Nodal Exchange and LCH.Clearnet Introduce New Power Contracts for Energy Plus Congestion

Mar 29, 2012

Nodal Exchange, LLC and LCH.Clearnet Limited (LCH.Clearnet) today introduced new power contracts for energy plus congestion for over 50 locations in PJM.  Offered in direct response to requests from the trading community, these contracts will settle against the Day Ahead Energy plus Congestion prices published by PJM. These contracts will be available for current month plus 48 months forward. 

“Nodal Exchange is very pleased to be able to offer these new contracts which are effectively Financial Transmission Rights (“FTR”) equivalent contracts, with the key advantage that there is no underfunding or capacity constraint in our cleared environment.  With these new contracts, our existing PJM energy-only contract, and our existing full suite of Locational Marginal Price (“LMP”) contracts, participants will now be better able to meet their specific hedging needs,” said Paul Cusenza, chief executive officer of Nodal Exchange. “In fact, by trading various combinations of these contracts, participants can now obtain congestion only and loss only positions in addition to LMP positions for any of these over 50 locations, and paths between them, as desired.”   

Alberto Pravettoni, managing director, LCH.Clearnet said: “The launch of these contracts demonstrates yet again our ability to respond quickly to market needs. Participants now have a greater variety of instruments available to hedge their positions as they see fit. Together with Nodal Exchange, we continue to extend our support of the US financial power market through the provision of clearing services, bringing stability and liquidity to the marketplace.”   

Nodal Exchange has introduced over 3,800 cleared power contracts with over 70,000 expiries offering the largest product set of cleared contracts for power.  In addition, the company also offers a contract on Henry Hub for natural gas. Since launch, Nodal Exchange has processed trades with over $19 billion of notional value. All Nodal Exchange contracts are cleared by LCH.Clearnet and are financially settled.  

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