Clown-Free Zone... sorry, no clowns allowed Message Board

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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: yard_man who wrote (220673)	2/12/2003 2:07:25 PM
From: reaper	Read Replies (1) of 436258

tip, i don't quite understand one of your statements... <<it simply doesn't run, i.e. no such thing as an energy glut when talking about electric utilities -- only low or high prices. >> there will be no such thing as high prices for years to come, because there is so much generation capacity out there. i mean, its not like they melted the equipment. how long (and how much capital) does it take to put a peaker (is that the right term) back on line? the capital is sunk, so all that matters is marginal cost. so it seems to me there is no reason for spreads (what they can get versus feul costs) to go up, and they very well may even decline. given maintenance capex needs and debt service requirements, its not obvious to me that FREE cash flows might be declining for a while. moreover, when debt REPAYMENT comes due (as opposed to debt service) will any of these guys be able to re-finance, or will they have to come up with the cash to pay the bankers back? i just don't see where capital for divvies come from. Cheers

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