Hourly/Term Trading Services
ACES’ Trading Team combines industry expertise with strong market relationships to provide trade execution services across North America. By utilizing custom strategies and analytical tools ACES Traders transact monthly, daily and hourly deals to optimize Client portfolios while maintaining defined risk tolerances.
Portfolio Strategy Services
The company launched its Portfolio Delivery service in 2011 with the objective of improving the way ACES delivers analysis and hedging recommendations to its members. The service has grown in importance as clients adopt more individualized hedging strategies, long-term strategies for power supply portfolios, and as the industry faces new and growing long-term challenges from competition, coal retirements, EPA carbon regulation and changing market and RTO structures.
Recognizing that less of the team’s time is being spent coordinating the delivery of recommendations and more time working with members on the power supply strategies that address the broader risks facing our clients today, ACES decided to rebrand the Portfolio Delivery team as “Portfolio Strategy”. The same team will continue to be the key interface with members for any long-term portfolio recommendations and will lead client strategy projects for ACES, as directed.
Portfolio Modeling Services
Cost-to-serve and asset values are influenced by energy and fuel prices, load growth, unit outages and other volatile parameters. ACES’ Portfolio Modeling group uses sophisticated software to forecast commitment/dispatch and market interactions to calculate cost-to-serve load and the risks around that cost for your portfolio, for both structured and traditional markets. Knowing the risks inherent in a Client’s portfolio is critical to designing and implementing a customized hedge strategy.
ACES’ Scheduling Group puts the finishing touches on trade execution for our Clients by ensuring that deals are appropriately scheduled in both the physical and nodal marketplaces. By using proprietary market tools and advanced scheduling software ACES Schedulers are able to coordinate and confirm hundreds of transactions daily.
Energy market participants are faced with ever changing challenges in managing risk that can impact their energy portfolios. Doing business with other wholesale energy businesses in regional forward markets is an important dimension to that risk management. The ACES Origination Group develops and maintains solid commercial relationships with an array of energy market participants including investment banks, private equity firms, power marketing entities, municipals, investor owned utilities, developers, independent power producers and other Generation & Transmission wholesale power cooperatives. They act as agent in the commercial market place to find, assess, and transact risk mitigating products for our Clients across the U.S. The ACES Origination Group adds further value by working with other ACES groups to tailor structured products to individual Client portfolios for the long-term.
Managing transmission congestion risk in the constantly evolving energy market is a challenging undertaking, one that is difficult to manage without the proper expertise. The ACES Transmission Group, made up of a diverse mix of seasoned analysts with various educational and professional backgrounds in engineering, finance and economics, can help manage that congestion risk and forecast energy and basis pricing across the U.S.
The Transmission Group provides execution services for financial transmission products for each of the structured power markets (ISO/RTOs) in the U.S. They also analyze physical transmission portfolios in traditional markets, as well as conduct generation siting studies, evaluate new transmission build, and forecast the impact of renewable energy development. Using a complex economic power flow model, the group forecasts long-term basis and congestion pricing for delivery locations throughout the U.S.
The analytical work done by the Transmission Group helps to hedge power basis and delivery risk and directly complements the power and fuel hedging done by the ACES Trading Team.
The United States generation fleet is highly dependent on natural gas, and is expected to become more dependent as the demand for power grows and building new coal-fired generation becomes increasingly difficult.
ACES is particularly adept at meeting the needs of those who own gas-fired generation, and can actively manage your natural gas assets. ACES can assist with the entire process, from natural gas generation plant development, transportation, and storage agreements, to the execution, transportation, and balancing of natural gas supply.
In addition to ACES providing short-term optimization of natural gas assets, we also provide risk management solutions that offer long-term supply certainty for otherwise uncertain fuel prices. We do this through the development of long-term natural gas supply plans and hedge strategies.
While natural gas continues to fuel a larger portion of the overall U.S. generation fleet, coal-fired power plants continue to demand a large share of overall generation. ACES has the expertise to provide coal market intelligence, coal supply and transportation strategy development, and coal supply and rail contract negotiations. In addition, ACES provides risk management and hedging services for fuel oil exposure found in many rail and coal contracts that fluctuate with the price of crude oil.
ACES can assist with the development of fuel hedging strategies and coordinate implementation of the required tools to hedge. This includes ISDA agreements and NYMEX accounts, and the execution and management of financial fuel transactions, both in the over-the-counter market and on the exchange.
In a world where the fuel mix for power generation is changing, uncertainty in fuel supplies and prices must be managed. ACES provides the expertise to manage these risks.
Environmental Market Services
Several years ago, only a handful of states implemented Renewable Portfolio Standards (RPS). Today, more than 30 states have implemented RPS and Renewable Energy Services are an increasingly vital aspect of ACES’ service offerings. Meeting these renewable standards requires a stratified approach. To help Clients respond to these new challenges, ACES implemented several services including market identification, purchase and sales hedging strategies, legislation analysis, and Renewable Energy Credits transaction services.
In addition to renewable services, ACES also offers emission services, another critical component of ACES’ integrated approach to portfolio management. ACES’ Environmental Group works closely with ACES’ Energy Trading Teams to optimize real-time generation dispatch and with Structuring and Origination on long-term planning and hedging recommendations for our Clients.
Trading Control Services
The purpose of Trading Control is to ensure that a sound and disciplined control environment is maintained associated with the transaction execution function. Trading Control personnel are located at each of ACES’ Regional Trading Centers and at ACES’ national headquarters. Trading Control is responsible for ensuring all executed transactions are captured in ACES’ risk management systems completely, accurately and timely. Trading Control performs various transaction review processes and reconciliations to validate the accuracy of the transaction data, including maintaining the confirmation process. Trading Control reviews all executed transactions for compliance with applicable trading authority policies. Additionally, Trading Control monitors Client portfolios for compliance with associated hedge policies. Trading Control assists Clients with development of various risk management policies including energy risk management, trading authority, sanctions, and hedge policies. The Portfolio Valuation function within Trading Control develops forward curves and performs mark-to-market valuations of forward transactions.
Credit Risk is the potential that a counterparty will fail to meet its obligations in accordance with agreed terms. Since exposure to credit risk continues to be the leading source of problems for companies, ACES provides its Clients with a keen awareness of the need to identify, measure, monitor, and control credit risk. In addition, ACES periodically updates the counterparty credit files, monitors daily counterparty credit exposure and assists in the negotiation of credit terms within contracts for its Clients. The effective management of contract credit risk is a critical component of a comprehensive approach to risk management and essential to the long-term success of any organization.
Contract Administration Services
The strength of a business transaction is ultimately only as good as the strength of its underlying contract. ACES’ Contract Administration Services are a key element in managing business risks and opportunities in competitive and volatile wholesale energy markets. Beyond managing over 2400 agreements, ACES assists Clients in a multitude of areas including:
- negotiating provisions in several types of contracts (e.g. EEI, ISDA, NAESB, Renewable, and Emission standard agreements)
- coordinating with ACES’ Credit Department on credit provisions
- implementing contractual controls
- ensuring contracts are in place to facilitate on-going trading activities
- ensuring that existing contracts contain up-to-date credit provisions and adequate contractual provisions to minimize unreasonable business risks
The breadth of experience the ACES Contracts staff possesses, allows Clients to enjoy comprehensive services from contract negotiations through to custom reporting.
The substantial and constantly changing regulations surrounding the energy industry (especially the power industry) tend to have significant commercial impacts. ACES’ Regulatory Services Team focuses on the activities in organized energy markets (RTOs), as well as on the mandatory reliability standards enforced by the North American Electric Reliability Corporation (NERC). Services provided by the team include: monitoring and analyzing changes in market regulations and recommending strategies and responses to the changes, providing representation and support to Clients through committee participation, and performing research and timely reporting on market and regulatory activities. The dedication, time, and expense of keeping pace with constantly evolving markets can make ACES’ Regulatory Services a valuable service for your company.
MISO & SERC
ERCOT & WECC
SPP & NAESB
PJM & CAISO
Education can be key in overcoming barriers in the energy industry. ACES provides a broad suite of training on subjects such as risk management, NERC standards, and various market topics. Dozens of courses can be accessed through ACES Learning Management System from any location with an internet connection. Alternatively, courses may be customized to fit a Client’s specific needs and delivered in person or through webinars. Several of the online courses provided by ACES are eligible for NERC Continuing Education Hours and other professional certifications (CPAs, PEs, etc.) as well.
Once executed, and prior to financial settlement, the details for power and gas transactions require analysis and verification. With our extensive expertise in both organized and traditional markets, ACES is a smart choice for settlements services and a fiscally responsible alternative to costly settlement software.