The other day I heard a short news item on National Public Radio that made me stop and think. The item ran something like this: "Maxwell House has announced it will cut the price of its loose ground coffee to reflect a drop in the coffee futures market several months out."
Wasn't that easy? Call it integrated resource planning in the espresso lane. Note what Maxwell House did not do. It did not solicit a demand forecast or run the PROMOD computer model. I bet the company didn't pay for an interest rate analysis or an avoided cost study, either. Or figure out the correlation between coffee consumption and economic growth.
Maxwell House inhabits a commodity market. Natural gas companies (pipelines, distributors, marketers) live there too. They're learning all about hedging (em the long and short of it. Eventually the electric industry will have to face the music. Caffeine all around.
Not Worth a Dime
With all the holiday rush at the end of last year, you may not have noticed: In mid-December the Federal Energy Regulatory Commission (FERC) issued its long-awaited policy statement on the decommissioning of hydroelectric dams. See, Project Decommissioning at Relicensing, Dkt. No. RM93-23-000, Dec. 14, 1994, 69 FERC 61,336. But they didn't fail to notice over at the American Public Power Association (APPA) or the National Hydropower Association (NHA), which both oppose the FERC action.