risk management
Credit Risk Management
FGU's credit policy objective is to minimize "credit risk" while continuing to maximize FGU's "credit worthiness". Credit risk refers to the financial exposure that FGU has in the event of nonperformance by counterparties pursuant to the terms of their contractual obligations. FGU has implemented the credit risk management strategy in evaluating its counterparties. Through the use of this strategy FGU is in a better position to achieve the following: (a) make informed decisions as to the credit worthiness of a counterparty, (b) increase sales to counterparties with timely payment histories, (c) and prevent over-extension of financial assets due to uncollectible or delinquent accounts. As a result of the successful implementation of this strategy, FGU expects to enhance its credit worthiness with counterparties and minimize overall credit risk. FGU will have the ability to meet its payment requirements and purchase competitively priced and reliable gas supply for its members and affiliates through the continued use of this strategy and remarket members' excess capacity which brings additional value back to its members.
FGU's credit risk management strategy attempts to address all of the factors that potentially create financial exposure to FGU. With this strategy in place, FGU will be able to meet all cash flow requirements and continue its ability to purchase competitively priced and reliable gas supply for its members and maximize the value of excess assets for it members.
Price Risk Management
FGU assists in the control and limitation of the risks facing its members due to exposure to changes in natural gas prices. FGU affords its members the opportunity to manage gas price exposure through physical and financial hedging products.