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Strategy Strengthened: Restructuring a Power Trader’s Operations Post-Acquisition

With a number of power generators in its portfolio, a private equity firm operated a regional power trading firm to manage the generators and hedge fuel costs and proceeds from the generators’ power sales. After the acquisition and sale of several generators, the trading firm’s operations were left fragmented and disorganized across two locations. The private equity firm wanted to improve efficiency and profitability of the trading firm and identify means of consolidating its operations. FTI Consulting was retained to provide expert advice and help improvements.

Our Impact

The client received a clear, actionable roadmap for improving trading efficiency and expanding capabilities, tailored to its organizational needs and timeline.
New trading strategies and products were identified that strengthened the client’s hedge performance and optimized capital usage, with clear guidance on associated risks and benefits.
Leadership and ownership aligned around the recommendations and began implementing the multiyear transformation plan to enhance performance and profitability.

Our Role

FTI Consulting assessed the hedging strategy and process under normal and extreme market scenarios, the range of physical and financial products permitted for trading, and the split of OTC and exchange-traded derivatives.
We reviewed and evaluated the client’s trading operations, including its energy trading and risk management (“ETRM”) system, and assessed any technology fragmentation.
Our experts produced a detailed report outlining key recommendations, including an expansion into new trading products to improve capital usage and hedge effectiveness, expanded risk modeling and development of an integrated front-to-back trading and risk system, and a reorganization plan for more efficient oversight of the trading team.