Cash Flow-at-Risk and Financial Policy for Electricity Companies in the New World Order

01 December 2000
By Dr. Michael Tennican, et al.

A statistical tool developed by NERA economists for measuring energy companies' cash-flow-at-risk (c-far) shows that average cash flow volatility roughly doubled in the late 1990s. Evidence also suggests that the median company in the industry has not reduced its debt burden. It appears that some companies have increased the probability of finding themselves in a cash-strapped position.