Assessment of Strategic Options
GDS Report July 2016
GDS Associates is an energy consulting firm with a sterling national reputation in the utility industry. BEC asked them to undertake an assessment of Beartooth’s decision-making process and study of options. Their Phase 1 Report was presented at the board meeting on July 26, 2016.
This draft analysis was an initial look at the potential effects if the Beartooth co-op were to consolidate with two other co-ops. This study came about because Lower Valley Energy and Fall River Rural Electric jointly announced on January 20, 2016 the intention to investigate consolidating their two co-ops into a new and larger co-op.
The Beartooth management agreement with Lower Valley Energy provided for the boards of Beartooth and Lower Valley to consider a merger. Since a potential merger with Lower Valley was already an option, in February of 2016, Beartooth was invited to consider a new and larger cooperative. EES Consulting was asked to begin an analysis of what could result from a consolidation. An initial report was provided to the board in March and then updated in April 2016.
Some months later, Lower Valley and Fall River decided not to consolidate.
Consequently, as the possibility of consolidation was dropped, Beartooth did not pursue further analysis. In late 2016, the Beartooth board decided not to continue with additional study on the effects of a merger with LVE alone. Instead, a model was developed to examine the possibilities for the co-op remaining as an independent entity. See the Standalone Forecast here.
Note: Beartooth is not currently considering either a merger or a consolidation.