Retail business restructuring and deregulation analysis for a major utility company

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  • Risk Management

In the normal course of business in the deregulated environment, the retail electricity component of the utility undertakes transactions that expose the value of its overall assets and liabilities to the basic cyclicality of the economy.

Regular economic cycles result in fluctuations in electricity demand, price elasticity, and inflationary pressures on costs and cash flows. Cyclical changes in input fuel market conditions, and cyclical changes in the labor and raw material markets are also risk factors The utility required understanding of different processes in their retail electricity business process.

For this project, Prescio was approached to develop a detailed flow map of the business process, systems and data flow, and identify all the market risks involved in retail pricing of electricity. We worked with a major utility company in the United States to completely chart the business and identify all market risks. Prescio completed the project ahead of schedule and met the quality work expectations for the client.