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clock Created with Sketch. 21/02/17
16:42
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Originally posted by Strawman68
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Brumbypat - I think you might have got the wrong end of the stick so to speak. EPW as per their announcement is hoping that the value of the LRECS goes down in the next 3 years so that they can then go out and purchase them cheaply and hand them to the regulator to get their penalty back (assuming govt has money - interesting but if that happens it also means ERM will pay $37m less tax in the future 3 years which means an impact on franking credits doesn't it - this seems like a short term fix without regard to long term issues)... EPW are not betting on the LRECS getting more valuable, in fact there is a cap on the price. If the price goes above $92.86 then every retailer will choose to pay the penalty which is cheaper. EPW are betting on the price going down for whatever reason. This assumes that there will be more supply than demand and hence prices drop. Unless the rules change, there is a legislated cap on the price of certificates and they will not go anywhere to $92.86 or above.
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Mate you sound like you probably know what you're talking about, but why would EPW pay a cash penalty to hold onto a commodity (their current LG certificates) and hope that the price goes down?
