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To: Chuck Schmeling who wrote (14428)	6/14/2000 12:33:00 PM
From: J. M. Blackburn	Read Replies (4) of 15132

Chuck: Good post. I'm an engineer for an electric utility like you. Combined cycle units burning gas are quickly replacing oil plants in the Northeast. We (the company I work for) are currently spending over a Billion dollars to build these units and when they are done, the future for the oil units, due to economics and environmental regulations is limited at best. Forget coal. Several weeks ago we had $6,000 a MW power, unbelievable. Prices are much higher and our friends from the North with all their Hydropower want some of the action and are threatening to not honor their contracts current prices. This change over to gas in the manner in which it has been done is going to bite us eventually but with deregulation and the need to bid power every day; it is hard to go any other way. The other problem is that the gas transmission system can't handle the demand and if you don't have reserved space in the system you may or may not get gas. Reserving space is very risky for older plants with high bids because you may be paying for space that you can't use due to your higher heat rates. The plant I work at had to shift to oil for a day or so last year because we couldn't get gas and the environmentalist went ballistic. This was during a time when we where near a brown out. Within hours the State Senator was calling and hearings where held. These guys have the power to make it very hard for us to build new plants and I doubt we will ever burn oil again at our plant. We even sold most of our oil when prices went higher last winter. We would love to get rid of the liability of having it near the ocean but there is talk of using our one remaining tank to try to make money buying and selling oil. To sum it up, Electricity is going to cost more and supplies are going to be tight for several years or more imho and this is without the recent run up in energy prices. The results of this have not been fully realized yet due to cool weather. All my experience deals with the Northeast but I expect it is the same elsewhere. Jim

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