Navigating the Gridlock of Regulatory Compliance
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Rising above the operational risks, customer complaints and customer-facing processes, industry regulations are the most significant compliance challenge for companies in today’s day and age. Owing to the rising regulatory compliance across the globe, companies have to anticipate regulatory mandates in real-time and implement the most cost-effective compliance solution. Designing compliance programs without restricting innovative improvements is an act very difficult to balance.
The following are the key areas where regulatory demands display a significant impact:
Cybersecurity
Energy and utility companies will have to step up their voluntary efforts along with the evolution of mandatory regulations in cybersecurity operations and activities. As a part of an integral and robust cybersecurity compliance program, companies must set up effective governance structures, accountability frameworks, and processes. Energy and utility providers should establish meticulous regulatory monitoring and change models, and be prepared for agile responsiveness.
Operational Safety
The protocols of asset infrastructure and management within the energy and utility companies are outdated. Increased use of robots, sensors, automated leak detection, smart pigs, and shut-off tools can help in mitigating various operational risks. Intelligent use of information systems can do real-time visualizations and consolidation of data across multiple systems. Furthermore, machine learning and predictive analytics technologies can help in the proactive prevention of failures and better prioritization of asset risk and replacement.
Price Reporting
Price reporting holds substantial interest for regulators as well as providers. Correct information about the transaction price provides regulators with the visibility and insights into how prices are derived. On the other hand, the providers get information about how their business will impact market at different locations. Owing to the price reporting programs, regulators are concerned with how to use the data despite the safe harbor rules.
Performance-based Regulations (PBR)
Regulatory frameworks are shifting away from the 'cost-of-service' model to a 'value-of-service' model. This can enable companies, customers and society to meet individual goals. This creates opportunities to transition to higher efficiencies that are better distributed and environmentally responsible.
Market Surveillance
New requirements such as MiFID II impose vigorous trade surveillance in the energy commodity markets. Exchanges and power system operators are now active in overseeing trading by deploying automation and new technologies. The Intercontinental Exchange, for example, uses NASDAQ's SMARTS trade surveillance system to monitor trading on its platform.
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