Application of financial options theory to electric utility decision making in integrated resource planning and maintenance shutdowns

Frank Felder

Application of financial options theory to electric utility decision making in integrated resource planning and maintenance shutdowns

Rutgers University

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution

Abstract

Increased competition in wholesale power generation will allow electric utilities to use financial models to improve their decision making. This competition will result in the creation of electricity spot, futures, and forward markets, which will provide necessary information for utility executives to used advance financial tools, such as random walk models and options theory. These models will allow executives to place a value on risk. Once this value is known, executives can determine how best to manage that risk, whether by entering into financial transactions, adjusting their operational and planning decisions, or both.

Original language	English
Title of host publication	Proceedings of the American Power Conference
Editors	Anon
Publisher	Illinois Inst of Technology
Pages	1013-1017
Number of pages	5
Volume	57-2
Publication status	Published - 1995
Event	Proceedings of the 57th Annual American Power Conference. Part 1 (of 3) - Chicago, IL, USA Duration: Apr 18 1995 → Apr 20 1995

Other

Other	Proceedings of the 57th Annual American Power Conference. Part 1 (of 3)
City	Chicago, IL, USA
Period	4/18/95 → 4/20/95

ASJC Scopus subject areas

Nuclear Energy and Engineering
Electrical and Electronic Engineering
Mechanical Engineering

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title = "Application of financial options theory to electric utility decision making in integrated resource planning and maintenance shutdowns",

abstract = "Increased competition in wholesale power generation will allow electric utilities to use financial models to improve their decision making. This competition will result in the creation of electricity spot, futures, and forward markets, which will provide necessary information for utility executives to used advance financial tools, such as random walk models and options theory. These models will allow executives to place a value on risk. Once this value is known, executives can determine how best to manage that risk, whether by entering into financial transactions, adjusting their operational and planning decisions, or both.",

author = "Frank Felder",

year = "1995",

language = "English",

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pages = "1013--1017",

editor = "Anon",

booktitle = "Proceedings of the American Power Conference",

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AB - Increased competition in wholesale power generation will allow electric utilities to use financial models to improve their decision making. This competition will result in the creation of electricity spot, futures, and forward markets, which will provide necessary information for utility executives to used advance financial tools, such as random walk models and options theory. These models will allow executives to place a value on risk. Once this value is known, executives can determine how best to manage that risk, whether by entering into financial transactions, adjusting their operational and planning decisions, or both.

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