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Meet a certified ERP

ERP_headshot_RafalKrzywicki

Rafal Krzywicki

Calgary, Alberta, Canada

Job at time of interview: Director of Origination, Capital Power Corporation

PLEASE TELL US ABOUT THE JOURNEY TO YOUR CURRENT ROLE, AND DESCRIBE THE WORK YOUR TEAM DOES?

I began my journey at EPCOR, learning how to flow power volumes from continuous Northeast power markets to manage small customer load positions. Over the course of the following three years I was able to move into short-term trading efforts, and then develop the power portfolio further. In April 2009, Capital Power was spun out of EPCOR. I was fortunate enough to work for the task force assessing North American commodity fundamentals to help shape Capital Power’s strategy. As far as how risk is assessed at Capital Power, I would say, first and foremost, there is a clear segregation of accountabilities across front, middle and back office. Capital Power has a very comprehensive risk framework that defines policy risk, procedures and guidelines. Within that risk framework, commodities are measured using VaR and VaR-based metrics in addition to stress testing and back testing to estimate losses at normal conditions and to calibrate our VaR measures.

COULD YOU SHARE SOME OF YOUR THOUGHTS ON THE ERP PROGRAM, AS WELL AS ANY FEEDBACK YOU'VE RECEIVED FROM YOUR COLLEAGUES AT CAPITAL POWER?

The feedback has been overwhelmingly positive. The two most common pieces of feedback I have received are, first, how applicable and relevant the designation is for anybody in the energy sector. To my knowledge the ERP is the only comprehensive designation that caters specifically to the energy sector, and as such is unique. Second, I have received many comments on the curriculum. For me specifically, what really hit home was how the ERP material is sequenced in a manner that provides candidates a clear picture all the way along the value chain, providing background into how a source of energy is originated, explored, extracted, and harnessed, refined, and marketed. And then, based on those foundations, candidates enter the world of energy risk derivatives, valuation, and risk modeling, and the application of risk management to real world scenarios. As to how Capital Power has integrated the ERP knowledge into its culture, I would say the ERP has quickly entered Capital Power's lexicon of professional accreditations. Certainly job profiles outline the ERP as a favorable job requirement. And based on discussion with leaders in Capital Power, the program is certainly endorsed by the front and middle office given its applicability to our business. I can tell you that I directly encourage all of my staff to explore the designation and go for it.

WHAT KINDS OF TRAITS, KNOWLEDGE, AND SKILLS ARE IMPORTANT FOR SUCCESS IN ENERGY TRADING AND PORTFOLIO MANAGEMENT?

There are many key traits, and skills for success. I would say, first, portfolio management decisions are often a balance between "art" (the intuitive side of things) and "science"(data and analytics). My view is that if the science side of the balance is properly applied, this knowledge will increase one's chances of success when applied properly. So the first key trait to me would be a drive for analytical proficiency, given that energy commodities are complex, related, and typically highly volatile. Comprehending the relationships that drive the values of these commodities requires delving into vast amounts of data, analyzing that data, and being able to draw conclusions from it. The second trait would be a little bit softer. I would suggest that it would be discipline. Discipline is truly a key for long-term success. Analytics and discipline go hand-in-hand in managing portfolio risk-return relationships.

WHAT PIECES OF ADVICE MIGHT YOU SHARE WITH CANDIDATES WHO MIGHT BE INTERESTED IN ENERGY PORTFOLIO MANAGEMENT AS A CAREER?

The first is know your market. In my view, success in energy trading is founded in grasping the elemental physical aspects of the market you are active in. This means developing an understanding of the physical energy commodity that you are interested in, and ultimately how prices are formed through supply and demand fundamentals. The ERP to me is a clear starting point, given the breadth of material that is covered within the designation. And the second one, again, is a little softer. Be curious. Develop your inquisitive drive to understand problems more holistically, covering and drilling into fundamental drivers of market challenges and not settling for a status quo understanding.

WHAT ADVICE COULD YOU GIVE SOMEONE WHO IS LOOKING TO ENTER THE ENERGY FIELD AND HAS EARNED THEIR ERP BUT MAY NOT HAVE ANY ACTUAL ENERGY EXPERIENCE YET?

Assuming you are coming into the commodities sector, you are probably moving into an entry level position. And compared to any other candidates, having the three letters ERP behind your name automatically differentiates you. From my standpoint as a hiring manager, I would certainly look at a candidate who has that experience. And frankly, it allows you to speak that same language as the hiring manager. So immediately, your foot is in the door. Once you start, concepts that would take several weeks if not months to grasp are already at the forefront.

WHAT VALUE COULD THE ERP BE FOR SOMEONE WHO ISN'T LOOKING TO SPECIFICALLY GET INTO RISK MANAGEMENT?

Going through the sequence of the curriculum gives you a very broad understanding of the energy complex. I am living proof that outside of the risk management middle office function, the trading or front office type functions also find material value from the ERP curriculum. I would also suggest anyone going into the acquisition and development space in commodities would stand to benefit from the ERP curriculum. There is proper background into how commodity markets were formed, through to LNG and pipeline economics, regulatory consideration etc. I think that the curriculum is broad enough to be able to support any type of position that is directly or indirectly related to the energy complex.

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