IN-PERSON CLASSROOM SEMINARS

• What is Enterprise Risk Management and its relationship to energy risk
• The components of enterprise risk management and why they are important
• Energy as a percent of Cost of Goods Sold and the impact to Corporate Earnings
• The difference between systematic and specific risk and what to do about them
• Fundamentals of CAPM and RAROC for capital energy investments
• How to develop a Strategic Risk Management Plan and why it's important
• Risk Framing: what it is and how it can be used to manage risk
• Risk Decision Matrix: How to identify, assess, control and monitor energy risk
• Fundamentals of hedging energy risk exposure
• Layered hedging strategies for volatile energy markets
• Using triggers and stop losses in dynamic hedging decisions
• Combining spot purchases, forward contracts and options to manage risk
• How to optimize supply portfolios using probability theory
• Using Demand Side Management options to manage price risk
• Combining Commodity Risk Reduction and Demand Side Management
• How to use statistical methods to measure energy risk
• Forward price simulation, how it's used and how to do it
• Using Monte Carlo methods to measure price and volumetric uncertainty
• How to measure expected energy budget probability distributions
• Risk Quantification (Tools) including VaR, TEVaR, CVaR, CFaR
• What is earnings at risk (EaR) and how it applies to energy risk
• How to calculate VaR, TEVaR, and EaR
• How to Stress Test and Back Test the VaR calculation

1. What You will Learn (Session #1 - 2.0 hours)
1. Sources of energy risk - Where is it?
2. What is Energy Risk Management and why its used
3. How is energy risk measured?
4. Enterprise Risk Management - what is it and why it used
5. Components of Enterprise Risk Management and there relationship to Energy Risk

1. The Internal Environment
2. Objective Setting
3. Event Identification
4. Risk Assessment
5. Risk Response
6. Control Activity
7. Information and Communication
8. Monitoring

6. What is Risk Appetite and how it relates to the risk management strategy
7. What is the Efficient Frontier?
8. Where is the best portfolio on the frontier?

Application:
Example - Identifying the risk facing an energy supplier

2. What You will Learn (Session #2 - 2.0 hours)
1. Developing a Strategic Risk Management Plan

1. Key elements of a Strategic Risk Management Plan
2. Components of a Risk Response Matrix
3. Systematic vs. Specific Risk
4. The decision to manage vs. accept risk exposure

2. Hedging Risk

1. Review of Hedging Strategies
2. Common Hedging Instruments - Futures, Forwards and Derivatives

Application:
A Hedging Primer: Examples of hedging energy price risk.
Application:
Combining energy price hedging with demand response opportunities: The net effect of commodity risk reduction and demand side management

3. Strategic Hedging Strategies

1. Portfolio diversification
2. Layered hedging strategy
3. Triggers and Stop Loss

Application:
Example - Setting-up a layered hedging strategy and comparing results for two different long-term sustainable price estimates

3. What You will Learn (Session #3 - 2.0 hours)
1. What is value-at-risk or VaR
2. Why value-at-risk is the risk measurement method of choice at most energy firms and what are the alternative approaches.
3. The assumptions we need to know before using value-at-risk.
4. What are TVaR, and Earnings-at-Risk (EaR) and why they are needed?
5. The relationship between earnings-at-risk and the enterprise wide risk management strategy
6. How energy price uncertainty impacts earnings-at-risk
7. What the three different VaR calculation methodologies are and how they compare.
8. Caveats and cautions when using VaR.
9. How to calculate VaR and EaR using a simple example (no advance math!)

4. What You will Learn (Session #4 - 2.0 hours)
1. Portfolios and volatility - getting the units right
2. The two approaches to calculating VaR - historical simulation and model-building - advantages and disadvantages
3. How to Stress Test and Back Test the VaR calculation
4. Reporting change in Daily VaR, change in 5-Day VaR Moving Average, and change in the Stress Test extreme value over a historic time horizon

Application:
Example - Calculating the settlement VaR from a real-time obligation to serve electricity (valuing load and demand serving contracts). The pros and cons of simulation vs. closed-form solutions.

Kenneth Skinner, Ph. D. -- Vice President Integral Analytics Inc.
Dr. Skinner is a Vice President for Integral Analytics Inc. (IA), an energy conservation focused analytical planning software and consulting firm. IA is fully owned by Willdan, an industry-leading energy solutions provider and sustainability consultant. Dr. Skinner supports core energy risk management and sustainability services including electric grid optimization, integrated resource planning, design and implementation of integrated demand side projects and distributed energy resources. He is part of a team specializing in energy engineering, renewable generation, electric vehicle fleets and infrastructure, program management, microgrids, financing, data analysis, software development, and other fields. Dr. Skinner has over 20 years of energy industry experience developing energy conservation and commodity supply strategies involving portfolio risk management, hedging strategies, and least-cost supply opportunities. Having worked as an energy consultant, Dr. Skinner has significant experience in economic analysis and modeling of distributed energy projects, forward energy prices, financial derivatives, and valuation of energy assets using econometric analysis, statistical methods, optimization principles, real option valuation techniques. Dr. Skinner is widely published having served as the technology columnist for Wiley Natural Gas and Electricity Journal. He is a noted speaker on energy related topics for organizations such as AESP, IAEE, ACEEE, PLMA, IEPEC, INFORMS, Infocast, EUCI, SNL Energy and PGS Energy Training.

This one-day seminar will be held at the hotel listed below or can be conducted on-site at your facilities. The seminar will start promptly each day at 8:00 AM and will finish at 4:00 PM. The program includes continental breakfast, lunch, and coffee/cookie breaks. Attendees also receive a professionally produced seminar manual that can serve as a valuable office reference. Dress is casual for all seminars.

COVID 19 Information: Please click here for the PGS Covid-19 policy. You can confirm each hotel's specific COVID 19 policy using the link(s) provided below.

The price for this comprehensive two-day seminar is $895 (USD).

Payment is due prior to the start of the seminar by Visa, Master Card, American Express, or corporate check. Seminar fees will be charged to your credit card at the time of registration unless other arrangements have been made. Please make checks payable to "PGS Energy Training" 26 Teal Lane • Hilton Head Island, SC 29926. Cancellations will result in a credit that is good for 2 years which can be transferred to a colleague. Substitutions may be made at any time. For more information on PGS policies regarding administrative matters and complaint resolution, please contact our offices at (843) 212-4038.

This live group seminar is eligible for 7.0 CPE credits. Be aware that state boards of accountancy have final authority on the acceptance of individual courses for CPE credit. As of January 1, 2002, sponsored learning activities are measured by program length, with one 50-minute period equal to one CPE credit. One-half CPE credit increments (equal to 25 minutes) are permitted after the first credit has been earned in a given learning activity. You may want to verify that the state board from which your participants will be receiving credit accept one-half credits.