In today's environment, understanding how to how to structure profitable cross commodity transactions and leverage the financial returns of electric generating assets has never been more important.

What You Will Learn:

1. What the spark spread is and how it is traded; the details of tolling arrangements; and how to correctly convert fuel and electricity prices & quantities into equivalent terms.
2. What btu & heat rate swaps are, and how they can be used to diversify your firm's commodity price risk.
3. What spark spread options, heat rate options and synthetic options are and how they are used to create virtual generation assets.
4. Why a physical electric generating asset is equivalent to a spark call or heat rate call option, and why coal-fired and gas-fired generating units are valuable options in disguise.
5. Three different ways to hedge and monetize the optionality of physical generation assets.
6. The power of heat rate linked power transactions, and how to structure profitable virtual transactions without access to physical generation assets.
7. How to leverage the capacity of a physical generation asset using virtual capacity created by financial contracts.
8. Why physical generation assets, tolling arrangements, heat-rate-linked power deals, spark spread calls, and heat rate call options are essentially the same from a financial point of view.

Seminar Agenda

• Fundamental defintions and units of conversion, the difference between operational and economic heat-rates, spark spreads and MIHRs.
• A detailed look at tolling arrangements.
• How a btu swap can convert natural gas prices to crude oil-based revenues
• How a heat rate swap can convert natural gas prices to electricity price-based revenues
• What spark spread & heat rate call options are, and why they are the same financial instrument.
• What synthetic options positions are and how they relate to the put-call parity equation.
• Why owning or controlling a gas, oil or coal-fired merchant generator is equivalent to owning a spark spread.
• Numeric Example # 1: How to use forward energy contracts hedge electric generating assets (while keeping the upside potential associated with the plant's optionality).
• Example # 2: How to use physical generation assets to back the sale of a spark call option or heat rate option.
• Example # 3: How the optionality of physical generation assets can be daily dispatched to capture volatility-based margins between the electricity and fuel markets.
• What heat-rate-linked power transactions are, and why they are so powerful.
• Examples # 4 & #5: How to hedge electricity price risk with NYMEX natural gas futures contracts and options.
• Example # 6: How to convert a natural gas over-the-counter “paper” option into a physical electricity price cap
• Example # 7: How to financially arbitrage between electricity and natural gas prices.
• Example # 8: How a heat rate call option can mimic a physical generation plant.
• Why physical generation assets, tolling arrangements, heat-rate-linked power deals, spark spread calls and heat rate call options produce the same economic payouts and are essentially the same from a deal-making point of view.

Your Instructor - Houston

Kenneth Skinner, Ph.D. – Dr. Skinner is Vice President and Chief Operating Officer of Integral Analytics, a retail energy consulting and software development firm focusing on valuation of Demand-Side Management (DSM) programs, customer targeting for marketing and engineering applications, spatial load forecasting and feeder load-at-risk analysis, and traditional market research.  Dr. Skinner has 15 years of energy industry experience including 5 years as a Derivative Structuring Manager for Sempra Energy Solutions, a national energy supplier, focused on developing retail commodity supply strategies including portfolio risk management, hedging strategy, and least-cost supply opportunities.

Having worked with several energy consulting companies including Summit Blue Consulting, RDI Consulting and PHB Hagler Bailly, Dr. Skinner has significant experience in economic analysis and modeling of energy demand, forward energy prices, financial derivatives, transmission and pipeline capacity, natural gas storage, and generation assets using econometric time-series and cross-sectional analysis, statistical methods, optimization principles, real option valuation techniques; Structured valuation of distributed generation and electricity and natural gas commodity transactions, including demand response; Financial risk assessment and valuation of energy hedging strategies and market potential of new business ventures. He is fully trained in econometric methods, engineering principles, organizational development, optimization, and valuation techniques and has extensive experience with various software packages including Visual Basic, C++, SAS, SPSS, Crystal Ball, Matlab, GAMS, IREMM and ProSym.

Who Should Attend this Seminar?

Among those who will benefit from this seminar include energy and electric power executives; electric generation owners and operators; attorneys; government regulators; traders & trading support staff; marketing, sales, purchasing & risk management personnel; accountants & auditors; plant operators; engineers; and corporate planners. Types of companies that typically attend this program include electric utilities; power marketers; banks & financial houses; electric generators; coal and natural gas producers, accounting, consulting & law firms; municipal utilities; and government regulators.

Prerequisites

This fundamental level group live seminar has no prerequisites. No advance preparation is required before the seminar.

Why Choose PGS?

PGS seminars are known for their clear explanations and in-depth content. Register for a PGS program today, and team up with the leader in electric power and energy education. Join over 5,000 energy and financial professionals who have already attended one or more of PGS's proven courses. View Past Seminar Attendees

Hotel & Seminar Information

This one-day seminar will be held at the hotel listed below or can be conducted on-site at your facilities. The seminar will start promptly each day at 8:00 AM and will finish at 4:00 PM. The program includes continental breakfast, lunch, and coffee/cookie breaks. Attendees also receive a professionally produced seminar manual that can serve as a valuable office reference. Dress is casual for all seminars. 

Courtyard Marriott Houston by the Galleria
2900 Sage Road
Houston, Texas 77056
Telephone 1-713-622-3611
View Hotel Website

PGS Energy Training has secured a limited number of Courtyard Marriott hotel rooms at a special discounted rate. Please dial 1-713-622-3611 and mention the PGS Energy Training event for your discounted rate.

Registration Fee & Discounts

Register Now and invest in your future. The price for this one-day seminar is $975 (USD).

• Additional attendees and government employees receive a 10% discount.
   
• Sign up for 4 or more classroom seats during the same month and all attendees will receive a 20% total discount. ( If you plan to register 4 or more classroom seats, but want attendees to pay by separate credit cards, register one party now and mention this fact in the "Comments" section of the registration form. We will manually subtract the 20% discount from the first registrant's seminar fee. Tell other parties in your group to mention your name when they register, and we will give them the 20% discount as well.) Please call 412-521-4737 for more information.
  

Payment & Cancellations

Payment is due prior to the start of the seminar by Visa, Master Card, American Express, Diners Club, or corporate check. Seminar fees will be charged to your credit card at the time of registration unless other arrangements have been made. Please make checks payable to "PGS Energy Training" 43 Fawnvue Drive, Suite 700 • Mckees Rocks, PA 15136. Cancellations can be made up to three (3) business days prior to the start of the seminar for a full refund. No refunds will be made thereafter, but credit will be given toward future workshops. Substitutions may be made at any time. For more information on PGS policies regarding administrative matters and complaint resolution, please contact our offices at 412-521-4737.

CPE Credits

This group live seminar is eligible for 7.0 CPE credits. Be aware that state boards of accountancy have final authority on the acceptance of individual courses for CPE credit. As of January 1, 2002, sponsored learning activities are measured by program length, with one 50-minute period equal to one CPE credit. One-half CPE credit increments (equal to 25 minutes) are permitted after the first credit has been earned in a given learning activity. You may want to verify that the state board from which your participants will be receiving credit accept one-half credits.

PGS  Energy Training is registered with the National Association of State Boards of Accountancy (NASBA)  as a sponsor of continuing professional education  on the National Registry of CPE Sponsors. State boards of accountancy have final authority on  the acceptance of individual courses for CPE  credit. Complaints regarding registered sponsors  may be addressed to the National Registry of  CPE Sponsors, 150 Fourth Avenue North, Suite 700, Nashville, TN, 37219-2417. Web site: www.nasba.org. CPAs interested in attending any seminars  should contact our offices for details on CPE credits granted and any prerequisite requirements.