“Buy low and sell high” is the adage for success in the financial markets.  For cooperatives looking to make the best deal for members in the power market, buying low is the key.  If you are shopping for capacity, it is likely you will find that now is the time to “buy low”! 
 

Two factors have combined to drive capacity prices down to levels lower than many thought would be seen again.  First, economic conditions reduced growth below projections that had driven companies to build new capacity.  At the same time, the shakeout in the post-Enron industry has left many lenders with reduced patience to allow the plant owners to ride out the slowdown and wait for better times.  Reduced demand being chased by anxious sellers has created a market that is “hot for buyers”. 

An added factor makes the market a particularly good one for cooperatives.  Lenders to those with plants, both traditional utilities and power marketers, are looking for evidence their money will be repaid.  For this reason, the financial problems in the industry have put a premium on buyers with solid credit.  Cooperatives with a solid record of good business practices and paying the bills have that solid credit – and are much sought-after by sellers, which is making prices even more competitive. 

You don’t know where prices will go in the future, but the expectation is they have nowhere to go but up.  That makes now a good time to “buy low”!

For additional information, contact Elaine Johns at 1-888-999-8840 or e-mail her at elaine.johns@enervision-inc.com.