The lack of flexibility in operations at PPC, the Public Power Corporation, which has been the cause of serious problems in the past, the most acute concern being increased operational costs, stands as one of the matters that the utility’s current administration will need to solve.
Unlike private-sector companies whose operations tend to be far more flexible, allowing them to maneuver and overcome various risks, public utilities such as PPC are typically more rigidly structured.
Even so, the early stages of an organized effort aiming to restructure PPC so that it can overcome market risks more effectively seems to be underway.
At present, PPC is believed to be seeking professional consulting advice for the preparation of a detailed study concerning the establishment of a risk management system covering the utility’s energy-sector activities.
Factors to be taken into account in the risk management system will include exchange rate fluctuations, crude oil price levels in the international market, energy trading, as well as liquidity dangers.
PPC’s fresh approach to risk management is considered absolutely necessary both amid current market conditions as well as in light of prospective changes that may come about as a result of the electricity market’s liberalization.
Other details of the study to be commissioned by PPC will include an in-depth examination into the various dangers the utility is exposed to, a model for the establishment of an appropriate administrative structure, development and configuration of market risk evaluation and management models, credit and liquidity risk management systems, as well as the development of computational tools and functional integration within the framework of the exisiting ETRM (Electricity Trading Risk Management) system.