The extreme complexity of energy organizations, markets, transactions, contracts, and accounting rules generate special challenges in complying with Sarbanes-Oxley 404, FASB 133, FASB 157 and IAS 39. Private companies face similar challenges ensuring accurate internal audits and proper governance. The overarching issue is embedding compliance into business processes throughout the organization — and doing so quickly and cost effectively. Allegro’s comprehensive compliance solutions integrate all energy business processes into one platform. The need for off-system spreadsheets and storage is eliminated. Every document, message and user action is tracked and archived. All compliance activity is tightly integrated with business processes and operations across the enterprise.
- Emissions and Renewable Compliance – Increasing and tightening requirements for emissions and renewable compliance are placing tremendous pressure on energy companies of all sizes. While some companies are choosing to incorporate “cleaner” fuels into their portfolios, many must do so to avoid significant fines and penalties. From trade capture to physical inventory management, to valuation and compliance reporting, Allegro solutions manage the entire processes for both emissions and renewables.
- Compliance for Commodity Trading and Hedging - Allegro’s hedge accounting and reporting capabilities further enable compliance with support for FASB 133, FASB 157, IAS 39, FAS 159, FAS 161 and many other global regulatory standards. Key areas include Financial Instrument Management, Currency Management, Interest Rate Management, Fair Value Management, Fair Value Option Management and Disclosure Management. Providing robust and advanced analytical tools for analysis and reporting, it provides the control, accuracy, timeliness, and security that senior management requires to certify financial reports with confidence.
- Automated Corporate Compliance - In addition to regulatory compliance, companies also must exercise precise control over operations-level decision makers such as traders. Too much control stifles initiative, erodes efficiency and results in missed opportunities. Too little control invites serious financial consequences. Maintaining the right balance is crucial. Allegro helps companies perfect the balance between operational freedom and control at every level, from corporate policy to approvals workflow to limits on types and sizes of deals, down to individual traders. Managers can delineate operational boundaries while defining levels of flexibility granted to each team and individual in different situations. Allegro solutions support the COSO Framework defining business process controls and management accountability for comprehensive Sarbanes-Oxley compliance. Allegro’s solution for transaction accounting, operational control and regulatory compliance, including hedge effectiveness, can stand alone or readily integrate with existing or Allegro-provided accounts receivable, accounts payable and general ledger applications.
- FERC Regulatory Reporting - Due to the current economic state and tightening requirements for increased transparency in energy markets, new regulatory requirements are frequently being added by the Federal Energy Regulatory Commission (FERC) for the transmission and sale of natural gas, electricity and oil. These new reporting requirements have resulted in the need for an integrated and simplified way of meeting escalating FERC requirements in an automated, timely manner. Allegro automates the extraction and compilation of all transactional natural gas and electricity data needed to meet current FERC Form No.552 and FERC Electric Quarterly Report (EQR) regulatory reporting requirements, greatly simplifying the steps necessary to be fully compliant with FERC regulations.
Regulatory Compliance Components to Enhance ETRM Solutions
- Contracts - Captures and manages all contract information across the enterprise and through the entire contract management life-cycle.
- Hedge - Assists with hedge accounting and fair value disclosure requirements by providing robust tools for analysis and reporting such as Financial Instrument Management, Currency Management, Interest Rate Management, Fair Value Management, Fair Value Option Management and Disclosure Management.
- Revenue - Allows for revenue receipts to be allocated and ultimately distributed to interest owners, prepares revenue disbursements and supports regulatory reporting.
- Emissions - A dedicated component providing efficient, and manageable yet comprehensive capability to accommodate trade activity for either renewable energy credits or emissions certificates. This functionality is unique to the market, in that it not only supports current market conditions but allows customers to be ahead of the curve as mandates by various global requirements change.
- FERC Connect - Assists in the ease of extracting and compiling all transactional natural gas and electricity data need to meet current FERC 552 and FERC EQR regulatory reporting requirements. Upon validation, the information can automatically be filled and uploaded to FERC in an accurate and timely manner.