Leveling of Oil Fuel Prices Through Hedging Practices at the Puerto Rico Electric Power Authority

Abstract

Up to the present, all the discussions since mid 1980's regarding the convenience of leveling fuel costs have been developed on a qualitative basis. This paper will try to provide quantitative information for corporate decisions regarding the main concerns of (1 )What is a convenient leveling oil fuel price level? and (2) What is the level of sales / revenues vs. oil prices at which the Bond Rating Agencies as well as the Authority should start giving considerations?