SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Pastimes : The California Energy Crisis - Information & Forum
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Bearcatbob who wrote (235)4/14/2001 1:04:14 AM
From: Angler  Read Replies (2) of 1715
 
The bidding process, I agree, can lead to distortions when the supply does not match the demand.

If one has some surplus to sell, he can try to find the market beginning his bid high searching for an advantage price point. By trial and error, since each day begins a new competitive bidding process with an unstoragable commodity, it would behoove the suppliers to edge their prices higher than lower. Gradually the market results of each days successful bids would not only indicate but create higher prices.

So if there were more sellers than buyers, the turn of the screw would work in reverse. Would it be possible for the State to rule that they would only purchase power at XX$ and then see if any surplus power existed to serve the need thereby retaining some control over the cost? Each day or the end of the previous day couldn't the authorities issue their open end needs for the next day and their "limit price" for bids? If there are no surpluses, all bets are off.

If only one bidder was available, he surely could name his own price. In this case we have only one buyer. As the number of bidders increases, competition increases and the price would adjust. The only other way the suppliers can maximize their advantage is to collude and agree on pricing (fixing) which in any book is illegal. That the Governor will not release and open negotiations could be a poor idea. In privacy the contractors may find it more to their liking in lieu of unknown long term contracts? During this emergency could it be an innocent mistake again on the part of administration?
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News