Aquila outsources risk management expertise

North American energy company Aquila is to start outsourcing energy trading and risk management services to third parties, following the creation of a new unit, Radius Group.

Based in Kansas City, Radius head Jennifer Fisher claims the division has not been set up to bring energy deals to Aquila's trading floor, but to help firms without their own energy data or risk management to fully manage their energy risk and avoid pitfalls like those faced by some firms in the California energy crisis.

"With the price of natural gas and power changing almost by the minute, it's impossible for anybody to manage their energy risks, unless they have a trading organisation that can provide real, live knowledge of the market and have the risk management capability to analyse complex interrelated risks," said Fisher.

Radius will also help firms to develop risk management strategies, and offers its services on a pan-US basis, although it claims it can also help firms formulate a worldwide solution.

"We believe that effective risk management requires a combination of skills and capabilities: finance, actuarial, legal, accounting, technology, properly designed organisation and control processes, experience and common sense," said Fisher.