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| ISO New England Monthly Peak, Monthly Off-Peak, and Daily Peak Location Marginal Pricing Swap Futures |
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Independent System Operator (ISO) New England, the independent system operator for the region, is a not-for-profit corporation that operates the wholesale power market for Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont. ISO New England consults with NEPOOL, now a voluntary association of more than 200 entities engaged in the electric power business in New England, to develop the market rules and tariffs for the regional wholesale electricity market.
The power transmission system of ISO New England system serves a population of approximately 14 million individuals. The New England power grid is fueled by diverse resources - oil, coal, natural gas, nuclear, and hydropower - and has 12 interconnections with the power grids of New York State, Quebec, and Ontario.
To help market participants better manage their market risk while mitigating counterparty risk, the New York Mercantile Exchange, Inc. provides futures contracts for on-peak and off-peak electricity transactions established for the location marginal prices for the hourly day-ahead market for, and published by, ISO New England.
The financially settled contracts are available for trading through the NYMEX ClearPort® trading platform, or can be submitted solely for clearing.
Trades in the on-peak contract are conducted in units of 2.5 megawatts per peak hour for each peak day of the contract month. Each month has between 19 and 23 peak days and there are 40 megawatt hours (Mwh) in each 16-peak-hour day. Therefore, the contract size varies between 760 Mwh and 920 Mwh, depending on the number of peak hours in the contract month.
Trades in the off-peak contract are conducted in units of 2.5 megawatts per off-peak hour. Total contract size ranges from 880 to 1,060 Mwh.
Trades in the daily peak contract are conducted in units of 40 Mwh per peak day. |
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