Observing the Risk
A Brief Look at Energy Risk Management
I recently had the good fortune to work on an especially challenging and interesting client engagement in the field of Energy Risk Management. Our client was an electricity retailer, not the largest in the state, but not the smallest either. The challenges that this client faced appear to be shared amongst the majority, if not all, of the energy retailers in New South Wales. With Full Retail Contestability (FRC) now in place, and the Enron memories (and lawsuits) still fresh in everyone’s mind, Energy Risk Management is increasingly being placed in the spotlight. With such a high political profile and large financial stakes, electricity supply and sales must be insulated from disasters arising from poor risk management. Any problems with systems, methodologies and/or procedures had to be identified and plans put in place to address such problems.
