How Can We Bring Users Together with Developers?
By using financial hedge arrangements we can satisfy both the developer’s need for long term contracts at a reasonable price and the energy user’s desire to support renewable development and control their long term energy costs.
A financial hedge contract involves an agreement directly between the owner of the renewable power projects and the interested energy user. It is a financial agreement beneficial to both project owner and energy user.
The financial hedge is not a sale of energy from project to user. It does not involve the transmission of power from the renewable project to the user. The energy project could be in North Dakota and the energy user in New England. The connection between energy project and user need only be financial, not physical.
The energy user need not change how they buy electricity. The financial hedge can be negotiated without regard to the location of the energy project or the energy user.
The energy user could choose to remain on default service from their host utility in a state where there is retail competition. The energy user could be in a state like Vermont, where there is no retail competition or customer choice. The energy user could be buying electricity from a competitive supplier or buying electricity as a New England –ISO market participant. The financial hedge could work in all these cases.
Click below (What is the Financial Hedge?) for more details
