Forum Archive Index - June 2001

["Jeff Smith" <jc.smith@waikato.ac.nz>]

Hi Michael

> I had thought that a cold winter plus full hydro lakes equals good
business for CEN.  regards  Michael

My understanding is that Contact uses spot prices for wholesale electricity,
similar to the way gold mining companies spot the price of gold before it is
mined. Therefore as I see it, current and future climatic and hydrological
status might be good or bad, depending on how smart Contact has been in
spotting their wholesale prices.

I recall CEN's last annual report included a spiel by a guy called Simon
Neill that explains it in greater detail (ie. check it out ... don't just
take my word for it!).

I agree that cold winter and good storage in the hydro lakes might be good
for CEN, but when it comes to putting money on the line, personally I'd be
careful about using broad assumptions without further investigation.

Hope that has helped   :-)
Jeff


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