Energy Risk Management
For many energy companies, energy supply risks pose significant exposure for customers and owners. These risks can arise from commodity markets, delivery constraints, resource availability, load variability, environmental requirements, and counterparty exposure. Many organizations with older risk management programs now realize that changing markets, new regulation, emerging technology, and new resources have introduced new risks to manage.
Aether helps organizations upgrade and re-focus their Energy Risk Management area, examining operational and financial risks on power and gas supply costs. Aether assists organizations with developing hedging programs that are consistent with their risk tolerance and that focus on the most material risk elements in their portfolio. Hedging advisory services can include program review, hedging effectiveness analysis, market analysis, and quantitative modeling. Aether can provide decisional tools to enhance hedging effectiveness. Lastly, Aether can explain hedging program objectives and mitigation strategies to its clients’ stakeholders.
In addition to hedging analysis, Aether conducts audits and assesses organizations’ risk management infrastructure. Aether reviews internal risk management capabilities, looking for alignment across an organization’s risk appetite, risk tolerance, and risk objectives. Against these, risk management governance, policy, procedures, limits, systems and models, risk analytics, and risk metrics can be assessed for consistency. Aether also provides benchmarking information to help clients compare and contrast their risk management program to peers’ programs.
Enterprise Risk Management
Enterprise Risk Management (ERM) incorporates reputation risk, financial risk, regulatory and legal risks, environmental risks, operating risks, and strategic risks. A strong ERM program will integrate enterprise risk management with strategy, tactics, and operational processes. ERM programs are often difficult to implement because of the challenges in comparing a diverse set of risks. Additionally, there are organizational challenges to implementing an ERM program, such as resource limitations and lack of consensus over how to structure it.
Aether helps companies design ERM programs that fit their culture and are appropriate for the size and scale of their risks. Aether guides organizations as they define objectives for their program and decide how the risk analysis will be used. From there, Aether assists with implementing an ERM program, beginning with risk identification. Aether shows clients different approaches for gathering and mapping risk exposures. Aether helps develop risk reports that will work within the client's existing decisional framework. Aether focuses on implementing a sustatinable risk management process for its clients.
Aether shares approaches and techniques for depicting risk and opportunity, such as developing tools to compare, contrast, and rank risks. Aether can provide internal workshops to introduce methodology and tools. The workshops can also serve to roll-out an initial or revised ERM program. Finally, Aether helps clients integrate ERM into other operational elements to help enhance the organization’s strategic planning, capital and O&M budgeting, information technology planning, internal controls, compliance monitoring, and internal audit planning.