Abstract
This Energy Insights' Perspective examines the highlights of the North American
EnergyRisk conference, the implications for information technology, and the
intriguing IT offerings represented at the conference. Three major themes
dominated the conference - high energy prices, hedging strategies, and
hurricanes. The conference presented an interesting mix between market
overviews and quantitative modeling. One mosre issue that surfaced was the
insecurity of coal delivery. The rail system is under capacity, especially in
the Powder River Basin, which poses a delivery risk to generators depending on
coal-fired plants when gas-fired generation is expensive. Francis Mulvey, vice
chair of the surface transportation board, presented an overview of the status
of rate cases and acknowledged the inadequacy of investment in rail
infrastructure. Major observations from the conference are:
- Prices are not expected to decline; however, hedge fund influence is limited.
- Hurricanes engender new ways of managing risk.
- Years after the Enron collapse, credit risk is still an issue.
- Generation optimization requires more than one approach.
- Third-party providers replace self-built on-ramps to exchanges.
- It's not just spin - new application features and functionality predominate.
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