Generator Bid Protection

ACE Power Products has developed a PowerBacker^SM insurance solution for generation suppliers who bid their generation into PJM or other ISOs with multi-settlement pools. Under present market rules, suppliers who have submitted day ahead bids to the ISO and received bid acceptance are obligated to provide this scheduled energy to the pool EVEN IF THEIR GENERATOR EXPERIENCES A FORCED OUTAGE. This creates an unanticipated market exposure to real time pool prices for suppliers who must “make up the megawatts.”

ACE has an insurance solution to eliminate this risk to suppliers. PowerBacker^SM Generator Bid Protection will provide financial indemnification to generation suppliers for up to two days following a forced outage on a unit bid into a multi-settlement ISO. Suppliers will recover the difference between their bid price and a pre-specified strike price for every megawatt hour the supplier fails to deliver to the ISO as a result of the forced outage, defined under the policy. Unlike a call option, there is no waiting period or option exercise delay. The indemnification begins immediately.

Because this insurance provides coverage for a short duration (up to a maximum of two on-peak days), it is typically priced competitively for customers' needs. Nevertheless, the protection it provides is for the most volatile period immediately following a generator trip when real time prices surge. It provides a solution that is both cost effective and complete. This insurance policy is ideal for risk adverse suppliers who wish to eliminate spot market exposure.

To learn more about these customized solutions call us directly at 1 800 356 2827 or call your insurance broker.