Underwriting

Contingent Outage

Unplanned outages and derates, when a plant runs at reduced capacity, can create considerable financial loss for a power producer, particularly during spikes in power prices. Avoid the competitive disadvantage of being forced to purchase power at unpredictable pricing. The AEGIS Contingent Outage policy is a double-trigger policy which covers the difference between the insured price and daily realized prices based on MW lost and number of hours of the unplanned event. Coverage is available in the NYISO, NEPOOL, PJM, California ISO, Ercot, MISO and SPP regions.

  • Maximum US $30 million aggregate limit per generating unit per policy. 
  • One year policy period. 
  • Ability to cover several plants on one policy.
  • The insured price can be:
    • A fixed price – generation cost or cost plus margin – for the duration of the coverage,
    • Variable per month, or 
    • A “spark spread” – based on natural gas.
  • Settled on Real-Time (RT), Day-Ahead Market (DAM) or both.
  • Coverage typically begins from day one of the unplanned event.
  • Settlement process is straightforward:
    • Difference between the realized prices (as published) and the insured prices, multiplied by MW lost and the length of the unplanned event.
    • RT and DAM prices are published public information; adjusters are not needed.