Acquisitions & New Ownership
At Sterling Energy, we have a unique reputation for being business managers with a deep understanding of the technical aspects of managing power plants in commercial operation. Many clients have utilized these perspectives to help them evaluate potential investment in proposed or existing facilities.
These clients have come to expect us to provide comprehensive financial models and operating cost projections, contract reviews with foresight, candid assessments of physical condition and meaningful suggestions for improving the preset value of a potential investment.
We carefully attend to our reputation for ethical business practices, enabling our clients to incorporate us into their team with confidence that their trust in our discretion and confidentiality will not be misplaced.
Sterling Energy is prepared to participate in part or all of the due diligence or transition of your projects, providing our team of experienced people in the areas where you need support. The professionals who make up our team are world class executives with due diligence and transition experience from within and prior to coming with Sterling Energy.
Due Diligence Process (includes, but not limited to):
Business Economics - capital cost analysis, base operating scenarios, economic evaluation model, fuel and operating scenario evaluation, fuel option scenario evaluation results and conclusions, comparison to other projections which our client may have.
General Management - staffing levels and organization, management practices and systems, union labor attitudes and issues, and maintenance management practices and systems.
Contracts - review and/or re-negotiation of Power Sales Agreement, Fuel Supply Agreements, Steam Sales Agreement, and Operations and Maintenance Agreements.
Project Technical Issues - general project condition, specific areas of potential or current equipment problems, operating regime, fuel selection and emissions, equipment or spares redundancy or needs, and environmental issues.
Between the time the commitment to purchase has been made and the financial closing, there is an enormous amount of work involved in the strategy, preparation, and execution of a smooth transition. Although transitions vary greatly in scope and the issues involved, the goals are always the same: to build the necessary relationships, and have the tools in place to integrate the new organization as quickly, painlessly, and economically as possible.
Plant Closure and New Owner Transition:
Sale and Closing - resolution of sale issues such as assignment of contracts, guarantees, rights, environmental or site responsibility, and warranties, financing issues such as property and sales tax, title insurance, cash flow, major maintenance reserves, and providing information and reports to the bank's engineers, establishing closing value, and providing technical support for the financing.
Management Systems - business plan, budgeting system, organization and staffing plan and execution, and management recruiting.
Business Systems - administrative systems and team, owner interfaces, public relations, information systems installation or extraction from the old system, procurement, document and data control, records control, communications systems, and training on all of the above.
Personnel Systems - benefits program, retirement program conversion, team member hiring package, HR information management, compensation, bargaining unit agreement, policy integration and/or development, health and safety, and security systems, and procedure development and training on the above.
Financial Systems - treasury and banking, accounting, budgeting, payroll, taxes, insurance, procedure development and training on the above.
Payroll System - current benefits and union rules, software, banking protocol, processing, procedures and training.
Compliance Systems - legal (licenses, EEO, AAP, filings, certifications, approvals, etc.), regulatory (HSR, DPUC, FERC, FERC Market Based Rate, city approval, etc.), and environmental (air permit, water permits, hazardous waste, storage tank regulations and permits, radioactive materials license, etc.)
Marketing and Sales Systems - power marketing plan, IT system requirements, execute contracts, meet clearing house requirements, Energy Trading Program, and risk management system.
Procurement Systems - Inventory of property, fuel and spares, assignment of contracts, credit arrangements, policies and procedures, and training of the above.
Transmission and Distribution - transmission agreements, application for service, interconnection agreement, and standby services agreement.
Engineering - capital investment plan, overhaul management, preventive, predictive and planned maintenance program, environmental management, waste water plan, configuration management plan, plant performance systems, plant systems assessment and plan, engineering services agreements, purchase order technical specifications, electrical metering and billing process, protection, water chemistry, fuel metering, and ASME code issues.
Production Systems - physical plant management, change in culture, Improvement and Management Plan, administrative systems, Market Based Production Plan, labor agreement administration, plant contracts, operating procedures, maintenance and materials management program, training on the above, testing and implementation, plant performance requirements for maximum value, and identification and resolution of operating issues (black start issues, switching of emergency TXF, switching and tagging, generator OCBs/disconnects, emergency access, etc.).
Project Fact Sheets are available for your review which represent a small fraction of the many assignments we've taken on to evaluate the economics, physical condition, management practices and operation contracts of plants for potential investors. Click Here to view the Project Fact Sheets.
