Energy & Utilities

AFUDC (Allowance for Funds Used During Construction) represents the cost of capital used to finance utility plant construction. It is capitalized as part of the plant cost under FERC accounting rules and recovered in rates over the plant's useful life. SMAART calculates AFUDC in compliance with FERC regulations and ensures proper separation of debt and equity components.

The Section 48 Investment Tax Credit (ITC) provides a credit equal to a percentage of the cost basis of qualifying solar, wind, storage, and other clean energy property. The Inflation Reduction Act significantly expanded these credits and made them transferable and direct-pay eligible. SMAART structures investments to maximize credit utilization and manages the complex partnership accounting required for tax equity transactions.

Under the full-cost method, all exploration and development costs, including dry holes, are pooled and depleted based on proved reserves. Under the successful-efforts method, only costs of successful wells are capitalized; dry hole costs are expensed immediately. The choice significantly impacts reported earnings and balance sheet assets. SMAART helps oil and gas companies select and implement the appropriate method.

Yes. Energy M&A involves specialized considerations including reserve valuation, regulatory approval processes, stranded cost analysis, tax attribute preservation, and environmental liability assessment. SMAART provides M&A financial advisory, due diligence, purchase price allocation, and post-merger integration support for energy sector transactions.