Option Fixed Price Contract Type
[Energy Cost]*[Cost Shape] < [Zonal/Hub Price] EXECUTE OPTION
[Energy Cost]*[Cost Shape] >= [Zonal/Hub Price] DON’T EXECUTE OPTION
This contract type represents the option to buy (or sell) energy at a fixed price. The amount of energy bought or sold is determined by [Energy Max]*[Monthly Shape]. When using a positive energy amount, this represents a “call” option. The option will be executed at the strike price when that price is less than the zonal price or hub price (defined by the Underlying Hub column). The zonal price is from the zone in which the portfolio resides, which is determined by the Area column of the Portfolio Information table.
The strike price is calculated as [Energy Cost]*[Cost Shape]. A null value in the Cost Shape column will default to 1. A monthly capacity charge can also be entered in the Capacity Cost column, and this will not affect whether or not the contract is executed. For hours when the contract is not executed, the Energy Min amount will be delivered at the strike price.
NOTE: Users can specify an annual limit in MWh in the optional Energy Amount Max field of the Portfolio Contract table.
NOTE: Users can specify a monthly limit in hours in the optional Monthly Max field of the Portfolio Contract table. The value is multiplied by Energy Max to yield a MWh monthly limit.
Option Fixed Price Contract Type
