Over the years, it has become increasingly difficult for municipalities to extract value from their Local Distribution Companies (LDCs). Not only do tight regulations limit how much revenue an LDC can bring in, but they also constrain how LDCs can pursue their strategic and growth objectives. In light of these restrictions, a growing number of municipalities are beginning to explore non-regulated opportunities for investment—with encouraging results.
Given their history and experience, LDCs have the foundational resources, infrastructure and expertise to explore ancillary business-to-consumer opportunities. From technology applications like fibre and broadband to water heater rentals, the demand for additional LDC services is there. LDCs and municipalities alike simply have to uncover ways to seize them.
For many, this will require the creation and implementation of a sound, non-regulated investment strategy—one that clearly defines the municipality’s strategic rationale for exploring non-regulated LDC opportunities. Given the countless possibilities that abound, this roadmap makes it easier for municipalities to focus their efforts and pursue opportunities that best meet their most pressing needs—whether those needs are mitigating industry disruption through new products and services; better using excess resources; protecting, maintaining or growing dividend streams; or diversifying their investment portfolios.
Grant Thornton LLP has helped many municipalities navigate the complex non-regulatory investment terrain—and seize opportunities best-suited to their geography, core competencies, shareholders’ risk tolerance and access to capital. As such, many have expanded the capabilities of their LDCs to include power generation (e.g., hydro, solar or biogas); engineering, procurement and construction (EPC) contracting; water cycle management; conservation demand management; and energy storage, to name a few—making their communities stronger in the process.
To learn more about how Grant Thornton can help maximize your LDC, contact us.