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To: russwinter who wrote (62548)	1/7/2001 9:16:50 PM
From: goldsheet	Read Replies (1) \| Respond to of 116753

> Maybe the damage to the utilities would have successfully passed on to some institutional counterparty if they hedged? No, they would have bought fixed rate forward contracts directly from power generators and would have been able to more accurately predict their future costs. Duke Energy wanted to offer SDG&E all the power they need at 5 cents / kwhr, but could not do so due to the way the law was written. At 5 cents, customers would have been OK and Duke and SDG&E would have made money. As it is, the customers are protected by te CPUC, Duke is selling for whatever the market will bear, and SDGE is now buying power at 30 cents wholesale and selling it 6.5 cents retail - great business !