Well, we no longer have idle plant, but restructuring has not yet lowered prices in California. Pennsylvania, which has seen prices drop with restructuring, notes that California has done nothing for almost five years to secure new power, and no longer has any reserves. Pennsylvania and other states believe that the key to stable prices is to have supply and demand balanced. New York, which has faced power shortages, has said that it is crazy for California to purchase almost all its power on spot markets. New York notes that medium term contracts at market rates can protect customers from volatile prices and keep bills stable, and they have done so in New York.
Bilateral contracts can protect consumers against the volatility in the dysfunctional market.
New Yorkers see their approach as simple, not theoretical. Let s take some of the ratepayers demand out of the PX market. Conducting our review of these individual deals in hindsight and then subsequently disallowing contract costs, the approach of the other options we consider today, doesn t guarantee ratepayers more benefits or lower costs. It is a formula for loosing deals. In addition, bilateral contracts can help those who are building power to secure financing sooner.