Gas schedulers may not buy software, but they deserve a louder voice in the decision.
There’s an old saying in the ranks of energy trading and risk management (ETRM) software vendors that goes something like,
"Gas schedulers don’t buy software..."
...meaning that while schedulers are generally involved in software selection, others, particularly the traders and risk managers, have most of the clout in determining which product to purchase. This thinking has often led to software development that focuses more on the needs of those influencers and less on the schedulers.
Whether the saying always holds true or not, we believe this thinking undervalues not only the role of the gas scheduler in contributing to the profitability of the business, but also the value of a comprehensive set of ETRM software tools that meet the needs of all users. An effective ETRM software solution should ensure that schedulers can efficiently and accurately balance pipelines and storage assets under tight nomination deadlines, while also providing the operational visibility that enables them to optimize gas flows, reduce costs and risks, and contribute to the business' bottom-line performance.
Challenges for Gas Schedulers
Schedulers, being the intermediaries between the traders and pipelines, arguably have the most difficult jobs in gas trading and marketing. They must constantly balance (pun intended) the commercial activities of the traders with the operational demands of the pipelines, including handling the inevitable last minute deals that get done right at the scheduling deadline.
In addition to the mundane and unenviable tasks of managing monthly actualization and accounting close cycles, schedulers face a formidable list of challenges:
- daily multiple gas nomination cycles
- rapidly changing positions
- deals that don’t get confirmed on a timely basis
- gas imbalances sitting on the pipelines
- operational flow orders (OFO) that seemingly come out of nowhere
- pipeline constraints that impact scheduled volumes
Why Gas Scheduling Software is Needed
Although schedulers operate in a fast paced and high pressure environment, most schedulers don’t have the appropriate tools to effectively manage their jobs.
While traders are notorious for keeping spreadsheets despite having a full ETRM software solution at their disposal, perhaps there is no more widespread use of spreadsheets than in the gas scheduling function. In fact, because many ETRM systems do not meet the needs of schedulers, experience has shown that in a majority of gas trading shops, scheduling groups commonly treat the ETRM system as an after-the-fact tool…one that is updated only after the morning trading cycle, using data from their spreadsheets.
Using spreadsheets in this fashion invites a litany of well-known problems and risks:
- "fat finger" keystrokes resulting in rejected nomination submissions
- subtle calculation errors that go unnoticed for days or weeks that may lead to pipeline penalties
- cross entry errors between spreadsheets and the ETRM software that cost hours in reconciliation efforts
- lack of an audit trail in the spreadsheet which raises the specter of regulatory fines
…and the list could go on.
A Critical Requirement for the Critical Gas Scheduling Function
Bottom line — having a critical business function such as gas scheduling rely on spreadsheets is not only risky, but it undermines the value of the investment made in ETRM software.
At Eka, we believe ETRM software should be a real-time solution for the gas trading function, not an after-the-fact data repository. We’ve designed our gas scheduling software to ensure gas schedulers have the proper tools to do their jobs within the system, enabling schedulers to optimize physical gas flows and avoid unpleasant operational surprises and penalties that negatively impact the bottom line.
Given the mission critical role gas schedulers have in the business, we think schedulers should have a very loud voice in any ETRM software purchasing decision.
