Tolling Arrangements
A tolling arrangement is an optimal way to lay off the fuel price risk and power market risk associated with power generation.
Here's how it works:
Mirant will pay you a fixed fee (and a small, variable maintenance charge) for the right to run and dispatch your generation facility. We manage all fuel purchases as well as the marketing of the output. This type of arrangement is similar to a lease of your generation facility over a period of time.
The fixed payment that Mirant can offer is attractive because our trading and marketing resources allow us to capitalize on the flexibility of the facility to reduce fuel costs and maximize revenues. We share that value with you through the fixed fee, while significantly reducing your risk exposure. To accomplish your business goals, terms of tolling arrangements are flexible.
Conversely, Mirant also sells tolling agreements for the right to dispatch its own plants in return for a fixed fee. Similar to the benefits we offer our customers, Mirant also looks to hedge the forward price risk for its own generation. One of the hedging methods we employ is through tolling arrangements.