Coverage Available to NEIL Members at Low Net Cost
ACE Power Products and NEIL have announced a joint initiative to provide indemnification for replacement power cost to NEIL Members in the event of short duration unplanned outages. By pooling purchasing power, coverage will be available immediately at terms and prices more favorable than those in the open market.
NEIL and ACE have developed a custom policy form and rating structure for financial exposure on nuclear power plants. Underwriting support and program capacity will be provided jointly by ACE and NEIL.
Advises Quentin Jackson, President & CEO of Nuclear Electric Insurance Limited, "Over the course of the last few years, we have actively been looking for ways to expand NEIL's value to its Members as the utility industry faces new exposures resulting from deregulation and consolidation. This new program is one area where we can provide that added value to our Membership."
"NEIL Members are vulnerable to financial loss from the cost for replacement power during short term unplanned nuclear plant outages," reports Ed Zaccaria, senior vice president of ACE Power Products. "Under certain conditions a unit failure can have catastrophic consequences to the business -- the cost of replacement power could exceed $150 million for a 1000 megawatt plant that is out for just three days. We are announcing the product now to help market participants plan for summer 2001."
The pooling structure promotes risk sharing among the Membership of NEIL to achieve lower premiums, stable capacity, expanded coverage and dividend opportunities. It will also enable the asset owners to sell power forward with greater confidence. As an alternative to dollar funding of the pool layer, Members may elect a "megawatt option" whereby contributions will be valued in terms of a fixed number of megawatts. By setting aside megawatts instead of dollars, contributions will be lower when Members' generation revenues are lower. Pool layer capacity will be $50 million per plant and any NEIL Member who buys or sells nuclear power is eligible for coverage.
Excess coverage, up to $200 million, will be available for Members who need coverage above the $50 million pool layer. Single units or portfolios of plants can be included in the program and pricing will reflect individual unit exposures based on historical unit reliability, age, design and regional energy costs. Selective NEIL underwriting credits will be applied.
ACE Power Products created replacement power insurance (PowerBacker
SM
). NEIL is the leading provider of property and accidental outage insurance for the nuclear power industry.
For more information, contact ACE Power Products at 1-800-356-2827 or NEIL at 302-888-3000 or contact your broker.
ACE USA, headquartered in Philadelphia, is the U.S.-based operating division of the ACE Group of Companies, headed by ACE Limited (NYSE: ACL). ACE USA provides insurance products and services through the U.S. operating subsidiaries. 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.
NEIL, headquartered in Wilmington, DE is the largest worldwide provider of property and accidental outage insurance to the nuclear power industry. Access to European utilities is provided through Overseas NEIL, (ONEIL), the Company's Irish subsidiary. Further information is available for NEIL by calling 302-888-3000 and for ONEIL by calling 353-1-637-5351.