Come a day early for PMA’s
most popular, in-depth seminar:
Fundamentals
of Power Marketing
Oct. 4, 2000; 9:00 a.m. to 5:00 p.m.
There are two distinct markets for power—
wholesale and retail. The skills and capabilities, the products
required in each differ dramatically. This one program will introduce
you to what you need to know to succeed in either- as buyer or
seller.
1. Introduction to the Power Industry.
A brief history of today’s power industry— private,
public, regulated and independent. The physical plant: powerplants,
transmission and distribution lines. The institutional structures:
Federal and state rate regulation, Independent System Operators
and control areas, FERC Order 888.
2. Getting Started as a Marketer.
Obtaining power marketer status; the importance of membership
in the Western Systems Power Pool; how and why to enter into
"pro forma" transmission tariffs, and standardized
interchange agreements. Review capital, personnel and software
and equipment requirements.
3. Lexicon of Power Marketing.
The major price indices; the forward curve; NYMEX electricity
futures contracts; basis contracts; puts and calls; collars;
recallable contracts; swaps; arbitrage; tolling agreements.
4. Marketer Products & Their Applications:
Indexed Transactions.
The simplest, lowest margin product is the index transaction.
Distinguish between market indices and artificial indices, when
indexed transactions make sense and when to convert to fixed.
Swaps.
Any expense or revenue stream can be converted into another expense
or revenue stream to create custom products.
Tolling Agreements.
How to design and price and agreement under which you "rent"
the use of a powerplant to convert fuel to electricity, or vice
versa, on both a physical and financial basis.
Option-Type transactions.
Options can be used to create price floors and ceilings, to devise
no-cost "collars", and recallable contracts. How to
price and design option contracts.
Finance-Type Transactions.
Project finance; valuation of generation capacity; mark-to-market
accounting; long-term purchase agreements; Unwinding existing
agreements
Serving the Retail Power Market.
90% of all customers simply want a price, fixed, for the year.
How to provide it using a combination of futures, basis contracts,
options and swaps.
5. Retail Power Marketing: Lessons
From the First Open Access Markets:
Review of the highlights of the California and Pennsylvania open
access legislation, of the Massachusetts New York and Illinois
Pilot Programs.
6. Key issues in Retail Access:
Stranded investment calculation, recoupment, and securitization;
practicable tariff design; utility affiliate abuses; fly-by-night
competitors; tax issues; metering requirements; credit and redlining.
7. Nuts and Bolts of Retail Marketing:
Marketing and Sales:
Branding, multiple product lines, sales force management;
Customer analysis and pricing.
The key functions: scheduling, nominations, balancing and billing.
8. Wrapup:
The $2 trillion deregulated electric power market of tomorrow
will hold plenty of opportunities for companies of all sizes
and capabilities. What will the industry look like tomorrow?
Where will the profit opportunities lie, and for whom?
Instructor:
Scott Spiewak has acted as advisor to many of the largest power
marketing firms in their efforts to establish themselves as leaders
in this new market. Among his clients are Enron, Natural Gas
Clearinghouse, Utilicorp, Williams, Zeigler Coal and Peabody
Coal.
Mr. Spiewak’s retail energy marketing
firm, Metromedia Energy, markets natural gas and electricity
in deregulated retail markets in the N.Y. region.
He is a member of the NYMEX Advisory Committee
on electric power contracts and Secretary of the Power Marketing
Association. Mr. Spiewak may be contacted at (201) 784-5349;
sspiewak@metromediaenergy.com |
