I wish I were as smart as Firefly.

Because she is, clearly, a mathemagician. I can't claim credit for any of this because she did all the work for me. She couldn't get to it last night, so I am posting her brilliant (inside joke) thoughts for her.

You will recall that the City of Great Falls recently authorized up to $181,500.00 in spending to one of its consulting engineers to sell its share of the power from the Highwood Generating Station coal plant. This 'marketing cost' could go as high as $400,000.00 according to Coleen Balzarini, the City's Fiscal Services Director and Executive Director of Electric City Power.

On top of that, we recently saw that the City's share of power from the plant will be reduced by 40% to about 37-39 MW of power. (Since we learned on Friday, May 11, 2007, about the City's reduction in share, and because Ms. Balzarini made her remarks on Monday, May 7, one has to assume that she knew about the reduction in share when she bandied about her $400,000.00 figure. About the only thing worse than her knowing that the reduction was coming and not telling the ECP Board of Directors would be...if she didn't know.)

So, let's run the numbers. We presently use or sell about 25 MW of power. Our share will be 37 MW. Thus, we need help 'marketing' 12 MW of power.

At $103,500.00, that means we (you and me, the taxpayers) will be spending about $8,625.00 per MW to sell this power. Assuming our customers sign up to buy their power from us for the full life of the plant of roughly 35 years, that means we are spending $246.00 per year per MW to sell this power. Hmmm.

At $400,000.00, though, that means we'll be spending about $33,333.00 per MW to sell this power. That translates to about $952.00 per year per MW to sell this power. Not exactly flying off the shelf, is it?

This makes you wonder just how cheap this power really will be when compared to the expected market rates.

1 comment:

Anonymous said...

Was this the "no risk" part of the plan?