Power Sector

Sectors We Serve

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Power Sector

Electric power is a unique resource. Energy cannot be stored and has no shelf life. We support companies in all areas of the energy sector ranging from distribution and transmission lines moving electricity to the plants that generate the power. We provide a variety of services to our clients to ensure fair assessments and taxation. This includes working with assessors to prepare initial cost analysis and capital spending reviews to assist in the determination of assessable costs. New large projects that are replacing aging existing plants, ongoing capital maintenance and life achievement work, annual compliance reporting and assessment and tax management services represent some of the services we provide the energy sector . Our partnership and support of our clients assists them to better meet the changing assessment regulatory environment and ensures taxes are mitigated wherever possible.

 

 


Case Studies

Power Plant Assessment with antiquated cost information

 

Increasing Demands on Energy Clients

 

Making Power Competitive Again

 


Sample Clients

Altalink
ATCO Power
Fortis Alberta Inc
Hydro-Quebec
MAXIM Power
 

Case Study 1: Powerplant Assessment with Antiquated Cost Information

Issue

AEC is retained to review and advise on the property assessment of a large generation asset. The main challenge includes determining the fairness and correctness of the assessment decades after the original cost records used to prepare the initial assessment are lost.

Danger

The assessing authorities and the ratepayer cannot easily analyze the basis for the assessment. Over many decades the rules for assessment have changed and the original capital reports used to determine the assessments both for buildings and equipment are lost. In addition, recent changes varying tax rates between asset classes require a review and analysis in order to isolate errors or opportunities in the re allocation of the original capital spending.

Why AEC

AEC has a reputation for detailed machinery and equipment and building analysis. AEC also has expertise in detailed insurance valuations that are well suited to determine the various components of the facilities to properly allocate assets between recently changed tax classifications.

Client Success

AEC’s detailed isolation of the various components of the complex generation asset results in a favourable re allocation of the buildings and equipment to more favourable tax classifications.

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Case Study 2: Increasing Demands on Energy Clients

Issue

AEC’s Energy clients constantly have to deal with changes in legislation and a higher demand for meticulous data associated with the various components of their business.

Danger

The ATM process for an Energy client is an intricate one. It includes review of assessment data, verification of tax levies, and identification of anomalies and opportunities for reductions as well as allocation of cost centers to wells, pipelines, surface equipment, and electric power systems.

This means that AEC’s Energy team is constantly challenged to keep up with the overwhelming amount of information and the short requirements for its turn-around time, without increasing the cost to manage to the Energy clients.

Why AEC

A key contributor to the 2012 success was AEC’s exclusive Canadian rights to the ONESOURCE Property Tax™ (OPT) software system. Using OPT allowed the ATM team not only to efficiently process the immense volume of taxes, but to also provide detailed reporting to our clients on their tax liability. Where requested, taxes were uploaded directly into our client’s payable system – a practise that is becoming more popular as companies move to online payment approvals. These improvements have allowed us to provide our clients with the most advanced customized reporting in the area of property taxation allowing them to be paid on time, avoiding costly penalties.

Client Success

Ai. After all the numbers were crunched, AEC’s Calgary-based Assessment & Tax Management (ATM) team proved that 2012 was a productive year. It was one marked by increased efficiency and unprecedented delivery of our Energy clients’ requirements. The final 2012 tax payment approval reports have been tallied; they have processed more than $165M in taxes for our Energy clients – in more than 450 jurisdictions in Western Canada and the Northern US!

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Case Study 3: Making Power Competitive Again

Issue

An AEC Client became concerned when it noticed significant unexpected and unusual increases in its assessments. They had expected the assessments and taxes on their aging generation fleet to narrow and stabilize predictably as end-of-life approached. Instead, assessment values and corresponding taxes were climbing alarmingly.

Danger

If the unprecedented assessment inflation continued, property tax – historically a minor expense to be properly tracked and paid – would soon have a material effect on profit and loss. Economic life would be shortened and overall profitability reduced, both in meaningful ways that would fundamentally alter the business case for all the Client’s assets going forward.

Why AEC

AEC is known as a firm with an affinity for finding real-world solutions to difficult, legislative, and structural challenges. With innovation, and the technical strength and inclination to approach problems from unconventional directions, AEC was recognized as possessing the capability to both find overlooked solutions and implement them to bring enduring, meaningful change. The Client didn’t know what the problem was but believed that the best firm to find and fix it was AEC.

Client Success

AEC identified two issues that, acting together, generated the alarming tax inflation. AEC designed a process address these issues and bring about meaningful change. First, AEC identified that the historic approach to assessing maintenance and other non-taxable capital spending had undergone a fundamental change. Most work previously exempted was now being captured. Second, AEC identified that assets were being valued like normal commercial property. No consideration was being given to the legislative and regulatory environment governing market value in the generation regime.

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