Option Market Daily Price Contract Type
[Daily Forecasted Price] + [Energy Cost]*[Cost Shape] < [Zonal/Hub Price] EXECUTE OPTION
[Daily Forecasted Price] + [Energy Cost]*[Cost Shape] >= [Zonal/Hub Price] DON’T EXECUTE OPTION
This option represents the ability to buy power at a forward daily price for all hours in which the daily price is less than the actual reported zonal price, or market price. The zonal price is determined by the zone in which the contract resides, as determined by the Area column of the Portfolio Information table. The hub price is defined by the Underlying Hub column.
The average daily pre-forecasted price will be calculated on hour 10 of each day (or the nearest hour when sampling) and remain constant for a 24-hour period. It represents the average expected price for the next 24 hours and is based upon the internal forecast used in the commitment logic (see Commitment Logic for more information). This strike price can be adjusted by using the Energy Cost and Cost Shape columns, but these are not required. A blank value in the Energy Cost column will default to 0. 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. The amount of energy bought or sold is determined by [Energy Max]*[Monthly Shape]. 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 Market Daily Price Contract Type
