Investor-Owned Utilities

New forms of insurance and risk management products have been developed to enable Investor Owned Utilities (IOUs) to control their level of risk exposure to:

• The firm supply obligations of native load and other regulated transactions;

• Short-term generation unavailability associated with wholesale power trading operations, and

• Innovative new retail tariffs.

The options for mitigating these exposures include forward purchases of additional megawatts, options products or interruptible programs. These alternatives can be expensive and create considerable basis risk. ACE PowerBacker^SM is a more cost-effective solution.

ACE Power Backer transfers the financial exposure associated with an unexpected outage or other physical event. ACE Power Products will pay the difference between the insured price and the cost of replacement power.

The ACE Power Products team can develop custom structures tailored to an IOU's unique risk management strategy.

• The generation asset can be a single unit or a complete system.

• Limits of up to $150 million are available.

• Policy terms can be monthly, seasonal or multi-year periods.

• An additional trigger for extreme weather events is available.

• Industry experts assist in transaction structuring.

• Unit and system historic forced outage data are analyzed.

• Desired confidence levels are determined.

• The financial effects of a generation outage are evaluated.

• Optimal transaction structures are recommended.