Our team possesses a unique blend of experience, skills, and credentials essential for utility appraisal, including Accredited Senior Appraiser (ASA), Chartered Financial Analyst (CFA), Certified Public Accountant (CPA), Certified Valuation Analyst (CVA), and Registered Professional Engineer (PE). We have successfully completed numerous valuation assignments for public and private entities nationwide.

Purpose, Standard of Value, and Premise

Our Valuation services can be provided for a variety of purposes, including:

• Purchase and sale transactions (M&A)
• Purchase price allocation (Financial Reporting)
• Insurance Valuations
• Litigation Support (condemnation, damages, and other legal disputes)
• Liquidation
• Market lease rates

In addition, the intended purpose of valuation services, whether provided as a Business Valuation/Appraisal or a Calculation Engagement, also requires the appropriate identification of the standard and premise of value for each assignment. Fair Market Value of a utility system as a going concern is the most common standard and premise of value, involving valuation services for M&A, insurance, and market lease rates. Additional concepts of value can include Fair Value, Investment Value, and Liquidation Value, sometimes part of a planned discontinuance of operations. It is critical to appropriately identify the standard and premise of value.

Our valuation offerings include:

Business Valuation/Appraisal 

A utility system, generally consisting of integrated demand or supply, distribution or collection, and end-users of a commodity (e.g., water, wastewater, irrigation, solid waste, electricity, or gas) is a special purpose property. Since the assets are specifically designed, configured, and constructed solely as a utility system, no alternate highest and best use would be considered in developing a Conclusion of Value (a Conclusion of Value can be stated in a range of value as well as a single value). In addition, ownership of this special purpose property would be expected to include a bundle of rights that could include (if applicable to the system), but is not limited to, physical assets, certain real property, operating permits, or demand and supply contracts, specialized facilities, operational rights, service area rights, as well as other tangible and intangible assets. As a special purpose property, there is no going concern value for land, buildings, and equipment (PP&E) as a utility system or business enterprise independent of, or without the intangible rights and permits to provide services for a base of customers, operate with or without competition, and deliver an essential public purpose use to a generally protected, defined service area. As such, the development of a Conclusion of Value, whether defined as Fair Market Value, Fair Value, or Investment Value, requires the appropriate application of procedures, approaches, and methods that conform to the Uniform Standards of Professional Appraisal Practice (USPAP)

Calculation Engagement 

A Calculation Engagement is an alternative to a Business Valuation/Appraisal that involves the preparation of a Calculated Value or range of values of tangible or intangible assets, or both. It will utilize a predetermined valuation approach or approaches in consultation with the client. Possible approaches used for a Calculated Value, which are to be determined as part of an assignment, include a Cost Approach, an Income Approach, and a Market Approach. Given the limited, special-purpose nature of the market for utility systems, the selected methods and procedures for a Calculation Engagement will also be predetermined in consultation with the client. A Calculation Engagement will not include all the procedures required for a Business Valuation/Appraisal. If a Business Valuation/Appraisal is completed for the same assets, the results may be different.

Contact:

John Mastracchio, ASA, CFA, PE, Executive Vice President (jmastracchio@raftelis.com)

Steven McDonald, CVA, Chief Economist/Valuation Services (smcdonald@raftelis.com)