Re: max 10 year term – what is the rationale for the maximum term of 10 years?
Even if there is no assurance that longer term contracts would not guarantee least cost, the 10 year max
term will guarantee shorter recovery period by power suppliers. Will this not result in higher electricity
prices?
Will it not dissuade investors or new entrant since they will not be able to take out loan with a 10-year
contract only, and this will result in tightening of the supply which is turn make prices higher for
consumers?
Since power generation companies are allowed to pass on expenses or cost of investment to consumers,
will not the shortened time period increase the offered rates of generation companies and translate to
higher electricity prices? Similar to bank loan, the shorter the repayment period, the higher the monthly
amortization. Does this mean the consumers need to pay higher generation rates for the succeeding
years?