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Hydropower Flows Here
Grid Mod: New energy trading and risk management system goes live
1/31/2020 12:00 AM
Photo by Rob M., The Dalles District
How do BPA’s marketers sell surplus power? The short answer is: based on analysis completed by a team of staff throughout multiple organizations, from trading and scheduling all the way to the finance and risk groups. This complicated process involves contract administration, risk assessments, credit analysis and accounting from start to finish, and was being done in a piecemeal fashion by individual organizations using an outdated system with reliance on spreadsheets and even faxes.
The new Energy Trading and Risk Management system went live in January which streamlines the multi-organizational process, helps reduce manual processes through task automation – it now sends emails automatically – and offers flexible reporting options which comply with BPA and California Independent System Operator contract requirements. The new system allows for real-time, within-hour power trades captured at five-minute intervals, which ultimately readies BPA for joining the Western Energy Imbalance Market if the decision is made to do so in spring of 2022.
“Truthfully, this project started off a little rocky as the diverse set of stakeholders from Power, Risk, and Finance had different views on the best solution,” said Suzanne Cooper, vice president of Power Services’ bulk marketing. “I am incredibly impressed with how these teams came together, worked through differences, and collaboratively implemented this new system that meets each group’s business requirements and provides additional functionality.”
ETRM enhances BPA’s ability to conduct real-time monitoring of its credit risk exposures while seamlessly providing data to downstream users. The new system will support the Bulk Marketing, Transacting, Credit Risk, Contract Administration, Settlements and Technical Accounting groups.
“There have been many successes on the ETRM project – delivery of additional functionality, tighter integration between trading, scheduling, and mid/back office workflows, and business process improvement,” said David Dernovsek, who works in Power’s Trading Floor group and served as the product owner on the project. “I am impressed by and thankful for our team, including business experts, sponsors, and our information technology partners, for their vision and dedication to operational excellence.”
The system consolidates and replaces an older one that was outdated and no longer supported by the vendor. The project was initiated by staff to improve existing processes by
tightening integrations between trading, scheduling, and internal office workflows,
and to more effectively engage in new energy markets. The new system was developed by gathering critical feedback and input from end-users. ETRM is highly adaptable and can be configured by users to meet BPA’s changing energy marketing and reporting needs well into the future.
“ETRM is a valuable enterprise solution, providing a relatively seamless platform to support the power transaction lifecycle, including producing portfolio visibility and valuation, credit exposure analysis and limits monitoring, derivatives accounting reporting and contract administration,” said Vice President of Compliance, Audit and Risk Management Tom McDonald. “The front, middle and back office ETRM team has done an excellent job of coming together to work towards a successful implementation.”
“The ETRM project successfully meets Power, Risk and Finance requirements and provides new functionality that eliminates legacy systems and workflows,” said Joel Cook, senior vice president of Power Services. “It exemplifies the agency goal of buying off-the-shelf products with little to no customization outside the core product to simplify and streamline information technology infrastructure and meet evolving agency business needs.”
“The project team exemplified the Come Together and Consider It Done leadership behaviors in their willingness to actively revisit business processes and work to support the best outcome for the entire agency,” said Michelle Manary, executive vice president and chief financial officer.
ETRM is one of several grid modernization projects which support the implementation of BPA’s strategic goals to modernize federal power and transmission system operations and supporting technology, and to provide competitive power products and services. To learn more about the portfolio of projects or to see all that’s happening with BPA’s grid modernization, check out
The project includes several components designed to both integrate and streamline BPA’s internal systems and data-sharing for energy trading as well as managing credit risk. These components are:
Trade management – monitors all workflows and procedures involved with the lifecycle of each energy trade deal, streamlining the entire process.
Portfolio management – integrates BPA’s systems and shares data across workgroups, allowing analysis of the probabilities of energy surpluses/deficits on the Federal Columbia River Power System to create various scenarios to help inform trade activity.
Operational, compliance and administrative activities – provides regulatory reporting and automates administrative tasks associated with energy trade deals.
Credit risk management – conducts real-time monitoring of credit risk exposures to better inform analysis of energy trades.
Accounting and analytics – documents all energy trades and their accounting.
Settlements – efficiently conducts monthly settlements required under bilateral contracts with the
Western Systems Power Pool
, of which BPA is a member, and for transfer services in the Western EIM.
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