"Peter C. McCluskey" wrote:
>
> hal@finney.org (hal@finney.org) writes:
> >The market is a "first price" auction, where suppliers and utility
> >companies offer and bid on electricity at a certain price per
> >megawatt-hour (MWh). With this kind of auction, whatever the highest
> >price is for the last bit of electricity, that price is used for all
> >the electricity sold during that time period. So if some providers are
> >selling for $100/MWh, but that only covers 80% of requirements, and then
> >others are selling enough for $150 to cover 10% more, and then some are
> >selling for $200 to cover the last 10%, everyone pays $200/MWh for all
> >the electricity.
>
> All the power is being priced by the spot market? That seems strange
> and probably foolish. Businesses that are dependent on commodities like
> oil typically insulate themselves from some of the volatility by buying
> a lot of their needs under multi-year fixed price contracts.
The problem is that demand has grown faster than local supply, and local
tree huggers and NIMBYites fight every attempt to build new power
sources. Even the new big windfarms are dealing with rafts of legal
challenges. The greens are trying to intentionally strangle the economy
of the state.
This archive was generated by hypermail 2b30 : Mon May 28 2001 - 09:50:39 MDT