Forum Archive Index - June 2001

["Sam McGregor" <sammac108@hotmail.com>]

IMHO Contact Energy will not benefit from the “high” spot prices at the 
moment for two reasons: 1.  The are also an electricity retailer, so they 
will have to pay the high prices at the other end 2.  Their lake and river 
levels are presently low, with forecasts for them remaining so over the 
entire winter.  They don’t have  a lot of the cheap hydro power/storage 
anyway, most of CEN’s electricity is thermal.

Basically, IMHO Meridian Energy controls the market as they control most of 
the country’s hydro storage. Spring flows can be elevated through snowmelt, 
but this is a minimal gain not worth worrying about.  If it rains, 
Meridian’s lakes will also rise, thereby bringing prices down.  Either way, 
Contact can’t win.  Contact has never been able to produce the goods growth 
or profit-wise, so I would not advise anybody to buy them at any price.

Disc:  Sold CEN recently, never to buy again

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