The Committee of Chief Risk Officers (CCRO), which was formed in 2002 to establish bottom-line standards for energy traders, plans by this summer to establish a best practice financial framework to serve as the foundation for the Standard & Poor’s (S&P) quarterly request for financial data.

A working group within the 30-member CCRO has been working with S&P analyst Tobias Hsieh to establish the framework.

“We are excited about the opportunity to work with S&P to develop a next-generation framework that investors will find useful by disclosing all necessary data to determine a company’s liquidity position and strategy,” said Andrew Sunderman, co-chair of the CCRO’s Financial Liquidity Working Group. Sunderman is the chief risk officer for Tulsa-based Williams.

“By July, we hope to determine how best to ensure the addition to the framework metrics representing relatively secure sources of liquidity, including operating cash flow, inventory, and the most meaningful way to include receivables and payables,” Sunderman said.

Hsieh said S&P shared “CCRO’s goal of establishing our framework as a robust measure that adequately reflects the liquidity of energy companies in time for the next survey request.”

Bob Anderson, CCRO’s executive director, said, “The over-arching goal here is to provide investors and the rating agencies that serve them with complete and transparent information as well as a comprehensive analytical framework that accurately represents a company’s liquidity condition.”

The companies most active in the Liquidity Working Group include CCRO members Constellation Energy, El Paso, PSEG and Williams. Avista Corp. is among the guest participants in the effort.

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