Despite the variable nature of the resource, wind can be managed so that it will not impair the reliability of a utility system. The Federal Energy Regulatory Commission proposed a rule that would...
Betting Against the Gods
In search of the Holy Grail of utility risk management.
executives as an extension of a utility’s risk management department, it should not be thought of as such. Even so some utility executives may think that it might be cheaper in terms of saving on risk management IT systems and risk management personnel. But Napolitano sees his ideal role as being a partnership.
“I think a fair transaction is where both parties understand the nature of the risk and the bargain that has been struck to transfer the risk from party A to party B. So, we have found companies getting a better handle on how the counterparty views these risks. They are developing not an execution capability like an investment bank, but the measurement capabilities to look at and quantify the risks the same way that we would, so that we all understand what the facts are and they can make an intelligent decision on what is best for their shareholders.”