Loading the page.
All sectors
Energy
A facility’s power bill depends on its location and hours of use, which can differ from the hub price it hedges.
- Benchmark
- ERCOT North Hub power
- Carried by the business
- Price at the facility node
- Settles on
- ERCOT settlement point prices
Illustrative exampleA plant settling at a West Texas node
This hypothetical example uses public events and does not describe a client.
1
- 01The business
The plant hedges power at ERCOT North Hub, but its bill is set at its own settlement point.
- 02What happens
During summer peak hours, transmission limits can push the node price far above the hub price used to settle the hedge.
- 03What the contract names
The contract names the node and the hub in ERCOT real-time prices, a June to September window in peak hours, and a strike on the spread between them.
- 04How it pays
If the monthly average spread passes the strike, the contract pays a third of its maximum, rising to the full amount $20 per MWh higher.
Share of the maximum it pays
- 33%At the strike
- 67%+$10 per MWh
- 100%+$20 per MWh
Observed dataBenchmark history
These prices provide market context for the worked example.
2
Public benchmark
2.76USD per MMBtu
+0.18 (+7.0%) over 3 months
U.S. Energy Information Administration, via FRED. Source checked Oct 31, 7:26 PM UTC.
Henry Hub natural gas: 2.58 on Jul 29, 2026, 2.76 on Oct 27, 2026. Low 2.52 on Oct 26, 2026, high 3.30 on Oct 15, 2026. Values in USD per MMBtu.
Henry Hub gas spot prices provide fuel-cost context. They are not electricity prices at a hub or facility node.
View source dataIllustrative exampleWhere the hedge stops
This diagram illustrates how a business cost can move away from a benchmark; it does not show observed prices.
3
These curves illustrate a possible pattern and do not represent observed prices.
Illustrative drawing, not market data. Price at the facility node against ERCOT North Hub power; the shaded gap between them is the spread. A faint band marks the window a contract would cover.
CoverageRisks we can structure
Contracts can address the following risks.
4
- 01Hub-to-node congestion
- 02Gas basis and pipeline curtailment
- 03Load in the hours that set the bill
- 04Heat and freeze at a named station
The processFrom exposure to payment
We start with one business risk and assess whether we can define a contract around it.
5
- 01
Define the exposure
Tell us the event, the place, the period, and what it costs the business.
- 02
Write the terms
Oros names the record, the trigger, the price, the payment, and the limit.
- 03
Find the capital
A counterparty takes the defined risk for a premium, with payment capped in the terms.
- 04
Settle on the record
As calculation agent, Oros applies the terms to the named record and states the result.
Discuss your business risk.
In a thirty-minute call, we can discuss what could change, where and when, and what it would cost your business.