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To: Qout

Doesn’t seem like price would be rising in response to falling demand.


11 posted on 02/21/2014 9:07:47 PM PST by Trod Upon (Every penny given to film and TV media companies goes right into enemy coffers. Starve them out!)
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To: Trod Upon
"Doesn’t seem like price would be rising in response to falling demand."

In a normal competitive business you would expect a price drop.

Utilities are marked by two things, regulatory oversight and high fixed costs. When demand drops, the utility still has the same amount of lines in the field that have to be maintained. The loans payments for plant facilities don't decrease. The only thing that decreases is fuel cost. So I can see where a drop in demand would drive the price up.

The regulatory oversight means that the price doesn't fall, since regulatory bodies hardly ever demand a price reduction. But utilities are always asking for a price increase. If not based on current costs, then based on projections of future demand.

20 posted on 02/21/2014 9:41:09 PM PST by DannyTN
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