A power marketing services business needed a solution that would allow them to handle several books for different customers while also maintaining the ability to aggregate all their risks and exposures for corporate functions including treasury and the CRO. As a large shop in the physical and financial power sectors, the company needed the ability to value swaps, options, structured transactions, transmission, financial fuel hedges, and in some cases physical fuel. It was important for the business to be able to view portfolios from a perspective of their customers, by asset, by commodity, and from the perspective of their corporate management. Assets under management were fired by both coal and natural gas, requiring a risk management solution that could accommodate complex physical and financial commodities. Core requirements for a risk management solution required transparency across the entire business, process efficiencies across front, middle, and back office – and auditable data, compliant with government regulations.
The power marketing shop hired a consultant with extensive experience in energy trading risk management (ETRM) solutions to identify a proven ETRM solution that matched their needs. A global review of ETRM providers showed that Allegro matched the customer’s core needs while providing additional value with trader tools, real-time analytics, and exchange integration. Allegro was implemented across all commodity and asset portfolios delivering an enterprise-wide solution for use by traders, risk managers, schedulers, accounting, settlement, and corporate executives. In addition to making the marketing shop more transparent and confident in its decision making, the customer benefited from higher than expected levels of cost savings as redundant processes were eliminated, silos of spreadsheets were consolidated into one platform, and back office functions became more automated.