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Tioga Energy uses @RISK from Palisade to predict financial savings on solar energy agreements in California

June 2008, California - Tioga Energy, a leading supplier of renewable energy services to commercial, government, and non-profit institutions, is using @RISK from Palisade to illustrate to customers in California the potential financial benefits of signing up to a solar Power Purchase Agreement (PPA).

Tioga provides project financing through its SurePathSM Solar (PPAs), and maintains and operates solar systems on behalf of its customers. Tioga’s offering delivers predictably priced power and enables organisations to to both 'green' their operations and reduce energy costs.  In order to illustrate the benefits of solar, Tioga needs to estimate future electricity prices and make comparisons by showing the savings from a new solar system.

To forecast possible price increases, Tioga Energy inputs California's historical electricity rate data into a model developed using Palisade's risk analysis software, @RISK. This generates a probability distribution for electricity rate rises over the 20-year PPA period, which shows that there is a 25 percent likelihood that price increases will be less than 4.8 percent, and a 25 percent chance that rate rises would be more than 8.7 percent.

The @RISK model therefore helps Tioga Energy evaluate the likelihood that a customer will save money for a variety of PPA scenarios (i.e. the rate at which electricity would initially be charged and the amount by which it would then increase each year). It also calculates the magnitude of savings for the different combinations of first year costs and subsequent rises.  Consumers are therefore able to better understand the pricing and make an informed decision about whether to sign up for a PPA.

“Using historical data and @RISK's modelling capacity, we can offer consumers a robust view of the potential benefits of a solar PPA. This enables them to hedge against rising electricity rates, as well as feel confident that they are playing a part in tackling global warming,” explains Kristian Hanelt, VP Project Finance for Tioga Energy.

Hanelt confirms: “@RISK is a flexible and technically adept tool that, in addition to enabling in-depth analysis, makes it easy for us to present relatively complex ideas in an easy-to-understand graphical format. As a result, it plays a key role in helping Tioga Energy to differentiate itself from its competitors.”

Tioga Energy's full report on its study, 'Hedging Against Utility Rate Fluctuations with a Solar PPA' is available to download.

For more information, contact:

Randy Heffernan
Tel: +1 607-277-8000
Fax: +1 607-277-8001

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