From the past, Feb. 2013 we repeat the entire blog;
At the time we figured a target of about $10.50 would be reasonable. Today we got to within 20 cents of that but it took a lot longer than we expected. In any event , at that time, we brought up the distinct possibility of “stranded costs”. For those of you who do not know what that is, I suggest you look at your Hydro bill. Euphemistically they refer to the same thing as “legacy costs”, which is to say that they screwed up but still get to charge you. COS is not a government entity with the monopoly privileges attached, instead shareholders pay. And pay they will as this has further to go.
In the big picture – this is a semi-log chart - we are in wave 3 of C, normally the most powerful part. 3 can go lower as if we use the gap in the middle approach it would target about $7. From that point on we would still need 4 and 5 of C to complete the whole thing. Or alternatively, another b and c if we are in fact looking at a double zig-zag. The realities of being a marginal producer in an environment where demand is lagging and supply has increased dramatically are beginning to come home to roost.