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New business models and strategic options


 

 

"In order to ensure a secure energy supply, the IECP business model and structures must move forward and adapt continuously to energy policy requirements. Backed by profound knowledge of the industry, TM.RESULTS focused totally on us and our search for an optimal solution. Together with TM.RESULTS, we gained clarity and came up with the new strategic orientation of our company."

Alessandro Della Vedova,
Podestà, Comune di Poschiavo

 

Seizing opportunities and overcoming the challenges of an energy provider in a mountainous canton

The energy sector is in flux. Factors such as market liberalization, shifts in production and supply, growing (business & private) customer demands, and constantly evolving regulations (from the current "Cost-Plus" to "Sunshine" and "incentive-based regulation") exert increasing pressure on all utilities, their structures and management. Small and medium-sized energy providers and distribution system operators (DSO) have few employees and a correspondingly limited pool of know-how. This dramatically underlines the impact of the industry's transformation. However, new prospects and opportunities are opening a promising future for innovative utilities and distribution system operators, even those located in remote mountainous cantons.

The "Impresa Elettrica Comunale di Poschiavo" (IECP) supplies energy to the municipality of Poschiavo and the surrounding region. With a small technical team and a partnership with Repower, IECP serves commercial and retail customers. It provides planning, operational management and maintenance of its medium and low voltage network. Administrative tasks, customer care and billing, as well as the financial management are carried out by the municipality.

How does a distribution system operator develop a sustainable organizational structure and strategic positioning?

Due to changing market conditions – liberalization and regulatory processes are in full swing – IECP came under increasing pressure. Faced with a steady increase in administrative tasks (for example, increased regulation by ElCom) and cost pressures, management needed to become more efficient.

The Poschiavo city council needs access to a secure and efficient energy supply for the community and also looks to benefit from emerging opportunities. Therefore, the city council decided to review strategic options to develop a sustainable and optimized organizational structure for IECP.

TM.RESULTS helped the Poschiavo city council identify, evaluate and rate strategic options and define the future organizational structure of the IECP. All relevant stakeholders, such as community members, employees of IECP and potential partners (incl. Repower) participated in the process. TM.RESULTS presented concrete, realistic and actionable options, giving the "Consiglio Comunale" executive body and the "Giunta Comunale" legislature a viable basis for a decision about a future-oriented and sustainable organizational structure, which still guarantees a secure energy supply at attractive conditions.

TM.RESULTS supported the teams through the following steps:

  • Current situation analysis: led workshops and interviews to help stakeholders gain a common understanding of the current situation (business model, value chain, and customer profiles and tariff structures, network structures and network value).
  • Develop a shared vision and political orientation with strategic objectives and success factors.
  • Define evaluation criteria and models to evaluate organizational options / scenarios.
  • Identify and describe five specific scenarios; starting with a separate, independent organizational structure, through various forms of cooperation with defined partners, up to a sale of all network assets and outsourcing of personnel.
  • Evaluate various scenarios, clearly showing advantages and opportunities as well as disadvantages and risks.
  • Consequences and financial implications for the community and IECP personnel; assess and point out solutions.
  • Define personnel and partner agreements in an initial draft.
  • Determine the roadmap.
  • Present and discuss the results and decision parameters to stakeholders; in particular for the municipality’s "Consiglio" and "Giunta Comunale".

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