Risk Management Tools and Techniques Help Power Markets Cope with Volatile Prices and
Unpredictable Weather 

                  

    BOULDER, Colo., Oct. 10 /PRNewswire/ -- It's been a brutal summer for the
power markets.  Dramatic fluctuations in energy prices and warmer-than-normal
summer temperatures have squeezed profits and put extraordinary strains on
systems nationwide.  With energy prices still in flux and winter just around
the corner, the pressure shows little sign of lessening.
    Some companies have survived this tough market in better shape than
others.  According to a new management report published by Financial Times
Energy (FT Energy), companies that adopt risk management tools and techniques
are better prepared to cope with market challenges.  "Power Market Risk
Management:  A Survival Guide" was specifically written for power market
players.  "Risk management programs can be a real benefit for power companies,
especially in these turbulent times" says author Shirley S. Savage, president
of The Thinking Companies, Inc.  "The key is establishing the framework for
the risk management program and making certain that there is proper
oversight."
    Risk management is the practice of identifying the risks that affect an
energy company's business and finding ways to offset them.  These risks might
include variable fuel costs, unusual weather, credit issues, and legal
concerns.  A good risk management program should incorporate procedures to
handle a variety of risks.  For instance, fuel costs could be managed by the
use of futures contracts or over-the-counter (OTC) derivatives.  Weather risk
can also be offset by OTC derivatives and futures contracts or by purchasing a
weather insurance policy.  Monitoring the credit ratings of counterparties can
help an energy company reduce its own credit risk, and standardized contracts
can mitigate the risk of legal problems.
    Any risk management program is a long-term undertaking.  Policies and
procedures need to be in place for several years if a company wishes to
capture the maximum benefit.  There must also be input from the highest levels
of management within the company -- that's the only way to create an effective
program that truly reflects a given company's culture and tolerance for risk.
    Written in plain English, "Power Market Risk Management:  A Survival
Guide," demystifies risk management concepts and procedures, explaining the
role that middle- to upper-level managers need to play in establishing a
successful program.  Using examples from the real world of utilities, the
guide shows how companies, such as Citizens Power and Peoples Energy, have
benefited from well-crafted risk management programs.  To order "Power Market
Risk Management:  A Survival Guide," please call FT Energy at 800-424-2908 or
720-548-5700.

    About FT Energy
    FT Energy is the world's most comprehensive provider of global energy
industry news, data, and information services.  FT Energy focuses on the
retail side of the energy business through our E SOURCE(TM) products,
providing unbiased, independent analysis of retail energy markets and
energy-related services and technologies, as well as consulting services.  On
the supply-side, we offer RDI's in-depth databases, syndicated studies,
consulting services, and analytical tools such as POWERdat, GASdat, and
POWERmap.
    The FT Energy family of products also includes such respected publications
as Megawatt Daily(R), Gas Daily(R), and Power in Europe, as well as industry
conferences such as PowerMart and Coal Marketing Days.  Our management
reports, covering topics ranging from electric transmission in the U.S. to
natural gas in Asia, offer executives the insight they need to succeed in
today's hypercompetitive marketplace.  Please visit us on the Web at
http://www.ftenergy.com.



SOURCE FT Energy
Web Site: http://www.ftenergy.com