How to sort out strategies and weather the storm.
Andrew S. Hyman, Michael J. Denton, Leonard S. Hyman, Bradford G. Leach, and Gary A. Walter
Unless embraced as an integral part of the business strategy, risk management is nothing more than a bureaucratic exercise that lulls the management and directors into a false sense of security.
Exclusive interviews with the CEOs of five regional transmission systems.
Exclusive interviews with CEOs at five regional independent transmission system operators: Phil Harris, at PJM; Gordon van Welie, at ISO New England; Yakout Monsour, at the California ISO; Graham Edwards, at MISO; and Mark Lynch, at the New York ISO.
Companies should adopt a far more robust metric.
Market risk remains one of the most significant issues for gas and power merchants. The SEC requires disclosure of market risks in a company’s annual filings. However, the allowable metrics fail to communicate the type of information an investor actually can use to gain an understanding of the market risk embedded in a company’s business.
Do you know what your legal exposure is?
James E. Bowers Esq. and David Doot
Enron has provided lessons for both corporations generally as well as the energy industry specifically. How can energy market participants effectively manage the risks inherent in complying with those regulatory reforms?
How to avoid the billions of dollars in costs that were disallowed during the last round of construction.
With nuclear energy again being viewed as part of the solution for the United States’ energy needs, a number of companies are starting the early permitting and licensing process. Meeting budget targets means the industry must address project-management issues and the risk of end-of-project disallowances for any company or regulator to be able to move forward with new construction.
The unclear language governing termination rights is subject to interpretation and extraordinary financial risk.
Brett Friedman and Justin Harlow
How does one determine the value of power contracts under early termination? Given the vagaries of the contracts themselves, the process is neither clear nor standard, and often results in protracted and costly litigation. Did the counterparty have the right to terminate in the first place?
Energy Trading & Risk Management: A better framework for making decisions is required to ensure earnings stability and shareholder value in the utilities industry.
Henry Fayne, Michael Gettings, Wes Mitchell, and Gary Vicinus
Although utilities are refocusing attention on their traditional utility businesses, it is clear that the traditional utility decision-making framework is not sufficiently robust to meet the needs of today's utility executive. An effective executive decision framework provides better answers in the complex utility environment that exists today.
Energy Trading & Risk Management: How to evaluate risk and improve decision-making capabilities.
James W. DeLoach and David M. Johnson
With a heightened focus on risk management, it has become increasingly clear that traditional risk-management approaches do not adequately identify, evaluate and manage risk. An ERM approach integrates risk management with existing management processes, identifies future events that can have both positive and negative effects, and evaluates the effectiveness of strategies for managing the organization's exposure to those possible future events. ERM transforms risk management to a proactive, continuous, value-based, broadly focused, and process-driven activity.
How to price new load-servicing contracts while incorporating market-risk analysis into such deals.
Why have basic generation service auctions historically been overly competitive given the prevailing market prices at the time? Here are four steps to determine correctly what should the bid price should be.
Why a risk-hedging product for small customers isn't the gamble you may think.
Michael O’Sheasy and Mike Becker
Some innovators in the electric industry recently began offering financial hedging products that absorb risk from large customers. Why not offer this kind of protection to customers with small electric loads? Protecting customers from price risk is the essence of flat pricing, and it is where a company can step in and capitalize.