Risk Management

One of the often most overlooked aspects of energy procurement is the inherent risks involved when purchasing and or selling in an open market based rate environment. Developing a risk management framework for your firms energy exposure in terms of price, volume, compliance and carbon intensity is an absolute must. The key is developing a framework and implementing an energy procurement strategy for managing these risk components on a national scale.

These principles apply whether procuring energy supply from the market, the "utility", project development, on-site power generation, and other energy sources. @mpedup energy delivers leading-edge digital analytics, and an extensive experience in energy wholesale and retail marketing and trading to drive a targeted X% savings for our clients. Whether procuring electricity, natural gas, renewables, energy storage, hydrogen or on-site cogeneration, @mpedup energy is the premiere energy sourcing partner for your firm.

Natural gas and electricity are commodities that are traded in financial markets and have seen fluctuations in price of over 100% in the past two years alone. But that price volatility is manageable with the right tools. How do you achieve your goals, and yet make the most informed decision in the market?

@mpedup Energy utilizes customized financial analytics, statistical modeling, operational expertise and risk management tools to optimize energy portfolios for needs of our clients within risk tolerances either in the the wholesale or retail market segments. @mpedup also tracks regulatory and legislative developments through its market research and intelligence network, which keeps our clients updated on issues that may affect their energy programs and notifies them of any future opportunities to reduce and control energy costs.

Informed by our client’s innate goals for both low cost and budget stability, @mpedup Energy will recommend an energy procurement strategy within a risk management policy framework that best balances the client’s needs. We often recommend building portfolios of contracts over time given the current evolving marketplace but some with tenors upwards of 5-15 years. Our exposure modeling then informs our clients of the current risk to their budget and the range of probable cost outcomes from their current contracts and new ones they may be considering. We do the work and help our clients make rapid and informed decisions.

After obtaining an understanding of the client’s risk tolerance and energy related financial and hedge objectives and needs, the analysis will include the following below: Register Today to learn more about @mpedup's energy procurement process blueprint. It is completely free!

Risk Management Blueprint

1. Summary of the client’s existing energy usage, aggregated peak demand, spend, contracts and exposure, including an interval data analysis.
2. What commodities are consumed throughout the portfolio? (e.g. electricity, natural gas, fuel oil, etc.) Each commodity market has its own fundamental drivers (with overlaps), which also varies based on where your property(ies) is/are located.
3. How many regulatory regimes do your portfolio span? (e.g. NYISO, PJM, ERCOT, CAISO, NEISO, etc.) Each ISO has its own market design and nuances associated with various pricing components.
4. Are there local mandates that require you to report and disclose your energy data?
5. Are there local laws that require you to audit and retro-commission your facility(ies)?
6. Are there local laws that require you to upgrade building systems?
7. Are shareholders demanding more transparency through annual sustainability management reporting?
8. Are investors requiring participation in sustainability reporting schemas? (e.g. GRESB, CDP, ENERGY STAR)
9. Are you actively pursuing energy efficiency and/or DER opportunities?
10. Is your procurement strategy aligned with these operational changes to optimize payback and performance? Or are you throwing away money because one hand isn’t talking to the other?
11. Summary review of current market conditions and trends, including the fundamental drivers behind these trends and their implication for the client’s energy supply cost and service opportunities
12. Summary review of the client’s strategic supply alternatives by location, including a description of the risks and benefits of each procurement or service option.
13. A recommended energy procurement plan, contract structures, and associated budget implications
14. A current regulatory analysis
15. Supplier Credit Risk
16. Embedded Contract Risks (Compliance: such as Imblance Energy, RPS and Capacity)