JP Morgan

Enron's Lessons

Are regulators managing market manipulation?

Some will stray from ethical behavior. But markets must be regulated to maintain confidence.

Transactions (January 2014)

Calpine acquires 1,050-MW combined-cycle plant in Texas; Allete buys AES wind farms; NextEra acquires Silver State solar project from First Solar; plus equity and debt deals involving EdF, Emera, First Wind, SunEdison, AEP, NV Energy and others, totaling $2.7 billion.

Transactions (December 2013)

NRG and Sempra acquire Edison Mission assets; Google invests in AES-Riverstone venture; TransAlta acquires NextEra wind farm; plus debt issues from TransCanada, NiSource, Duke, and Southwest Gas totaling $2.4 billion.

Transactions (August 2013)

During the month of June, MidAmerican issued $1 billion in bonds for solar projects in California; PG&E sold $750 million in two tranches; ITC floated bonds totaling $550 million; plus debt issues from Duke, TransCanada, Entergy, and others totaling $4.35 billion.

Transactions (January 2013)

Entergy acquires Kgen gas-fired plants in Arkansas and Mississippi; TransCanada buys BP share of Alberta gas storage facility; PSE acquires Tenaska plant; AEP issues $850 million in debt; Duke units float $650 million in bonds; plus debt issues by NextEra, Southern Company, Entergy, and others totaling nearly $3.2 billion.

Transactions (December 2012)

Entergy Mississippi to spin off its transmission business to ITC; Calpine acquires Bosque Power merchant plant in Texas; WPS acquires Fox Energy plant; E.On buys interest in Magic Valley wind farm; plus bond issues by Nstar, Western Mass. Electric, Texas Eastern Transmission, Alabama Power, and NSP totaling $1.55 billion.

Transactions (November 2012)

Southern Company and Turner purchase SunEdison 30-MW PV plant; PSEG acquires 15-MW PV project from Juwi Solar; Duke issues $650 million in 30-year notes; PSE&G floats $350 million; Sempra and SoCal Gas each issue $350 million in bonds; plus bond issues from ONEOK, Regency Energy, ComEd, Tampa Electric, DTE, and Tucson Electric, totaling $4.8 billion.

Hedging or Betting?

Lacking regulatory oversight, financial hedges turn into risky speculation.

Many utilities engage in hedging to protect customers from price spikes. But unless regulators are involved in crafting and monitoring these programs, they can turn into speculative ventures that put ratepayers at risk — for the benefit of shareholders.