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Generation Owners
PPL EnergyPlus provides the following Asset Management products to generation owners:
- Asset Management: PPL EnergyPlus will manage all the obligations of the asset including:
- Providing related unit cost information, unit offers, unit availability and settlement with the ISO.
- Providing hedge recommendations to manage price and volume risk.
- Offering hedge execution and/or implementation (purchases and sales) to establish revenues and costs.
- Position Management: PPL EnergyPlus’ position management capabilities include options for generation owners:
- Power Purchase Agreements (PPA): This product provides a fixed price for a block of energy and capacity. The PPA price represents the market value on the date of the sale, and the PPA buyer bears the market price risk going forward. PPAs can also be based on a monthly or daily fuel price times an agreed upon heat rate (but still according to a fixed block delivery schedule). PPAs are either financial or physical.
- Note: PPL EnergyPlus enters into PPAs for renewable energy projects as well as conventional generation assets.
- Heat Rate Call Options: This product provides a premium for the right to call on energy at a strike price determined by an agreed upon heat rate and fuel price index (natural gas and/or oil). The heat rate option premium paid to the seller represents market value of the option at the time of the sale, and the option purchaser bears the risk of change in market value of the option going forward. The standard heat rate call option is a 5x16 financial product, but can be for non-standard hours and can also be physical.
- Power and Fuel Procurement/Sales Strategies:
- PPL EnergyPlus provides management and optimization strategies in a volatile marketplace.
- PPL EnergyPlus offers dynamic and responsive action plans for procurement and delivery of gas, coal and oil.
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