Modelling of risk drivers in valuation of electricity distribution business

Author

Bichpuriya, Yogesh ; Chitkara, Puneet

Author_Institution

Dept. of Electr. Eng., Indian Inst. of Technol. Bombay, Mumbai, India

fYear

2009

fDate

27-29 Dec. 2009

Firstpage

1

Lastpage

6

Abstract

Privatization experience in developing countries has heightened investors´ sensitivity to regulatory and business risk. In this paper, a model for business valuation of electricity distribution company under uncertainties is presented. Risks due to power purchase cost, sales volume, consumer mix, losses, collection shortfall, interest rate and regulatory mechanisms have been considered. Stochastic behavior for cash flow components is discussed and the distribution of present values is obtained using Monte Carlo simulation. The model is simulated for five different scenarios. Simulation results are reported in the paper.

Keywords

Monte Carlo methods; costing; power distribution economics; risk analysis; stochastic processes; Monte Carlo simulation; business valuation; cash flow components; consumer mix; electricity distribution business; investors; power purchase cost; risk drivers; sales volume; stochastic behavior; Books; Business; Companies; Cost accounting; Electromagnetic interference; Marketing and sales; Paper technology; Power system modeling; Stochastic processes; Uncertainty; Business valuation; distribution company; risks;

fLanguage

English

Publisher

ieee

Conference_Titel

Power Systems, 2009. ICPS '09. International Conference on

Conference_Location

Kharagpur

Print_ISBN

978-1-4244-4330-7

Electronic_ISBN

978-1-4244-4331-4

Type

conf

DOI

10.1109/ICPWS.2009.5442698

Filename

5442698