Article

Using multiyear financial planning to guide your utility

Nov. 10, 2022 · Authored by Doug Baldessari

Just as it would be nearly impossible to guide a ship without a map and compass, public utility management needs a multiyear financial plan and certain tools to help them with making decisions, assuring viability, employing strategic planning, supporting operations all while minimizing rate impact. 

Keeping up with increased operating expenses and declining cash reserves and revenues while at the same time replacing aging infrastructure and adopting new technologies is a challenge for utilities that requires effective multiyear financial and capital planning. Financial planning related to capital planning is even more important bearing in mind the economic impact of the recent significant expense and project cost increases may have had on a utility, which likely resulted in lower cash balances and reduced revenues available for operations and capital projects. 

In this article, originally published in the Ohio Water Environment Association's Buckeye Bulletin, Principal Doug Baldessari highlights the role and advantages of multiyear financial and capital planning for utilities as well as optimal methods for financing capital projects in the face pandemic and inflation-driven challenges.