Solution: Prenova’s Risk Management offering assists customers in designing and implementing strategies that are custom-fit to corporate risk management compliance requirements. Our key deliverable is a single, comprehensive, and consistent framework for evaluating all procurement decisions. Our approach incorporates the continuous, real-time capture, analysis and management of the stream of data from transaction systems and related processes up to corporate decision-making levels for appropriate actioning under the auspices of risk mitigation. This allows our customers to maximize opportunity and minimize loss as Prenova delivers actionable information on which to base procurement decisions.

Prenova is able to synthesize information about NYMEX-based futures prices, spot-market purchases, and fixed price contracts to provide forward market pricing discovery for our customers.  We’ll make procurement recommendations in light of this forward market pricing that combines to provide both price reductions and limited risk exposure.

Many customers today are considering adding some degree of financial hedging to their overall procurement strategy given that fewer vendors are offering fixed price contracts due to market volatility.  A financial hedge can be a viable alternative as it  helps customers maintain price discovery between suppliers as they compete for the company’s business via Prenova’s procurement process.  Prenova offers hedging strategies that integrate fixed price, basis, and swing exposure mitigation, and products generally include swaps, caps and/or collars as bounded by a customer’s risk tolerance.   Hedging services include:

• Review and assist in establishing a corporate hedging risk policy (if none exists)
• Design risk management program
• Meet and negotiate with suppliers
• Implement hedge strategy
• Develop and implement mark to market
• Monitor and adjust hedge strategy in light of market conditions and business operating requirements

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Outcome: Our experienced team of Price Risk Management professionals has the expertise to design and implement a reliable evaluation framework for procurement opportunities that maximizes a customer’s portfolio value against the setting of a volatile energy market environment. We work closely with our customers to develop a customized, proactive risk management program as part of their energy management strategy that diminishes price risk and lowers the impact of energy spend on operating costs per square foot.