Grid Enterprise Financial Risk

Power grid enterprises have many evident differences with other kinds of enterprises: the singleness of equipment usage; high density of capital; high density of technology; the security of public services. Because of these unique points of power grid enterprises, the reform brings in not only chances but also some risks. For example, power crisis of California in USA make the whole world recognize the serious risks which faced by power grid enterprises. So many power grid enterprises make risk defense as a management means. Recently, the reform of electricity system has mobilized every side, which including power generation, power transmission and distribution, users and so on, to participate in power market. Of course, some uncertain factors exist in power market. When they happened, power grid enterprises may be confronted with huge losses. As a result, the competitiveness of power grid enterprises is due to their ability to manage and control risk.On basis of the existed financial risk theory, through empirical study and normative study, and according to the status of our country's power grid market, this paper analyses the financial risks which they faced. At last, this paper designs a financial risk prevention which fits for power grid enterprises.Firstly, this paper analyses conditions which surround power grid enterprises in two sides, including the reform of power system, the reform of investment management system, "the eleventh five" planning, and the growth of power demand and so like, corporate governance, investment and financing and so on. Based on that, this paper analyzes that every factor influences to enterprises and the defects in management system. According to the results, the paper educed financial risks which power grid enterprises face include the reform of power system, electric charge policy, capital market, technology progress, sudden event, natural disaster and corporate governance, investment and financing, capital operation, the management of rural area electricity, marketing management. Then, this paper elaborates how to identify financial risks. This paper takes Kaili power grid enterprise for example, screens a warning method which is suit for power grid enterprises.At the end, associating the common points of each industry with the special point of power grid industry, this paper designs a financial risk prevention which fits for power grid enterprises.