'Full requirements' load-serving contracts are widely used in power markets. With such deals, a load-serving entity (LSE) agrees to provide all the electricity needs of its counterparty at a fixed retail price. End-users favour these contracts because of their price certainty. LSEs, on the other hand, find these deals bring out wider profit margins than the alternatives (Klingler 2006). By offering full requirements load-serving contracts, however, LSEs complicate their risk exposure. When
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