What it does:
WeatherWise USA, Inc.® offers quantification of inherent risks, consultation on methods of trading and
securitization, market valuations of weather instruments and advanced financial analysis and simulation.
We assist our clients in the mitigation of volumetric and price risk through advisory services relating to hedging
structure, hedge positions and the value of hedge instruments at market prices.
Who can use it:
Utilities and energy marketers concerned with earnings volatility or those that offer energy risk intensive,
advanced consumer products such as fixed or capped unit priced products.
Large volume energy consumers, governmental agencies, and other businesses with weather risk wishing to stabilize
their energy expenditures
Speculators, traders, market makers and investors who purchase, trade or sell weather risk and commodity financial
instruments or physical contracts in energy.
Description:
WeatherProof® Financial Risk Management Services offer detailed work in the financial aspects of risk caused by volatility
of weather and price. Our experts can provide detailed analysis of weather and pricing risk including determination of
appropriate hedging structures and risk underwriting. Our clients may utilize WeatherWise analytics to manage plant
outage, weather related supply, locational pricing, and other risks inherent in fixed unit pricing and other advanced
consumer products such as fixed, capped and budget energy bills.
Depending on your needs, our experts will assist you in the identification of the drivers of weather risk and in
developing mitigation strategies. We have deep experience in a wide array of risk mitigation methods including
structuring securitizations, market sales, internal self hedges, and purchasing hedging instruments. In circumstances
where the weather risk is financially beneficial to others in the market, WeatherWise can assist your organization in
the development of securitization structures and profitable weather trading strategies.
An assessment of individual weather instruments may be performed on a stand-alone basis to confirm fair pricing. The
individual instrument can be examined with inherent business risk to examine the hedging value of each instrument. We
can also review the performance of entire portfolios of weather instruments and inherent business risks. In instances
regarding large volume energy consumers that may experience very different weather risk at multiple sites, such as large
chain store operations and multi-state agricultural entities, this financial analysis may be beneficial in quantifying
total risk and testing the effectiveness of financial instruments. Portfolios of weather instruments may be evaluated for
traders and speculators.
Custom simulations can be constructed using any degree of granularity required (for example in a grid connected utility,
regions, system, plant, consumer, etc. may be detailed.) to evaluate hedging strategies, payout distributions, value at
risk, and expected values.
WeatherWise specializes in:
Custom software simulations and analytic computer programming with rapid turnaround; and details specific to weather risk.
WeatherWise has been fashioning ISDA instruments, trading, marking to market and other value based services surrounding
weather risk since 1996.
