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To: robnhood who wrote (54373)	1/4/2001 10:41:32 PM
From: yard_man	Respond to of 436258

It's supply and demand for the most part -- suppose gas hits $12/mmbtu and gas generators are the marginal resource -- loads are high -- most innefficient units are being used -- say combustion turbines. They have a heat rate (conversion factor) of about 12 or 13 at most -- so the highest cost is about ~ $12/mmBtu x 12 mmBtu/MWh = $144/MWh. That's a very high number, but the prices charged are considerably higher when there is not enough to go around -- companies start to sell to the highest bidder -- that's how u get 200/Mwh or 500/MWh or 4000/MWh. Make no mistake when somebody is selling at that price they are making a ton on the sale ...