How Might a Pool Operator Use Futures Contracts to Manage the Cost Volatility of Electricity?

A pool operator, who pays for electricity in fiat currency, can use electricity futures contracts to lock in a predictable price for their future power consumption. By buying these contracts, they hedge against the risk of rising electricity prices, which is a major operational cost.

This stabilizes their expense side, allowing for more accurate profit margin forecasting, regardless of short-term energy market fluctuations.