ERCOT Power

Anyone have any thoughts on whether the ERCOT OTC power market will ever trade as fixed price power instead of heat rate?

 

Its been like that for a while. Where have you been?

 

how so?

 

Ice... Fin or phys? I'm referring to fin.

 

referring to physical products further out on the curve that are mostly heat rate.

 

Only thing I can thing of is to roll out of the gas as soon as you put on the HR?

 

just curious about any fundamental reason why ERCOT trades heat rate.

 

2/3 of capacity in ERCOT is gas as far as I can tell...I guess its the same reason you don't see people clamoring to do MISO heatrates.

You can get stuff (fin) further out on the curve, its just not on the screen.

 

It's traditionally a physi market. gas is on the margin almost always.

you can buy fin swaps on ICE, as mentioned.

what's wrong with heatrates? If you want FP power just cover the gas leg as soon as you put the HR on.

HR's mostly for the term. Dailys & Balweek are usually FP.

 

ERCOT makes me sweat and break out in hives.

ERCOT is the only heat rate market that makes sense these days (in terms of correlations)... if you wanted to trade financial power without heat rates just go to PJM-W. Suicide to do it with ERCOT, besides, it would be very difficult to get a remotely decent quote without the gas component.