cash flow

Utility Valuation: Shedding Light on the Black Box

Experts debate how energy companies should be valued in the wake of electric restructuring and Enron.

Credit downgrades, bankruptcy, and investor backlash against energy companies has exposed how inadequate the valuation of energy companies is. Experts debate just how to value the industry.

The Doomsday Scenario

Debt + secret triggers = another Enron.

Much the same way that bankers used to worry about a “run on the bank,” where there is an overwhelming demand for liquidity that causes a solvent bank to fail, so should energy companies be worried that their use of material adverse change (MAC) clauses might trigger an overwhelming demand for liquidity that causes a once solvent energy company to fail. Of course, the banks now have the Fed to protect the financial system from a liquidity crisis. No such luck for the energy industry.

Going Global: The Top 10 Risks

What utilities ought to know before doing business overseas.

An investigation into the top 10 risks of foreign investment shows the curses and the blessings of wanting to be a global utility.

Energy Trading & Marketing: The Evolution of the Deal

Energy traders and risk managers reengineered their business dealings to manage against unexpected political and financial risks posed by California and Enron in 2001.

The rules of energy market survival changed forever in 2001. California and Enron were both humbled by gyrating prices and blackouts in the Golden State, and financial misadventure dethroned the once-crowned king of energy trading. These twin events sent shockwaves through the very foundation of the energy trading and risk management establishment.

Natural Gas Hedging: A Primer for Utilities and Regulators

What commissions need to learn. <br>What LDCs should already know.

Natural Gas Hedging: A Primer for Utilities and Regulators



 

What commissions need to learn.
What LDCs should already know.

The facts are now in. If utilities had hedged their natural gas purchases during the 1990s, they could have earned windfalls for those they serve, given the wild price gyrations of the past decade (). Yet few if any households or businesses saw any windfall, because few utilities were engaged in futures and other derivatives markets.

PUCs have yet to factor in higher risk for deregulation

PUCs have yet to factor in higher risk for deregulation.

(December, 2000) Here are the results of our annual survey of authorized rates of return on common equity (ROE) for state-regulated energy utilities. This year's survey covers ROE determinations by state regulatory commissions during the period Oct. 1, 1999 through Sept. 30, 2000.