ACE PowerBacker

ACE PowerBacker^SM replacement power coverage is insurance protection designed specifically for participants in unregulated markets. Generators, buyers, traders and marketers all have found PowerBacker to be a flexible and efficient risk management tool.

PowerBacker provides a bridge between the physical exposures of unplanned outages and the financial exposures of volatile electricity spot markets. This is done by using a two-trigger policy that responds only when high market prices and an unplanned outage overlap.

The basic idea of PowerBacker is simple, and has been compared to a contingent call option. In the event that one of your units or a group of units sustains an unplanned outage during a period of high market prices, you will recover the difference between the market price index and a specified strike price for every megawatt-hour you lose. Loss measurement starts immediately; there is no waiting period as in a standard property insurance policy. In order to maintain proper incentives and control pricing there is a requirement that you retain some risk. This retention is flexible and can be structured in dollars, megawatts or market price. Please see the policy for complete policy provisions.

Frequently Asked Questions