PHILADELPHIA -- May 21, 2002 -- As a hedge against unplanned outages over the coming summer months, Akron, Ohio-based FirstEnergy Corp. has again selected PowerBacker Replacement Power Insurance from ACE USA Power Products. In the event of an unscheduled loss of generating capacity, FirstEnergy's PowerBacker policy will protect the company against the financial consequences of increased replacement power costs.
"PowerBacker provides us with the flexibility we need. Each year, the coverage can be modified to meet our changing specifications," said Joe Spencer, risk manager, FirstEnergy.
PowerBacker Replacement Power Insurance is protection designed to be a flexible and efficient risk management tool for participants in unregulated markets such as generators, buyers, traders and marketers. PowerBacker provides a bridge between the physical exposures of unplanned outages and the financial exposures of volatile electricity spot markets. Using a two-trigger policy, it responds only when high market prices and an unplanned outage overlap.
"First Energy is a leader in providing innovative risk management solutions, protecting its customers and shareholders from situations which could impact their rates and earnings," said Patricia Goudarzi, senior vice president of ACE Power Products. "Although market volatility appears to have dampened somewhat in the Midwest, there is still the potential for severe conditions, particularly if large-scale outages occur."
ACE USA Power Products is uniquely positioned to meet the evolving risk management needs of the utility industry. It developed the concept of short-term outage protection with its first PowerBacker policy and launched the second generation of that concept with PowerBacker system protection in 2000. The company has insured more than 100,000 megawatts of generated power in the industry, to date.
For more information, contact ACE USA Power Products at (800) 356-2827 or contact your insurance broker.
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ACE USA, headquartered in Philadelphia, is the U.S.-based operating division of the ACE Group of Companies, headed by ACE Limited (NYSE: ACE). ACE USA provides insurance products and services through the U.S. operating subsidiaries. ACE USA is rated "A" (Excellent) by A.M. Best and "A+" (Strong) by Standard & Poor's. The ACE Group of Companies provides insurance and reinsurance for a diverse group of clients around the world. Additional information can be found at
www.ace-ina.com.