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Pastimes : The California Energy Crisis - Information & Forum -- Ignore unavailable to you. Want to Upgrade?

To: Bearcatbob who wrote (365)	6/1/2001 10:56:25 PM
From: Zeuspaul	Read Replies (2) \| Respond to of 1715

Market oriented ventures frequently use long term contracts to SECURE supplies at predictable costs. And so do non market oriented ventures. Long term contracts remove juice from the market. Obviously even market ventures can see the benefits of buying juice outside a market in a stable environment. So if a REGULATION prohibits or prohibited long term contracts it was/is a DUMB REGULATION. Agreed and that is my point. If the market is the best way to work the electric energy supplies then prohibiting long term contracts would be the way to go. California is in a market situation more than any other state. Obviously the market system isn't working out to well for California. It is a rather good deal for the independent power producers...at least in the current situation. A little rain in the northwest and California's energy deregulation scheme may have been viewed as a success. Utilities were making big bucks and prices were lower. But markets swing both ways...that's just the way it is. What we are seeing in California is a natural market event. Left unattended it can take years to correct. Why would a power producer significantly increase capacity if he thinks it may rain next year? He can make just as much money or more by maintaining current supply and selling at a higher price. Zeuspaul