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To: flatsville who wrote (58712)	1/17/2001 2:53:09 PM
From: Mark Adams	Read Replies (2) \| Respond to of 436258

Right, I'd read these past posts, but it helps to clear the thinking to see them again. The IPP's would like to claim that the steady state demand crossed a threshold requiring the use of high cost peaking capacity on a near continous basis, hence the high prices during off peak hours. I don't buy it. The oglipoly/gouging theory does hold some water. But it also needs to consider that 15 cent cost based on higher NatGas. What is overlooked, is that long term contracts at 5.5 cents to buy power that costs 15 cents to generate aren't going to fly. NatGas isn't going back to $2.5/mcf next summer, and I doubt it will ever go back to those levels. I can see Gov Davis wanting to secure power at lower costs, and the IPP position that they need 7 cent power (assuming that in the future lower cost sources can come online to recover their initial loss leader). That is a wide gap, one that I hope is bridged. In reality I don't see how the consumer can expect to pay less than 7-8 cents, or more than the currently approved temporary rates, given the generation costs. I understand that the actual cost born by the consumer is higher as a result of the add on for transmission, billing overhead etc. I had read that the typical consumer could expect a $5 increase on a $54 electric bill. If this is the case, it's hard for me to generate much sympathy for CA consumers, as my own bill is slated to go up 20% due to higher NatGas (SW Washington) and I pay close to that in the winter time living a fairly frugal (energy wise) lifestyle.