It seems to me that a so called escalator of 2 % (I guess to cover inflation) is actually a method to get power at a cheaper rate going forward, as inflation generally runs much higher on average.
You say with 2 % yearly increase , the 0.25 cent per kwh would be 0.5 cents in 2012. Industrial rates for power in the US has increased about 7 fold since this CF plant started to present time whereas the 0.25 to .5 increase in only a 2.5 fold increase.
And as to the the risk being engineered out (by a basket of rates 90 % tied to HQ rates), this is a scheme that actually engineers in risks, not engineering out. This is a Alice in Wonderland proposition, full of holes, and mainly ignoring the value of export market prices for electricity.
Say it ain't so, Joe.
It seems to me that a so called escalator of 2 % (I guess to cover inflation) is actually a method to get power at a cheaper rate going forward, as inflation generally runs much higher on average.
You say with 2 % yearly increase , the 0.25 cent per kwh would be 0.5 cents in 2012. Industrial rates for power in the US has increased about 7 fold since this CF plant started to present time whereas the 0.25 to .5 increase in only a 2.5 fold increase.
And as to the the risk being engineered out (by a basket of rates 90 % tied to HQ rates), this is a scheme that actually engineers in risks, not engineering out. This is a Alice in Wonderland proposition, full of holes, and mainly ignoring the value of export market prices for electricity.
It's math.
Basic math.
They are deluded.