Montague DeRose and Associates, LLC

Quantitative Strategy & Implementation

Our Quantitative Strategy & Implementation practice focuses on the transportation and utility sectors. Montague DeRose & Associates brings substantial enterprise advisory experience to our clients. We have worked closely with numerous clients and regulatory agencies, providing a broad range of advice and problem solving expertise.

To understand and mitigate such risks- Montague DeRose & Associates brings sophisticated financial and analytical tools to our clients. Our firm has a reputation for being highly technical and quantitative. Our standard practice is to design custom spreadsheets and analyses to meet the needs of each of our clients rather than to simply rely on "canned" commercial software.

In addition, we believe that we may be one of the few firms that offer issuers a decision analysis framework through the development of an operating model capable of generating a baseline or expected operating case, a tool which supports rate setting and the formulation of revenue requirements. If utilized, the model framework provides clients with the flexibility to generate multiple scenarios to stress test operating assumptions.

Enterprise Risk Management

ERM is a portfolio of tools and strategies to increase an organizations ability to manage uncertainty. Uncertainty poses both a downside - risk - and an upside opportunity.

Typically the focus of ERM is on unfavorable events that could adversely impact any result, usually financial results. But managing risks also includes looking at opportunity - favorable events that could positively impact results. In general terms, ERM strives to mitigate potential loss of cash flows and to take advantage of opportunities.

Counterparty Analyses

We conduct deep analyses of counterparties to project the relative financial position of different counterparties and assess the market, regulatory and financial risk of each entity. Such analyses are used to make contract renegotiation decisions, purchase decisions and to assist decision makers in addressing the credit risk and potential cost of liquidity from conducting business with different counterparties.

Regulatory and Financing Services

Montague DeRose & Associates has worked closely with numerous governmental and public power entities and regulatory agencies, providing a broad range of advice and problem solving. We understand social responsibility and the concept of local people working together for the public good. We know the importance of public trust as a fundamental element of successful regulation and public policy.

Montague DeRose & Associates brings extensive experience in providing testimony, assistance and analytics to stakeholders in our core sectors including public utility commissions, rating agencies and the financial community. We specialize in providing an analytical perspective to complex policy issues.

As an example, Montague DeRose & Associates' staff has provided significant testimony supporting cost allocation scenarios before the California Public Utilities Commission ("CPUC"). This testimony was used to analyze and eventually establish power charges on retail utility customers in California. In addition, Montague DeRose & Associates has provided on the record testimony assisting the CPUC in assessing the effects of debt equivalency, credit collateral, stress case liquidity associated procurement decisions of Investor Owned Utilities in California.

Performance Management

The decision analysis framework based on our comprehensive operating model not only generates a baseline or expected operating case, but also provides the utility with the flexibility to generate multiple scenarios to stress test operating assumptions. We believe our analytical and technical abilities rival those of any Wall Street investment bank. The reports from the analytical framework are used to support:

  • Regulatory filings
  • Rating agency communication
  • Setting of reserves and working capital
  • Capital allocation
  • Revenue requirements
  • Real time revenue sufficiency analysis
  • Variance reporting
  • Projections of changes on future cash flows
  • Value at risk reporting

Rating Agency Strategies

Recent turmoil in the capital markets highlights the need for deep expertise in the assessment of the credit and rating agency strategies of the regulated entities. Montague DeRose & Associates is one of the only advisory firms in the West with a credit specialist on staff who previously served as a credit analyst and vice president at Fitch Ratings and MBIA, respectively. Due to our unique knowledge of ratings criteria and industry medians, we are able to help assess the strategies of utilities to enable the highest ratings and lowest costs of borrowing which results in lower cost of service for ratepayers.