Why Energy and Utilities Companies Need Risk Management Now More Than Ever

The energy and utilities sector are one of the most vital and complex industries in the world, providing essential services to millions of customers and supporting economic growth and development. However, this sector also faces a multitude of risks that can threaten its operations, reputation, and profitability. To survive and thrive in this challenging and uncertain environment, energy and utilities companies need to implement effective risk management practices that can help them identify, assess, and mitigate these risks, as well as seize the opportunities that arise from them.

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Risk management is not only a defensive measure, but also a strategic imperative for energy and utilities companies. By managing their risks proactively and holistically, these companies can improve their performance, resilience, and sustainability, as well as create value for their stakeholders. Risk management can also help them avoid or reduce the negative consequences of failing to comply with the laws and regulations that govern their industry, such as fines, penalties, lawsuits, or reputational damage.

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In recent years, several energy and utilities companies have faced hefty fines from regulators for various violations, such as:

• In 2020, the UK Environment Agency fined more than 30 companies a total of ￡27 million for breaches of the European Union Emissions Trading System, CRC Energy Efficiency Scheme, Energy Savings Opportunity Scheme and Fluorinated Greenhouse Gas regime.
• In 2019, the UK energy regulator Ofgem fined SSE ￡700,000 for failing to meet its 2018 target to install gas smart meters for customers.
• In 2018, the US Federal Energy Regulatory Commission fined ETRACOM LLC and its founding member $1.9 million for manipulating the California electricity market in 2011.
• In 2017, the US Environmental Protection Agency fined ExxonMobil $2.5 million for violating the Clean Air Act at eight of its chemical plants in Texas and Louisiana.

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These examples show the importance of complying with the rules and standards that apply to the energy and utilities sector, as well as the potential costs and risks of non-compliance. Energy and utilities companies need to have a robust and comprehensive risk management framework that can help them monitor and manage their compliance obligations, as well as anticipate and respond to the changing and evolving regulatory landscape.

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?RiskWatch: Empowering Energy and Utilities Companies

Real-world success stories demonstrate RiskWatch’s impact. Major utility players, reduced risks by 30%?using RiskWatch’s platform and had substantial savings from the manual assessments.

RiskWatch used by some leading companies such as First Energy, Avangrid and HECO to:

• Leverage industry-specific regulatory checklists to conduct pre-assessment reviews of compliance and security postures remotely. This strategy enables the early identification of potential compliance gaps and security vulnerabilities, facilitating a more focused and efficient on-site assessment process. By adopting this approach, it's possible to streamline the overall assessment duration, achieving time savings of up to 2 hours or 30%.?
• Utilizing area-specific threat ratings provided by crime data partners, which evaluates the potential risk level of a location, combined with a risk register that applies Asset, Threat, and Vulnerability metrics, enhances our ability to efficiently pinpoint security gaps. This method allows for a rapid comparison against crime data and a detailed register of threat scenarios tailored to the site's specifics, reducing the time needed to identify or reassess risks by up to 2 hours or 20%.
• By applying tailored mitigation strategies derived from risk assessments (Corrective actions), we efficiently close security gaps, enhancing site resilience and reducing future risk exposure by utilizing RiskWatch’s built-in task management.
• Leverage advanced reporting capabilities by investing time once to create customizable report templates tailored to your specifications. These templates can be reused for generating site-specific reports, allowing the choice of different templates for each assessment. This streamlined process significantly reduces the effort and time previously required for report creation, offering a more efficient alternative to manual reporting methods.

In conclusion, energy and utilities companies cannot afford to ignore risk management. Whether it’s protecting against cyber threats or navigating regulatory changes, proactive risk management ensures a resilient and sustainable future. So, embrace RiskWatch and safeguard your company’s success.