Commercial Operations and Risk Management
Project Specs
- Over 9,300 MW of merchant generation under commercial management
- National trading floor transformed into high performance organization
- Optimization of energy-related commodity positions in all major U.S. RTOs and markets
- Almost $500 million of commercial value created
Project Approach
DECARB’s Managing Partner was commercially responsible for one of the largest unregulated portfolios in the U.S. with over 9,300 MW of generating capacity located in three major regional transmission organizations (RTOs), earning a total of almost $500 million of incremental margins. All aspects of plant dispatch, fuel procurement and scheduling, short-term market optimization, commodity hedging and risk management, and business unit planning were managed. Wholesale and retail power marketing strategies were designed and executed to improve profitability. The unregulated generation business earned a total of almost $500 million of incremental margins.
DECARB’s Managing Partner was responsible for all front office activities of a multi-billion national commodity trading floor, turning around a distressed trading floor into a profitable organization within two years. During a disruptive period with high attrition, the trading floor was completely transformed into a high-performance organization with a culture of financial and operating success, employee satisfaction, and personal accountability. Long-term strategies were implemented to reposition the business for continued growth centered around the company’s substantial merchant generating fleet.
Commodity positions were managed and optimized in all major RTOs, including PJM, MISO, CAISO, SPP, ERCOT, ISO-NE, and NYISO. Energy-related commodity positions under active management included physically and financially settled power and natural gas contracts at all major trading hubs, coal, oil, emission allowances (including RGGI allowances), and renewable electricity credits. Firm power transmission reservations, financial transmission rights, and congestion positions as well as physical natural gas supply, transportation, and balancing positions were optimized. Capacity positions in auction-based markets and bilateral capacity markets were also actively managed to support business unit profitability.
