Protecting water and wastewater utilities from weather risk
Lotic Labs has deep experience helping utilities manage environmental risks to make better financial decisions. We specialize in leveraging advanced data science techniques and machine learning technologies to protect utilities against weather risk. Our team has worked in a variety of water-dependent commodity industries, as well as finance organizations managing trillions of dollars of assets. We're backed by the National Science Foundation (NSF), the Clean Energy Trust (CET), and Imagine H2O.
Data-driven Risk Assessments
Our approach entails conducting a risk assessment of our client's current financial and operational exposure to weather volatility. The assessment provides managers with a detailed, quantitative understanding of the relationship between weather variables, revenue, budget variance, and demand for water. These analyses inform mid- and long-term decisions regarding the implementation of risk transfer or insurance contracts to protect against weather. In addition, the assessment can be used to improve rate setting, financial planning, supply and demand forecasting, and integrated water resource modeling. We provide our clients with the cleaned and normalized data that underpins our assessments, so that managers can continue to gain insights over time.
Risk Transfer Policies
We design customized Weather Risk Transfer contracts to provide utilities with payouts during droughts and abnormally wet conditions. Like insurance, these policies protect utilities against the destabilizing consequences of lost revenue and increased costs. Risk Transfer contracts reduce the need for budget cuts, maintenance deferral, and surcharges to fund cash reserve funds. We work with utilities to design optimal protection, including smaller, pilot-scale contracts when desired.