in deciding whether or not to make
an equity investment of $50 million. (1998)
·
State of Maine Public
Utilities Commission: Advised the
Commission and prepared reports on generating plant and power contract
divestitures of Central Maine Power, Maine Public Service Company and Bangor Hydro
Electric Company. The project involved
valuation of generating plants, assessment of market power and evaluation the
terms for replacement power purchase contracts. (1998-1999)
·
Specialized Training courses
(1995-1999):
·
For the New Mexico
Public Utilities Institute, created and taught course on valuation of
electricity generating facilities including valuation exercises and lectures on
forward price curves
·
For the New York
Institute of Finance, created a project modeling course for Asia using case studies
·
For over 100
municipalities in Illinois, produced a workshop on electric utility taxes in a
competitive environment
·
For a large Electric
Utility Company, developed a seminar on options pricing applications to
electricity pricing
·
For USAID, lecturer
and financial models simulation consultant on a Energy Utilities Training
program in Egypt.
EXPERIENCE
RECORD
Financial Analysis, Project Finance
and Merchant Activities:
·
Senior financial
analyst for a 220 MW dual-fired power plant.
Reviewed and supervised the financial model and performed sensitivity
analyses.
·
Directed consulting
analysis and create software to evaluate impacts of changes in the operation of
hydro generating facilities on the rates for cooperative and municipal
utilities in the western U.S. The
project included forecasting power costs, other operating costs, and financing
of more than fifty municipal and cooperative systems.
·
Managed Business
development, organization structure, marketing plans, and consulting services
for an electric brokering and marketing company. Negotiated contracts with
investor owned, municipal, and co-operative utility companies and independent
power producers. Created database and
analytical software to evaluate the economics of bulk power transactions and
quantifies the economics of alternative power contracts
·
Presented expert
testimony on the financing of a proposed acquisition by a utility company of an
independent power producer. The
testimony included evaluation of the financial structure of individual power
projects and the financial capability of an investor owned utility company to
complete an acquisition transaction.
Electricity Utility Restructuring
and Market Clearing Prices:
·
Developed forward
electricity pricing framework including equilibrium analysis, option pricing
methods and hourly marginal costs to value generating assets and compute investment. The pricing and valuation framework has been
used by utility companies, municipal systems, customer groups and public
utility commissions.
·
Evaluated and
assisted in drafting proposed electric utility restructuring legislation in
Illinois on behalf of the City of Chicago including analysis of revenue
impacts, financial impacts on utility companies and long-term price projections
by customer class. Presented findings
to key decision makers including legislative leaders and City officials.
·
Created analysis of
regional bulk electricity pricing though development of an hourly chronological
production cost modeling system.
Applied the market pricing framework together with modern financial
theory to valuation of generating assets, measurement of stranded investment,
resource planning, and quantification of differences in risk associated with
alternative supply additions.
Pricing
Analysis:
·
Directed marginal
cost-of-service analysis of a large electric utility company including energy
cost, capacity cost, and customer costs of transmission, distribution, and
generating facilities. Evaluated load
research for customer class segments and developed methodology to compute
area-based marginal distribution cost.
·
Evaluated and
assisted a utility company in the construction of a real time pricing system
for buy back rates of qualifying facilities.
The study included evaluation of power pool marginal costs and
simulation of bulk power transactions.
·
Developed regional
cost of service model for evaluating cross subsidies between different areas of
an electric utility company on a marginal and embedded cost basis. Used the model as the basis for testimony on
the regional pricing and taxation issues.
Acquisition
Analysis:
·
Evaluated the
benefits and costs of alternative merger and acquisition options for four
utility companies. The work included
valuing potential cost savings, measuring strategic benefits and exposures,
computing the value of business segments (including stranded investment) and
projecting earning on a consolidated basis.
·
Performed a
comprehensive cost/benefit analysis to evaluate options associated with
expiration of a major municipal franchise.
The project included rate and financial projections under alternative
scenarios and an in-depth study of rate structure, load growth, usage patterns,
and regional cost-of-service differences.
·
Conducted competitor
study for a larger Midwest utility company, which encompassed evaluation of
load growth, customer mix, reliability, administrative and distribution cost,
transmission positioning, and a plant by plant analysis of generating
resources. Analyzed cost
competitiveness using a statistical benchmark methodology and presented
strategic implications from financial simulations to senior management.
Efficiency
Studies and Productivity Analysis:
·
Created database and
econometric models to quantify cost of service performance for electric utility
companies. Used the statistical models
in testimony on performance based regulations for West Cost electric utilities;
evaluation of the structure of the electricity industry in New Zealand; and performance measurement of utility companies in
the United States.
·
Developed regression
models of actual and expected costs for component of electricity cost of
service and used the model to measure relative efficiency of utility
companies. Applied results of the model
to testimony in valuing assets for purposes of setting rates.
·
Analyze the potential
cost of savings arising from the merger of two electric utility companies
through a function by function review of cost reductions, an “even study” of
savings achieved from actual merger and statistical model of potential
efficiency. Used the analysis in
testimony on the policy benefits and costs of the proposed merger.
1986 – 1990 -- First National
Bank of Chicago, Vice President (Chicago, IL)
Industry
Specialist/Electric and Gas Division: Directed financial advisory projects
to evaluate electric utility financial issues including mergers and
acquisitions, complex credit structuring, competitive position analysis, lease
versus buy evaluations, and project finance.
Created techniques to value the equity of utility companies, developed
credit screens for investor-owned, municipal and co-operative electric utility
systems, and built financial and operating data bases specific to the utility
industry. Presented Expert testimony on
the value of regulatory options to customers and the cost and benefits
associated with a proposed settlement agreement to “spin-off” three nuclear plants. The testimony included rate and financial
simulation models of numerous sensitivity cases for 30 years in a regulated and
a deregulated environment, and incorporated probabilistic decision analysis to
measure the value of regulatory options.
Team Leader/Corporate Financial
Services Department: Managed a
team of twelve professionals analyzing the energy industry, including all
credit and corporate finance analysis for utility companies, petroleum
companies and mining companies.
Responsibilities entailed gaining knowledge of all aspects of the energy
business including oil and gas reserves, refining margins, coal mining issues
and commodity pricing. Decided on
promotion, salary levels and bonuses; interviewed new applicants; taught
courses in the training program; chaired a bank-wide committee on personal
computers and established management systems for the team.
Conducted economic
and financial analysis on complex lease deals, capital investment decisions,
acquisition candidates, pricing policies and taxation issues. Created new economic research techniques and
computer programs for pricing and financial analysis, and developed computer
programs on both micro and mainframe computers to mechanize the annual
budgeting process. Completed analysis
and reports on the economic and financial impacts of deregulating certain
Interstate Commerce Commission regulations; the process of deciding whether to
scrap a tank car; statistical determination of portions of fixed and variable
administrative expenses; railcar price indices; and steel scrap price
forecasts.
Conceptually
designed, programmed, and implemented computer simulation models and financial
forecasts to evaluate regulatory issues from accounting, economic, and
financial perspectives. Developed
computer systems used to streamline accounting analysis in utility rate
cases. Presented expert testimony
involving emergency rate requests, rate projections, cost of capital,
construction financing, financial ratio analysis, capacity expansion, debt
versus equity financing and income tax accounting.
1986 University of Chicago – Chicago, Illinois
Masters degree in Business Administration with
specialization in Econometrics and Finance.
1979 University of Illinois – Urbana,
Illinois, Bachelor of Science in Finance
“Bronze Tablet” at
University of Illinois for graduating at top of class with 5.0/5.0 grade points
average.
Phi Beta Kappa
honorary fraternity at University of Chicago for graduating in top 10% of
class.
President of Chicago
Energy Economists.
Board
of Director for CEC Lighting Company, Energy Exchange of Chicago and Stonewater
Software.
·
Valuation of Electric
Generating Plants. Bodmer, Edward,
Phillip O’Connor – Edison Electric Institute, December 1998
·
Benefits of
Distributed Generation in a De-Regulated Environment. Bodmer, Edward – July 1997
·
Impacts of Western
Area Power Administration’s Power Marketing Alternatives on Retail Electricity
Rates and Utility Financial Viability. Bodmer,
Edward, R.E. Fisher, and R.C. Hemphill – Argonne National Laboratory, January
1994
·
Statistical Study of
Costs and rates in New Zealand. Bodmer,
Edward – New Zealand Electricity Supply Association 1992.
·
Recommendations from
University of Chicago Conference on Utility Regulations. Bodmer, Edward, George Tolley and Peter Griffes – Resources and Energy
1992.
·
Utility Rate
Comparisons and Management Efficiency. Bodmer, Edward and George Tolley – Public
Utility Fortnightly 1990
·
Tax and Financial
Implications of ERC Leasing by Electric Utilities. Bodmer, Edward and Roger
Raufer – November 1985
·
The Capital
Investment Recovery Model; An Alternative to the AFUDC/CWIP in Rate Base
Controversy. Bodmer, Edward and Robert
Bussa – Midwest Finance Association, St. Louis, Missouri April 1983
·
Some Consequences of
the Tax Act 1981. Bodmer, Edward and
Charles Stalon – Proceedings from the 13th Annual Conference of the
Institute of Public Utilities, Williamsburg, Virginia December 1982
·
Alternatives to Case
by Case Rate Base Regulation. Bodmer,
Edward, Proceedings from the Second Biennial Regulatory Information Conference,
Columbus, Ohio August 1982
EXPERT TESTIMONY
·
On behalf of the City
of Chicago before the Illinois Commerce Commission, 1999. Testimony on the economics of delivery
charges and transition charges for Commonwealth Edison Company.
·
On behalf of Enron
Corporation and New Energy Ventures, LLC before the Illinois Commerce
Commission, 1999. Testimony on the
economics of unbundling billing and metering services.
·
On behalf of the
Maine Public Utilities Commission, 1999.
Testimony on market power and other issues associated with the
divestiture of generating assets by Maine Public Service Company.
·
On behalf of the
Maine Public Utilities Commission, 1998.
Testimony on issues associated with the divestiture of generating assets
by Central Maine Power Company.
·
On behalf of the
Massachusetts Municipal Wholesale Electric Company, 1997. Deposition on forward pricing and valuation
of nuclear power plants.
·
On behalf of the
Minnesota Department of Public Service, 1996. Testimony on the cost savings
from the proposed Primergy merger.
·
On behalf of
Indianapolis Power and Light before the Indiana Public Utilities Commission,
1995. Direct and rebuttal testimony on measurement of productivity through
regression analysis on comparative cost data.
·
On behalf of the City
of Chicago before the Illinois Commerce Commission, 1994. Testimony on marginal cost of service and
the appropriate rate design for residential customers of Commonwealth Edison
Company.
·
On behalf of the City
of Chicago before the Illinois Commerce Commission, 1993. Testimony on the
regional cost of service as between the City of Chicago and other areas served
by Commonwealth Edison Company.
·
On behalf of the
Governor of Illinois, the Cook County States Attorney and the Illinois Attorney
General before the Illinois Commerce Commission, 1988. Testimony on the cost
and benefits of a proposal by Commonwealth Edison Commission to “spin-off”
three nuclear units. The testimony
included rating options to deregulate the nuclear units.
·
Before the Connecticut
Department of Utility Control,1984. Testimony on the prudence of Northeast
Utility Company in delay in construction of a nuclear plant based on financial
concerns.
·
On behalf of the
Illinois Commerce Commission Staff, Docket #81-0026. Recommendations on capital structure, revenue levels, expense
levels, and a “Negative CWIP” plan for Commonwealth Edison Company.
·
On behalf of the
Illinois Commerce Commission Staff, Docket #80-0044. Testimony on the cost of common equity capital including an
application of the discounted cash flow model, and financial ratio analysis for
Union Electric Company.
·
On behalf of the
Illinois Commerce Commission Staff, Docket #80-0167. Testimony on the Application of a variable rate of return model
to construct work in progress for Illinois Power Company.