Specifically, the team added over $300 million in profits from wholesale power marketing activities, including direct full requirements energy and capacity sales to municipal power companies, neighboring utilities, and other physical counterparties. The team also added over $100 million of value through a long-term firm transmission purchase from a neighboring utility in order to secure valuable transmission rights from PJM and successfully manage substantial price congestion across the Allegheny portfolio. Over $65 million of value was garnered through the active management of a legacy Kern River natural gas transportation contract in the West. Finally, a retail power marketing platform was launched in 2010 to hedge the Allegheny generation portfolio, while adding incremental profit margins. The platform was profitable in the first year of operation, recouping all incremental back-office costs in addition to obtaining higher margins for the fleet of assets
Power Plant Commercial Operations
IEP’s leadership directed commercial operations for Allegheny Energy Supply’s fleet of unregulated generating assets in the PJM, MISO, and SERC markets between 2002 and 2011. The fleet included coal-fired supercritical and subcritical generation, natural gas combined cycle and peaking generation, oil-fired peaking generation, pumped-storage hydro generation, and run-of-river hydro generation. Over 30 million MWh of generation were sold each year and $2 billion of average annual operating revenues were under commercial management. As part of this effort, long-term business plans and commodity hedging strategies were designed and implemented in accordance with corporate objectives. The scope of work included developing and implementing PJM capacity offer strategies for the unregulated Allegheny Energy Supply portfolio. The asset-backed commercial organization delivered over $465 million in incremental value over and above the power plant profits.