Option Market Daily Price Cap Contract Type
[Energy Cost]*[Cost Shape]*MIN([Daily Forecasted Price], [Price Cap]) < [Zonal/Hub Price] EXECUTE OPTION
[Energy Cost]*[Cost Shape]*MIN([Daily Forecasted Price], [Price Cap]) >= [Zonal/Hub Price] DON’T EXECUTE OPTION
The strike price for this option is determined by the minimum of the input price cap and the average daily pre-forecasted price (see Option Market Daily Price). The strike price can also be increased by factors which are input in the Energy Cost and Cost Shape columns. For any hours when the strike price is less than the market price, the option will be executed. 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.
A blank value in the Energy Cost column will default to 0, so if no adjustment is desired to the daily price the value in this column should be set 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. 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 Cap Contract Type
