Utilities Overview - Ernst & Young - United States

How do you manage through the recession and position your company for growth? Our power and utilities professionals and other sector leaders conducted over 1500 client meetings and identified some overarching themes. Proactive capital allocation, steps to accelerate decision-making and an increased focus on risk management could mean the difference between surviving and thriving.

The US economy is in economical difficulties, and President Obama’s $787 billion stimulus package has introduced tax cuts and targeted priority investments that are geared to supporting economic recovery and saving or creating and estimated 3.5 million jobs. The package will have a significant impact on the power and utilities industry. This paper (pdf, 106.4kb)  summarizes the key tax changes and new investment incentives in light of the economic, technological and environmental challenges the industry is facing over the next several years.

Power and utility companies depend on assets to drive their businesses. The increasing likelihood that the US will adopt International Financial Reporting Standards (IFRS) in the not-so-distant future has prompted many power and utilities companies to consider the impact the conversion from GAAP to IFRS will have on the accounting for these critical assets. Tune into the archived website below to hear the impact the conversion will have on power and utilities assets.  http://webcast.ey.com/?progid=1526

The Americas Power & Utilities Center is pleased to release The power (and utility) of IFRS: how the adoption of IFRS will affect the US power and utilities industry (pdf, 2.5mb) .  The paper focuses on seven key issues we believe companies should consider in assessing the effects of conversion to IFRS from US Generally Accepted Accounting Principles (US GAAP): the effects of IFRS on regulatory accounting, long-lived assets, impairment considerations, derivatives and financial instruments, emission rights, prorata consolidation and joint ventures and tax and planning/transition issues.

Energy and other tax provisions impacting the Power & Utilities Industry
The American Recovery and Reinvestment Act of 2009, signed by President Obama on February 17th, includes billions of dollars for incentives, credits and grants to stimulate growth in the power and utilities sector. Tune into the archived webcast below that will address the impact of the stimulus legislation on the power and utilities industry.
http://webcast.ey.com/?progid=1602

The transition to International Financial Reporting Standards (IFRS) could have a significant impact on the power and utilities industry. On 18 September 2008, the Ernst & Young Americas Power & Utilities Center hosted a Thought Center Webcast on how the transition to IFRS from US GAAP is likely to affect power and utility companies both in terms of business operations and financial statements.

Conversion to IFRS may be the largest single change of accounting policies and procedures ever undertaken by US power and utilities companies. Find out about the main differences between IFRS and US GAAP (pdf, 332kb), lessons learned from the European Union (EU) and key implementation issues US public companies should be considering today.

In the June 2009 edition of our magazine, world leading companies like EDF, E.ON, Gazprom, Southern Company and Vattenfall talk about their ambitious new projects, their vision for the future and the challenge of refocusing business plans in a tighter economy. We also explore the business impact of new carbon restrictions and ask: how should we spend our money to battle climate change?  Access the new issue here (pdf, 2mb).