NYMEX Western Electricity Margins To Be Split Along With Contract Unit

The New York Mercantile Exchange has announced that it would halve the margins on its California-Oregon border and Palo Verde electricity futures contracts when the contract unit is split at the close of business on Monday, December 6. The margins will go to $1,000 from $2,000 for clearing members; $1,100 from $2,200 for members; and $1,350 from $2,700 for customers. At the start of business that day, the contract unit for the Exchange's western electricity futures contracts will be split from 864 megawatt hours to 432 and each outstanding futures and options contract will be converted into two contracts, reflecting the new rules. The contracts will be delivered at a rate of one megawatt per hour instead of two.