Serving the energy industry for over 30 years
By - Jon Brown

Energy Hedging Tools, Risk Management & Trading Strategies
Optimized for Power and Natural Gas
October 21-22, 2019 | Denver, CO

Download PDF
 

Overview

Utilities, retail electricity providers and financial traders — along with business, institutional and other high-volume energy end-users — that transact and trade in electricity and natural gas markets, appreciate the significant effects caused by price volatility in these sectors on their financial statements and reported earnings. 

To address and minimize their price risk exposure, these organizations typically invoke a variety of sophisticated hedging and derivatives measures.  Their finance and transactional staff must optimize financial positions and outcomes by adhering to these best practices:

  1. Understand the various hedging objectives that are possible
  2. Determine the specific objective(s) to achieve
  3. Identify the hedging and derivative tool(s) that will appropriately satisfy the goal(s)
  4. Know how, when and why to use each derivative tool

This course is designed for those who generate, market or procure large volumes of energy. It will confirm and enhance their knowledge of relevant hedging tools and risk management strategies applicable to power and natural gas positions and trading.  The content explains the various tools used to control the associated risks. It also details how these contracts work, how and when they should be used, and how they are priced. Case examples and problem-solving illustrations optimized for power and natural gas trading are used throughout the course to enhance the understanding of the material.

Learning Outcomes

  • Discuss the underlying and fundamental principles of energy risk management
  • Recognize how derivatives are priced, how they work, and how they’re traded
  • Differentiate between alternative derivative structures and related hedge objectives
  • Identify prospective outcomes associated with different hedging strategies
  • Examine the differences and interrelationship of physical and financial uncertainties
  • Review approaches to incorporate risk analysis into budgeting and risk management

Credits

AP_Logo

EUCI has been accredited as an Authorized Provider by the International Association for Continuing Education and Training (IACET).  In obtaining this accreditation, EUCI has demonstrated that it  complies with the ANSI/IACET Standard which is recognized internationally as a standard of good practice. As a result of their Authorized Provider status, EUCI is authorized to offer IACET CEUs for its programs that qualify under the ANSI/IACET Standard.

EUCI is authorized by IACET to offer 1.1 CEUs for this event.

 

Requirements for Successful Completion of Program

Participants must sign in/out each day and be in attendance for the entirety of the conference to be eligible for continuing education credit.

Instructional Methods

Case studies and PowerPoint presentations will be used in this program.

Agenda

Monday,  October 21, 2019

7:45 – 8:15 a.m. :: Registration and Continental Breakfast

8:15 – 8:30 a.m. :: Overview and Introductions

8:30 a.m. – 12:00 p.m. :: Program Instruction

(includes 15 minute mid-morning break)


Developing the Infrastructure

    • Evaluate risk tolerance
    • Structure a risk policy and procedure

Defining Risk Management

    • Hedging vs. speculation
    • Defining program objectives

Risk Management Tools

    • Overview of clearing exchange
    • Futures and options applications
    • Basis overview
    • Bi-Lateral transaction structure (swaps)

12:00 – 1:00 p.m. :: Group Luncheon

1:00 – 5:00 p.m. :: Program Instruction

(includes 15 minute mid-afternoon break)


Market & Pricing Alternatives

    • Index pricing
    • Fixed pricing
    • Cap pricing
    • Collar pricing

Market Analysis

    • Fundamental factors
    • Technical factors
    • Historical factors

Developing a Hedge Methodology

    • Mean reversion methodology
    • Value triggers
    • Time triggers
    • Catastrophic triggers
    • Putting it all together

Tuesday, October 22, 2019

7:45 – 8:15 a.m. :: Continental Breakfast


8:15 a.m. – 12:00 p.m. :: Risk Management & Hedging Strategies for Utilities and Energy Businesses 

(includes 15 minute mid-morning break)

  • Key Entities
    • Investor owned utility
    • Municipal utility
    • LSE/Power generator
    • Merchant/IPP power provider
    • Retail electricity providers (REPs) / energy service cos (ESCOs)
    • Financial traders
  • Risk Management Utilities & Energy Businesses
    • Industry best practices in hedge strategy development
      • Hedge horizons
      • Volumes
      • Analytical tools
    • Hedge strategy tracking
    • Benchmarking
  • Case Studies
    • Natural gas input cost hedge
      • Fixed
      • Cap
      •  Collar
    • Natural gas pre-payment financing pros/cons
    • Generation electricity short hedge
    • Purchase power electricity long hedge

12:00 p.m. :: Course Adjournment

Instructors

Dan Conrath, Senior Vice President, INTL FCStone Financial Inc., FCM Division

Dan Conrath is Senior Vice President at INTL FCStone Financial Inc., FCM Division. With more than a quarter century of experience in energy price risk management, he has led advisory projects for many of the largest utilities in the U.S. Mr. Conrath has significant practical experience in guiding utilities and energy-intensive companies on the best application of risk management methodologies for their respective cultures and risk tolerances.  He became a partner at Risk Management Inc, now part of INTL FCStone Financial Inc., FCM Division, in 1992.  He oversees the execution of approximately $16 billion (notional value) in energy contracts for INTL FCStone clients each year.  Mr. Conrath holds a BS from the University of Illinois (Urbana-Champaign).


Bridgette Hooper, Director – Energy Procurement, INTL FCStone Financial Inc., FCM Division

Bridgette Hooper is Director of Energy Procurement at INTL FCStone Financial Inc., FCM Division.  She has more than 15 years of experience in the energy trading industry, establishing her expertise in physical energy procurement.  Ms. Hooper works with retail natural gas and electricity suppliers across the United States to negotiate pricing and favorable contract terms and conditions on behalf of FCStone clients, resulting in millions of dollars of energy-spend savings. Earlier in her career, Ms. Hooper worked as a term speculative ERCOT trader at a 7,100 Megawatt utility in the Midwest.  She holds a BBA from Washburn University.

Location

EUCI Office Building Conference Center

4601 DTC Blvd, B-100

Denver CO, 80237

 

Nearby Hotels

Hyatt Regency Denver Tech Center
7800 E Tufts Ave
Denver, CO 80237
Phone: 303-779-1234
0.3 miles away

Hilton Garden Inn Denver Tech Center
7675 E Union Ave
Denver, CO 80237
Phone: 303-770-4200
0.6 miles away

Denver Marriott Tech Center
4900 S Syracuse St
Denver, CO 80237
Phone: 303-779-1100
0.7 miles away

Hyatt Place Denver Tech Center
8300 E. Crescent Parkway
Greenwood Village, CO 80111
Phone: 1-888-492-8847
0.9 miles away

Register

Event Standard RateAttendees

By clicking Accept or closing this message, you consent to our cookies on this device in accordance with our cookie policy unless you have disabled them. more information

By clicking Accept or closing this message, you consent to our cookies on this device in accordance with our cookie policy unless you have disabled them. You can change your cookie settings at any time but parts of our site will not function correctly without them. We use cookies during the registration process and to remember member settings.

Close