Finance & Ratemaking
Energy Risk Management and Prudence Review

We are an industry leader in energy risk management and the prudence of natural gas and power procurement, including the use of risk management tools. Our experts have in-depth knowledge of commodity market dynamics and modeling techniques for electricity and natural gas in the U.S. and abroad. We have undertaken risk management engagements for electric and gas utilities worldwide as well as trade and industry associations, such as the Edison Electric Institute (EEI) and the Electric Power Research Institute (EPRI).

In connection with prudence reviews, we have provided expert testimony for electric and natural gas utilities regarding the typical and best practices for fuel and power supply procurement strategies, as well as methods for measuring the risk reduction impacts and prudence of the selected versus alternative hedging strategies. These studies typically include consideration of the merits of alternative hedging horizons, use of different risk metrics, and advantages of joint versus separate hedging of natural gas and power. We have also worked with stakeholders to determine appropriate procurement and performance evaluation processes going forward, including leading workshops for multiple stakeholders to understand and debate the risk management tradeoffs between possible procurement strategies.