Companies continue to be exposed to significant energy and electricity related price risk, and this risk needs to be properly quantified. Statistical analysis is frequently misapplied and many companies find that "a little bit of knowledge is a dangerous thing."

This comprehensive one-day program is designed to provide a solid understanding of key statistical and analytic tools used in the energy and electric power markets. Be armed with the tools and methods needed to properly analyze and measure data to reduce risk and increase earnings for your organization. View Past Seminar Attendees

Learn These 3 Keys to Success:

1.   Correlation & regression analysis; real option analysis; the Black-Scholes option pricing model; binomial trees; GARCH Models; the measurement of energy price risk; and how to use correlation and regression analysis for maintaining a competitive edge.
 
2.   How to minimize price risk through operational design Flexibility; measure forward price volatility and adapt Value-at-Risk concepts (VaR) for the Energy Industry.

3. Use actual case studies to examine 1) how Monte Carlo simulation is used to value Demand Response programs; 2) benchmarking techniques used for estimating the incremental cost savings of expanding existing operations; and 3) real-option value of generation assets.

Seminar Agenda

1.The Basics of Deterministic vs. Probabilistic Thinking in Deregulated Markets

a. Means vs. Standard Deviations

b. Distribution Shapes

c. Confidence Intervals

d. Probability

e.Simulation

Application: Monte Carlo Simulation

Example—Customer Migration Model Estimating Migration out of Standard Offer Service in a Deregulated Retail Electricity Market

2. Correlation and Regression Analysis for Maintaining the Competitive Edge

a. Univariate and Multivariate Analysis

b. Hypotheses Testing

c. Testing for Equal Means and Variances

d. Control Charts

Application: Benchmarking to Industry Standards

Example 1—Comparing O&M Expenditure to that of Peer Facilities

Example 2— Estimating the "Economies of Scale" (marginal cost reduction) Associated with Multiple Unit Generation Facilities

3. Time Series Step-by-Step

a. Time Plots

b. Adjusting for Stationarity

i. Logarithmic Transformation

ii. Differencing

c. Correlation and Partial Correlation Functions

d. Model Specification and Selection

e. ARMA Models

i. AR()

ii. MA()

iii. ARMA()

f. Estimated Parameters and Standard Errors

g. Testing for White Noise

i. Heteroskedasticity

ii. Autocorrelation

h. Forecasting Future Values

i. Additional Seasonality Considerations

4. Introduction to Real Options Analysis

a. Details of Option Model Implementation

b. Black-Scholes, Binomial Trees, and GARCH Models

Application: Real Option Valuation

Example of Valuing The Option of Real-Time Forward Load Reduction

c. Estimating Volatility and Uncertainty In Historical Prices

d. Measuring Forward Volatility

e. Adapting Value-at-Risk (VaR) for the Energy Industry

Application: Minimizing Price Risk through Operational Design Flexibility

Example of Valuing the Option of Installing Duel Fuel Capability

Application Principles of Risk Management

Example Calculation of VaR for a Multi Asset Portfolio and Extensions

Your Instructor

Kenneth Skinner, Ph.D. – Dr. Skinner is Vice President and Chief Operating Officer of Integral Analytics, a retail energy consulting and software development firm focusing on valuation of Demand-Side Management (DSM) programs, customer targeting for marketing and engineering applications, spatial load forecasting and feeder load-at-risk analysis, and traditional market research.  Dr. Skinner has 15 years of energy industry experience including 5 years as a Derivative Structuring Manager for Sempra Energy Solutions, a national energy supplier, focused on developing retail commodity supply strategies including portfolio risk management, hedging strategy, and least-cost supply opportunities.

Having worked with several energy consulting companies including Summit Blue Consulting, RDI Consulting and PHB Hagler Bailly, Dr. Skinner has significant experience in economic analysis and modeling of energy demand, forward energy prices, financial derivatives, transmission and pipeline capacity, natural gas storage, and generation assets using econometric time-series and cross-sectional analysis, statistical methods, optimization principles, real option valuation techniques; Structured valuation of distributed generation and electricity and natural gas commodity transactions, including demand response; Financial risk assessment and valuation of energy hedging strategies and market potential of new business ventures. He is fully trained in econometric methods, engineering principles, organizational development, optimization, and valuation techniques and has extensive experience with various software packages including Visual Basic, C++, SAS, SPSS, Crystal Ball, Matlab, GAMS, IREMM and ProSym.

Who Should Attend this Seminar?

Electric utilities, generators, marketers and industrials; corporate planners, economists, rate making staff, energy and electric power executives; government regulators; traders & trading support staff; marketing, sales, purchasing & risk management personnel; accountants & auditors; plant operators, and engineers.

Prerequisites

This fundamental-to-advanced level group live seminar has no prerequisites. No advance preparation is required before the seminar.

Why Choose PGS?

Since 1996, PGS seminars have been known for their clear explanations and in-depth content. Register for a PGS program today, and team up with the leader in electric power and energy education. Over 3,000 energy and financial professionals have already attended PGS's proven courses. View Past Seminar Attendees

Prices

Please call 412-521-4737 for pricing information.

CPE Credits

This group live seminar is eligible for 8.0 CPE credits. Be aware that state boards of accountancy have final authority on the acceptance of individual courses for CPE credit. As of January 1, 2002, sponsored learning activities are measured by program length, with one 50-minute period equal to one CPE credit. One-half CPE credit increments (equal to 25 minutes) are permitted after the first credit has been earned in a given learning activity. You may want to verify that the state board from which your participants will be receiving credit accept one-half credits.

PGS  Energy Training is registered with the National Association of State Boards of Accountancy (NASBA)  as a sponsor of continuing professional education  on the National Registry of CPE Sponsors. State boards of accountancy have final authority on  the acceptance of individual courses for CPE  credit. Complaints regarding registered sponsors  may be addressed to the National Registry of  CPE Sponsors, 150 Fourth Avenue North, Suite 700, Nashville, TN, 37219-2417. Web site: www.nasba.org. CPAs interested in attending any seminars  should contact our offices for details on CPE credits granted and any prerequisite requirements.