Kemper Insurance Companies, Aquila Inc. and its wholly owned affiliate Aquila Re Ltd. have joined to market and underwrite products that protect buyers or sellers of electric power from unexpected spikes in the price of replacement power during unplanned generating unit outages. According to the companies, an unplanned generator outage can have a significant financial impact if the outage occurs when spot market prices for power are high. Generator owners that have fixed delivery commitments and power users or traders that have agreed to purchase power on a unit contingent basis can be forced into the spot market to purchase replacement power to meet their needs during an unexpected outage. Kemper’s Power Generation Protection was developed to provide insurance that indemnifies customers for the difference between a pre-determined price and the cost for replacement power. Customers can also opt for an alternative that provides physical delivery of replacement power through Aquila. Aquila’s GuaranteedGenerationSM provides customers with a contingent call option for power with physical delivery or financial settlement.
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