Tailored Hedge Products

Through close analysis of granular fundamentals, DC Energy provides innovative and tailored hedge products to help shield participants from market uncertainty, so they can focus on the operations of physical production and delivery. Since standard trading products are insufficient to adequately hedge risks in a manner compliant with cashflow and accounting requirements, our trading partners seek out our tailored hedges to properly reflect the unique and complex risks they face.

DC Energy competitively prices custom products to hedge well-defined risks associated with a set of events or contracts, with payouts trigged by hypothetical future scenarios. With expertise in the underlying complexities and risks inherent in pricing the transport of electricity and natural gas, DC Energy tailors risk-management products to account for unique characteristics of volumetric, temporal or locational volatility, for example:

• In markets where standard contracts are not available for specific generation locations, DC Energy provides spread contracts to cover the risk between the market price at the zone or hub and the actual location of the generator.
• In a market where storage is limited and actual market needs are not completely predictable, there is a constant need for managing the risk associated with unexpected or unmet demand. This demand cannot be efficiently hedged by standard contracts that specify a predetermined price and volume. DC Energy provides volume-shaped contracts to match the actual exposure.

DC Energy has priced and provided a number of other custom products to meet the needs of trading partners.