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Come a day early for PMAís most popular, in-depth
seminar:
Fundamentals of Power Marketing
October 15, 2001; 9:00 a.m. to 5:00 p.m.
There are two distinct markets for poweró 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 todayís power industryó 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. Spiewakís 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
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