Underwriting

Capacity Performance

Power producers who clear in the PJM auction are contractually obligated to provide capacity on demand. When a power producer is unable to meet its obligation during emergency events, PJM assigns steep non-performance charges, which have increased significantly in recent years. The AEGIS Capacity Performance policy is a double-trigger policy which indemnifies power producers against the fixed charges suffered due to inability to provide committed capacity during system emergency periods as a result of an unplanned event.

  • Up to US $50 million aggregate limit per policy.
  • Twelve types of emergency events are covered.
  • Policies may be bound for future years. Limits are set per year. For future years, the risk incepts at that time.
  • Typical policy period is from June through May.
  • Event duration: 365 days.
  • Ability to cover several plants on one policy.
  • Settlement process is straightforward: Emergency events are published public information; adjusters are not needed.