Uncertainty and Risk

A utility business must understand the causes and nature of newly emerging uncertainties, and develop and adapt means for managing the associated risks. This text presents different aspects and methods for identifying and dealing with uncertainty and risk involved in evaluating potential resources

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Coping with uncertainty and managing risk have always been a part of the utility business. In today's environment, however, new uncertainties have become a part of the market and regulatory environment within which a utility must operate. Utilities must understand the causes and nature of the newly emerging uncertainties, and develop or adopt appropriate means for managing the associated risks. This special issue of the Energy Services Journal presents different aspects and methods for identifying and dealing with uncertainty and risk involved in evaluating potential resources.

Demand-side management's (DSM) role and value is changing as utility markets become more competitive and as public utility commissions respond to these changes. The pace of change is one of the most significant aspects of the transformation affecting the industry and its stakeholders. In order to better assess the effects of "mistaken" decisions, uncertainty must be explicitly bound while specific risks involved are estimated. The articles presented in this issue offer some of the tools required to develop a plan that mitigates and avoids the consequences of mistakes.