Business Essentials for Utility Engineers / Edition 1

by Richard E. Brown

Overview

It is no longer acceptable for utility engineers to make spending decisions solely because they make good engineering sense. In today’s environment, they must also demonstrate solid business acumen and show that recommendations make good business sense. With this goal in mind, Business Essentials for Utility Engineers systematically presents each business topic to arm engineers with the tools and vocabulary necessary to be more effective when interacting with senior management, and for promotion to senior management.

This book covers all business concepts important to utility engineers, including regulation, ratemaking, accounting, finance, risk management, economics, budgeting, and asset management. The author applies his vast corporate experience to give readers a solid foundation for business theory, discussing the idiosyncrasies of utilities and using advanced mathematics to demonstrate business concepts. He also explains how to properly apply this theory to utilities, expounding on specific business skills that will greatly benefit utility engineers in their daily jobs.

Chapters are organized to build sequentially upon each other, and take advantage of the mathematical sophistication and deductive nature of engineers when presenting material. After reading this book, utility engineers will view their industry from a new perspective, and will have a greatly expanded business vocabulary. Suitable for self-study, undergraduate study, graduate study, or as a desk reference, this book provides a robust framework for correct business thinking and a solid foundation for further learning.

WAtch Richard E. Brown talk about his book at: http://youtu.be/gdyjq77nQFI

Product Details

ISBN-13:	9781439811962
Publisher:	Taylor & Francis
Publication date:	02/09/2010
Pages:	354
Product dimensions:	6.40(w) x 9.30(h) x 1.00(d)

About the Author

Richard E. Brown is the Vice President of Operations for Quanta Technology.

Table of Contents

Preface ix

Author xv

1 Utilities 1

1.1 Types of Utilities 2

1.2 Natural Monopolies 15

1.3 Utility Ownership 16

1.4 Utility Regulation 20

1.5 Utility Rates 23

1.6 Service Standards 25

1.7 Deregulation 28

1.8 Summary 30

1.9 Study Questions 31

2 Accounting 33

2.1 The Basic Accounting Equation 33

2.2 Journals, Ledgers, and Accounts 38

2.3 Accounting Principles 41

2.4 Financial Statements 55

2.5 Other Types of Accounting 74

2.6 Summary 82

2.7 Study Questions 82

3 Economics 85

3.1 Supply and Demand 86

3.2 Market Pricing 90

3.3 Producer Surplus 95

3.4 Monopolistic Pricing 97

3.5 Business Cycles 101

3.6 Summary 106

3.7 Study Questions 107

4 Finance 109

4.1 Time Value of Money 110

4.2 Company Valuation 121

4.3 Market Efficiency 124

4.4 Capital Structure 136

4.5 Tax Shields 140

4.6 Bankruptcy 141

4.7 Summary 145

4.8 Study Questions 145

5 Risk 147

5.1 Probability and Statistics 148

5.2 Stock Price Movement 158

5.3 Diversification 160

5.4 Portfolio Theory 165

5.5 Capital Asset Pricing Model 173

5.6 Financial Options 180

5.7 Real Options 19l

5.8 Summary 192

5.9 Study Questions 194

6 Financial Ratios 195

6.1 Profitability Ratios 196

6.2 Activity Ratios 200

6.3 Leverage Ratios 203

6.4 Liquidity Ratios 204

6.5 Market Ratios 205

6.6 DuPont Analysis 209

6.7 Residual Income and EVA 211

6.8 Summary 213

6.9 Study Questions 214

7 Ratemaking 215

7.1 Regulatory Goals 216

7.2 Revenue Requirements and the Rate Base 219

7.3 Rate Design 222

7.4 Rate Cases 237

7.5 Rate Base Misconceptions 240

7.6 Summary 244

7.7 Study Questions 245

8 Budgeting 247

8.1 Top-Down Budgeting 248

8.2 Bottom-Up Planning 256

8.3 Types of Budgets 261

8.4 Project Prioritization 264

8.5 Business Case Justification 280

8.6 Summary 300

8.7 Study Questions 301

9 Asset Management 303

9.1 What Is Asset Management? 304

9.2 History of Utilities 306

9.3 History of Asset Management 309

9.4 Organizational Functions 311

9.5 Asset Management Process 313

9.6 Summary 316

9.7 Study Questions 317

Index 319

What People are Saying About This

From the Publisher

... The author does excellent work in organizing, describing, and explaining the business concepts. All concepts are clearly and accurately explained, and the material is presented at an appropriate level of complexity and depth ... informative and valuable as a reference book. I recommend the book to any utility engineer responsible for planning, designing, managing, or maintaining utility infrastructure.
—Robert E. Bisson, IEEE Power & Energy Magazine

Editorial Reviews

... The author does excellent work in organizing, describing, and explaining the business concepts. All concepts are clearly and accurately explained, and the material is presented at an appropriate level of complexity and depth ... informative and valuable as a reference book. I recommend the book to any utility engineer responsible for planning, designing, managing, or maintaining utility infrastructure.
—Robert E. Bisson, IEEE Power & Energy Magazine

From the Publisher