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Quitetly, Quiggly
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Quitetly, Quiggly
Chapter 1. Once
Joe's Bar and Gril
Stop dancing like We've recently discovered a new method to
reduce our generation cost at this time of year. When gas prices are high,
our monthly generation cost increases even with decreasing actuals because we
still have to buy the gas. To receive the gas at index price, we need to pay
the difference between our contract price and the gas price in order to
receive the gas. Consequently, our actuals go down. The formula for this
new method would be Index Gas price plus any difference between the Index
price and the contract price. This would result in a higher end calculation
each month, but should reduce our exposure to the gas price as compared to
purchasing at Index at the higher volume.
I think we should give this a try. However, I will like to receive the
customer's comments. We have historically been on the hook for this gas
price difference. In addition, as we go through the winter months, we are
typically paid back for the gas that we lose to the index price. Please let
me know what you think.
Thank you,
Lauri A. Adams
Fuel Management
(713) 853-5227