Power companies around the world face challenges from deregulation, competition, privatization and globalization. These trends have created a vital need for new business models and a demand for new technologies which in turn introduce risks to the industry that are unparalleled in size and magnitude.
Marsh's power and utility experts offer specialized insurance brokerage, loss control and claims management services as well as risk mapping and strategic risk consulting to assess a company's total risk profile. Risk mitigation strategies include risk-based asset management.
The Power and Utilities Practice offers the following services and expertise:
Power Price Protection
These products provide financial protection in the event an unplanned outage at a generating facility occurs in combination with a peak in the price of replacement power. Coverage is available in those areas where there is a liquid energy trading market. There are numerous ways to enhance these contracts with additional coverage triggers such as temperature and humidity.
Independent Power Project Services/Credit Enhancement
To meet the needs of companies that own, build, operate, or maintain power plants anywhere in the world, the Power and Utility Practice teams with other Marsh experts to review contracts and identify political risk exposures, lender requirements and local insurance requirements. Marsh's Power and Utility professionals begin working with clients when projects are still on the drawing board. We have worked with project principles and lenders to structure deals with credit enhancements that lower clients' financing costs and allow projects to go forward with the highest degree of lender confidence.
Merger and Acquisitions
Mergers and acquisitions in the power industry continue at a record pace. Costs associated with M&A activity can be substantial. A review of recent transactions for utilities indicates that these transaction costs can range from $10 million to $35 million and more. In addition, a significant number of utility mergers fail due to regulatory intervention, shareholder disapproval, competing bids, withdrawal of one party, or failure to meet closing conditions.
Marsh's Private Equity Merger and Acquisition Services can assist companies contemplating a merger or acquisition to examine risk issues involved with M&A and create solutions.
Marsh assists power and utility clients on matters related to employee benefits, absence management, workforce composition, performance optimization, international acquisitions, workers compensation, managing change and merger integration.
We deliver a broad range of related services associated with environmental clean-up, cost capping and risk strategy to ensure that the costs associated with clean-ups are contained within the projected budget. This expertise is also called upon in Merger & Acquisition activity.