Electricity and Natural Gas Price Forecasts Annual Subscriptions

Statement of Work for Electricity and Natural Gas Price Forecasts Electricity and natural gas price forecasts, known in the industry as forward curves, are a useful tool for all parts of an electric utility, including front, mid, and back office, in important applications such as validating internal price curves used in mark-to-mark accounting. Forward curves can also be used in numerous analytical applications such as counterparty credit risk, value-at-risk (VAR), potential future market exposure and various procurement decisions. In addition, a forward curve can be derived to reflect the degree of correlation between forward electric prices and forward gas prices which are known as electricity/natural gas correlation curves. Forward curves represent the market's current valuation for the standard volumes for electricity or natural gas over a predetermined interval of days (e.g., day, month, seasonal block, year, etc.) and for a specific interval of time (e.g., peak hours, off-peak hours, or combination of the two). Forward prices are not intended to be - predictive and don't represent a forecast of what electricity or natural gas will be worth in the future - cash markets. WAPA seeks offers from vendors to provide the electricity and natural gas forward curves associated with its Risk Management Program objective. The requirements associated with such forward curves include, but are not limited to, the following: 1. Publication of the following forward curves for each business day: electricity, natural gas, and electricity/natural gas correlation. 2. Preference will be given to prospective vendors which can demonstrate an extensive history of publication of such forward curves 3. The required pricing locations will be Henry Hub and PG&E City Gate for natural gas and NP15 and California-Oregon Border (COB) for electricity. 4. The forward curves must include prices for a minimum duration of six years, beginning from the upcoming month (prompt month) 5. The forward curves must have the granularity to be presented for the minimum 6 year duration specified above, on an individual monthly, quarterly, and calendar year basis. 6. To the extent possible, the forward curves should be based on actual market transactions where liquidity permits and such market information should be cross-checked and validated to ensure the accuracy of the data. 7. In illiquid markets, and in instances in which there is an absence of market pricing data, sophisticated mathematical techniques should be used to forecast market pricing. 8. All forward curve data should be made available on an SFTP site via excel or CSV so that it can be downloaded and analyzed by WAPA staff. Programmatic interfaces, such as web services, are also available. 9. WAPA prefers to acquire this service on a multi-year basis at the lowest cost possible. 10. If vendor restores their server from backup, or change password, vendor should provide password to WAPA contact so that SFTP script can be updated timely.