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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Don Lloyd who wrote (7438)	8/20/2001 12:46:11 AM
From: Maurice Winn	Read Replies (3) \| Respond to of 74559

True Don, but in the long run, we do have to include the capital costs and capacity because those are required for peak loads and if everyone uses DishDrawers instead of the extravagant, environmentally destructive wash-by-hand method, the demand at peaks and other times will be lower. So, fewer power stations will be built and less capacity will be available. It's not just the current variable usage which matters, it's the long run peaks and normal usages and the statistical variations in those which determine whether a new power station will be built. Not to mention the prices which are allowed to be charged. In California, if prices had been allowed to rise to what the market would bear, there would not have been blackouts, production would have been saved and people would be happier. Total capacity could be reduced as the peak demands would be reduced if prices could rise to what the market would bear. In New Zealand, we are doing exactly the same stupid regulatory tricks. When I turn on a heater, the power costs me about half or a third of what it costs my supplier. They are losing their shirt! This absurd situation has arisen because of the ham-fisted attempt at 'deregulation' which was carried out half a decade ago. So now, we are going to run out of electricity next winter. We know that because a great deal of our electricity supplies are from hydroelectric dams and hydrological science is pretty good these days. So while it's true that if an additional generator isn't needed, then the infrastructure cost shouldn't be included, but statistically every demand does cause a need for increased infrastructure [unless the usage is always off-peak]. I bet CB didn't realize how much harm is done by her hand-washing and how complicated it is. As oil salesmen [in Canada in the 1970s], we used to moan that the accountants would include fixed costs in our pricing although we were bidding on a one year contract which would only use up spare capacity which was sitting there anyway. They didn't care and the price included the capacity! Usually we didn't get the business. The moral of the story is that everyone should borrow Uncle Al's freshly printed dollars, log on to Fisher and Paykel and order a DishDrawer. That will save the Brazilian rain forests, save the oil, save the planet, save money, save the USA and world from financial collapse, save the poor in New Zealand from destitution, save detergent, electricity and keep everyone's hands smooth, uncracked and beautiful, not to mention more resistant to skin cancer from sunlight [skin oils absorb uv]. Mqurice