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.

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?

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;

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