Reduced working hours and shutdown production lines mean that producing companies in particular are reducing their energy consumption considerably. This leads to both decreased revenue for utilities companies, as well as decreasing prices on the utilities marketplace. Positions or quantities that were already purchased (at higher prices) may now even have to be sold at a loss. To deal with this, the msg advisors team recommends different measures, including the following:

• Create scenario calculations that simulate the potential financial impact of sinking sales volumes on the procurement portfolio (loss and liquidity risks from open positions)
• Continue developing business strategies that integrate extraordinary macroeconomic situations into the long-term management planning
• Optimize energy trading risk management, perhaps through improved risk management or auditing and expand or modify KPI sets, if necessary
• In addition, management approaches for extraordinary factors should be developed and the aforementioned points closely integrated with the liquidity planning and management.

Decreased electricity prices have made companies question the revenue and business plans of existing and planned production facilities. As a result, utilities companies are faced not only with a need to reevaluate plans for new facilities, but also using so-called “cross-commodity optimization” to ensure existing production facilities are being used in the smartest way possible. In this case, the msg advisors team recommends different measures, including the following:

• Develop an entry strategy for the “Power Purchase Agreement” (PPA) field of business that uses the current market situation (increasing economic and investment risk for facility operators and investors) to acquire PPA contracts
• Reduce costs by digitalizing processes (including, for example, workforce management, smart maintenance, predictive analytics).

The legal right to refuse service to consumers and micro-businesses (until 06/30/2020) could lead to liquidity shortages. Utilities companies should modify their customer value calculations accordingly, so that corresponding safeguards can be incorporated into credit checks. Based on msg advisors’ experience, the following are a few of the aspects that are important here:

• Determine how to enter into special contracts when it comes to new customers
• For existing customers, check whether a short-term inability to pay should result in a contract adjustment (duration, price, collateral) instead of a termination of the contract
• Perform customer value analyses and professionalize your risk management, including derivation of concrete actions, in order to turn risks into opportunities
• Improve product management and sales portfolio management
• Evaluate and select modern technological tools, such as online portals, chat bots, RPS (Robotic Process Automation) and AI, then introduce them within the organization.

As customers begin having trouble making payments, the need for information and communication from service departments rapidly grows. In this case, chat bots can help lighten peak loads, such as by processing simple, basic questions for which personal contact is not necessary. In addition, self-service portals with a validated billing adjustment function can also help reduce call volumes and late notices. Furthermore, the msg advisors team also recommends the following measures:

• Perform customer value analyses and professionalize your risk management, including derivation of concrete actions, in order to turn risks into opportunities
• Improve product management and sales portfolio management
• Evaluate and select additional modern technological tools, such as RPS (Robotic Process Automation) and AI, then introduce them within the organization.

If a larger number of customers start experiencing cash shortages, the number of late notices and receivables could rise significantly. To optimally prepare for such a scenario, msg advisors recommends utilities companies in particular do the following:

• Perform analyses early on to determine where late notices/collections processes could be avoided in the context of the crisis
• Then, based on that analysis, contact customers with suitable offers to help in order to secure a long-term customer relationship
• Improve product management and sales portfolio management
• Evaluate and select modern technological tools, such as online portals, chat bots, RPS (Robotic Process Automation) and AI, then introduce them within the organization.