ON Monday, I had the opportunity to host a roundtable interview with John Knorring and Carlos Korten, who are, respectively, the CEO and president of Green Tiger Markets , the operator of the electricity forwards market that now encompasses the equivalent of about half of the Philippines' installed generation capacity, and about a third of its electricity demand.
Thus, to manage my own monthly budget, I have to add a 'risk premium' to what my estimate of my electric bill will be, or in other words, set aside an extra amount that I could put to other good use, just in case my bill is higher than I think it will be. With conventional power supply agreements or purchasing power from the spot market, electricity distributors also have to add a risk premium, and to some extent, so do generators.