Over the last decade we have observed increased volatility in the energy markets. This is a product of a tightening supply/demand equation. Global demands for energy have accelerated especially with growth in China and India while many supplies have become tighter. All indications are pointing towards a continuation of this trend and greater volatility is expected over the next decade. This trend has severe ramifications for commercial budgeting and developing risk management strategies will be vital for the protection of bottom line profits in the years ahead.
4 Point Risk Management System ensures optimum price vs exposure for each client:
- Determine risk tolerance of the client
- Determine proper hedge program to meet the client’s level of risk tolerance
- Assess risk exposure within the market cycle (future prediction)
- Continued monitoring of changes in risk exposure
Volatile energy markets and uncertain economic conditions are not going away any time soon. Be prepared with responsible risk management.
The analysis of tariffs in deregulated markets is a very important component for determining the proper Risk Management strategy for our clients. Although in deregulated states the purchase of electricity is done by negotiating with independent suppliers, there is a great variance in how this is accomplished from state to state.
Part of our role is to explain the tariff structure pertaining to our client’s accounts so they fully understand their risk exposure with their utility.
The following are some of the factors affecting a business’ risk exposure based on tariff rates.
- Determining Tariff Rate Schedule, i.e. monthly, quarterly, semi-annually or annually
- Determining Competitiveness of Tariff Rate vs. Independent Suppliers rates
- Determining potential Future Changes in Tariff Structure
- Preparing Cost/Benefit Analysis of Switching from Tariff Rate to an Independent Supplier Rate
The process of purchasing energy is complex and varies greatly within utilities. Our consultants utilize our relationships with top tier Electricity and Natural Gas suppliers to obtain competitive pricing for our clients. Many of our clients do not have the experience or time available to manage a competitive bid process.
Part of the services CES offers is to manage the procurement process for our clients, which includes the following:
- Preparation of Data for Bids
- Submission to Competitive Suppliers
- Review of Bids
- Cost/Benefit Analysis
- Contract Analysis
- Monitoring Proper Account Execution
- Follow Up to Verify Proper Execution of Procurement Contract.
As consultants one of the most important services we provide is the ongoing analysis of changes in the energy markets that may affect pricing in the future.
Our energy experts utilize our stellar training and experience to identity buying opportunities for our clients.
We are constantly on top of and in tune with timely information pertinent to developing and maintaining your energy strategy.