| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 706185 | The Electricity Journal | 2011 | 5 Pages |
Abstract
The numerous benefits of electricity forward trading come at a cost to consumers when a forward price contains a risk premium. An analysis based on the theory of cross hedging suggests that there is a risk premium of about 5 percent in the forward price for delivery at the Mid-Columbia hub of the Pacific Northwest. The existence of a relatively large risk premium suggests that forward contract buyers are more risk-averse than sellers.
Related Topics
Physical Sciences and Engineering
Energy
Energy Engineering and Power Technology
Authors
Andrew DeBenedictis, David Miller, Jack Moore, Arne Olson, C.K. Woo,