The IPE Electricity futures contract will trade on the IPE’s electronic energy trading system (ETS II), alongside the IPE’s successful Natural Gas futures contract. This will create the UK’s first integrated Utilities marketplace.
The first contract month for Electricity futures will be May 2001, offering traders the opportunity to manage their price risk exposure for the new physical electricity contract year starting in April.
The contract will be cleared by the London Clearing House, who will act as central counterparty to all trades, offering security of the contract and maintaining anonymity for traders at all times. Margin offsets with Natural Gas futures will be considered once sufficient price history has built up.
The Electricity futures contract will be a baseload contract consisting of Daily, Balance of the Month, Monthly, Quarterly and Seasonal contracts and will trade between the hours of 09.30 and 17.00 hours each business day. IPE customers will be able to act as an Energy Contract Volume Notification Agent (ECVNA) themselves or appoint a third party ECVNA if they wish.
The IPE aims to be extremely competitive in its fees, and has set the trading fees at a level equivalent to 0.1p/MWh. The fee for a monthly contract will be 72p per lot side, and for a daily 2.5p per lot side. Over 30 current Natural Gas ETS II users are ready to commence trading the contract.
Isabella Kurek-Smith, Head of IPE Utility Markets, said, "We are delighted to be offering our Members and the industry an Electricity futures contract, which will provide risk management opportunities under NETA, and will complement our successful Natural Gas contract. We are confident that our competitive fee structure, together with our regulated and secure trading environment will be a great benefit to participants in the converging utilities marketplace."
