Elevated Risk
In an open letter to directors, IBM’s energy security lead recommends appointing a senior executive with authority to effect cultural change.
Achieving security requires a new office in the C-suite. An open letter to utility directors.
Risk management
Hedging or Betting?
Lacking regulatory oversight, financial hedges turn into risky speculation.
Many utilities engage in hedging to protect customers from price spikes. But unless regulators are involved in crafting and monitoring these programs, they can turn into speculative ventures that put ratepayers at risk — for the benefit of shareholders.
Risk Management Starts at the Top
How to sort out strategies and weather the storm.
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.
High Performance? Your Strategy Matters
Leadership requires alignment between performance measurement and strategic priorities.
A defense of the total return to shareholders (TRS). Our authors use TRS as the bottom-line performance indicator, and come up with a number of performance insights.
Automatic Meter Reading: Debunking the Myths
Advanced Meter Reading
Advanced Meter Reading
An executive speaks out.
I think, frankly, that it's those marketing folks who conjure up all the myths about advanced meter reading. Rather than sheepishly admitting that their product is deficient in multiple areas, corporate spinmeisters spin webs of words and images into difficult-to-understand concepts, hoping upon hope they can fool us. They bank on the old adage: tell a lie enough and soon people will begin to believe it.
Corporate Risk: What Does Management Really Know?
A short list of questions that every board member and senior manager should be able to answer.
“We pursue a disciplined approach to risk management" says the CEO of a major utility during the company's earnings call with analysts and investors. In this era of increased scrutiny over corporate governance, how can senior management and the board be certain that this statement is accurate, and where does the discipline begin?
Risk Appetites: How Hungry Are Utility Investors?
An effective risk-management strategy depends on knowing your shareholder’s idea of value.
How do shareholder relations link to risk-management policy? The answer: Utilities have to communicate to shareholders a particular set of operating strategies that will attain certain financial results. Risky activities both enhance and threaten those financial results. Therefore, policies must define how risky strategies are formulated, approved, controlled, and measured.
Risk-Management Principles for the Utility CEO
Board coordination is the key.
Board coordination is the key.
Many utility CEOs are happy to pass off risk-management policy to the CFO and the head of the trading desk. After all, with deregulation and re-regulation, collapsing spark spreads, hypersensitive rating agencies, and nervous investors, there is enough to worry about. So what's the problem? If the financial guys control and report the risks and profits and losses (P&L) within risk tolerances, why should the CEO be concerned about risk management?
Frontlines
The Northeast Blackout goes political.
Frontlines
The Northeast Blackout goes political.
Nearly a year ago, cover story announced the rise of the chief risk officer (CRO). "Utility senior management is becoming positively enamored with the office of the CRO," we said. "Fully 40 percent of America's CROs work for utilities and energy companies."
Resource Planning After the Crash
How to update yesterday's IRP model to account for tomorrow's risk profile.
How to update yesterday's IRP model to account for tomorrow's risk profile.
The process we know today as integrated resource planning (IRP) got its start back in the 1980s, when regulators first came to grips with nuclear plant cost overruns and urged utilities in effect to hedge that risk-to give equal weight to conservation, "negawatts," and demand-side management (DSM) as sources of new electric capacity.