Explaining timing risks and magnitude risks.
David A. Foti works at Accenture and is a frequent contributer to Public Utilities Fortnightly. He may be contacted at email@example.com. Martin F. Nellius is vice president, supply acquisition, for Entergy Solutions Supply Ltd. He has worked in the energy industry for 21 years, and is responsible for various retail operations including power procurement, portfolio management, and risk mitigation strategies for Entergy Solutions Supply.
Tariff risk is that risk which the marketer incurs downstream of the uplift. This risk can be broken into Timing Risk (I - III) and Magnitude Risk (IV-VI) as illustrated below.