Paragon Energy Risk Manager System (ERM) is a fully integrated trading, credit, and market risk management solution for complex, multi-commodity energy companies. ERM manages the entire risk management process throughout the transaction life cycle. This includes counterparty onboarding and scoring, trade limits, margining agreements, trade capture, scheduling, MtM, accounting, and credit analysis.
ERM provides a consistent approach to market and credit risk for compliance with credit and market exposure policies and limits. The system’s highly configurable reporting and workflow functionality is easily managed by business analysts. ERM is natively integrated with MCG Energy’s Integrated Asset Manager (IAM) for physical and financial trade capture.
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ERM combines state-of-the-art technology with a rich feature set to deliver the most powerful ETRM system available.
Paragon Energy Risk Software Details (PDF)
MCG Energy’s Hosted Data Services (HDS) merges data from ERM and all other MCG Energy software products into one hosted platform. HDS is a data warehousing solution for all MCG applications.
MCG Energy’s Paragon Energy Risk Software
ERM provides a comprehensive real-time picture of complex gas and power portfolios, risk metrics, and limits to ensure compliance with your organization’s risk policy. ERM enables traders and utility merchants to manage forward exposure with a rich set of reporting and risk metrics. These include custom reports and workflows that business analysts can use without programming knowledge or IT assistance.
Key Features Paragon Energy Risk Manager (ERM)
- Trade Capture – Integrated with MCG Energy’s optional Integrated Asset Manager (IAM) system for physical and financial trade capture. Examples include power, gas, crude oil, natural gas liquids (NGLs), renewables, and industry-standard derivatives including futures, options, swaps, swaptions, and confirmations for those transaction types. Includes trade capture for liquefied natural gas (LNG) and Intercontinental Exchange (ICE) gateway for trade uploads.
- Position Management – Strategic portfolio-wide position view down to hourly granularity at the delivery point. Combines physical and financial transaction details to provide a comprehensive position across all commodities. Position reporting and custom graphics for power and a variety of fuels.
- Profit & Loss – Intra-month and forward P&L. Explanation of day-to-day changes such as curve shift, new transactions, changed transactions, and Greeks for non-linear positions.
- Limit Management – Tenor, volumetric, and locational limits down to the meter by counterparty and trader with alerts/notifications.
- Operations / Scheduling – Uses best available volume with a variety of buckets such as trade volume, scheduled volume, and actual volume. Supports Park and Loan (PAL) storage trades.
- Statements / Invoices – Generates fees and aggregates them into invoices or statements with customizable format and layout. Interfaces with G/L software.
- Compliance – Ensures data integrity by controlling who can modify trades at each stage in the lifecycle. The system provides the end-user with the ability to track limits down to the trader and portfolio for the company.
Paragon ERM Risk Tools
- Market Risk – Provides tools for assessing market risk including Monte Carlo Value at Risk with backtesting (MC VaR), Historical Value at Risk (H VaR), historical (event-based) stress tests, and user-designed stress tests.
- Credit Risk – Measures credit exposure utilizing Credit VaR, Potential Future Collateral (PFC), Potential Future Exposure (PFE), walk forward (expected transactions going forward with no price change), expected/unexpected risk, stress testing, and What If transaction modelling for the impact of proposed trades on credit lines.