Breakdown of Tariff Risk
Explaining timing risks and magnitude risks.
Tariff risk is that risk which the marketer incurs downstream of the uplift. This risk can be broken into Timing Risk (I - III) and Magnitude Risk (IV-VI) as illustrated below.
Law & Lawyers
Let's Be Rational About Hydrogen as a Vehicular Fuel
A response to “Forgetting Someone, Mr. Secretary?” Frontlines, Feb 1, 2002.
Mr. Stavros seems to fall into the same trap as so many of the major car manufacturers in assuming the need for a prohibitively costly infrastructure to supply this hydrogen when one already exists that offers by far the cheapest and environmentally vastly superior option—the natural gas transmission and distribution system.
Bid-Offer Spreads: A Hedging Device
How exactly does a retail energy marketer use the spread as a hedging device?
Bid-Offer spread represents the profit a market-maker or intermediary demands for creating liquidity. This spread is composed of the intermediary’s variable cost per deal plus any liquidity risk they may bear.
Enron C&I Customers Paying Twice
Public Utilities Fortnightly and POWERdat®
Some large commercial and industrial customers who had signed energy contracts with the now-bankrupt Enron are forced to pay their utility bills a second time. "We're looking at these bills and saying, 'Hold on a minute,'" said one corporate energy manager.
FERC At 25
A leaner bureaucracy sharpens its market-monitoring tools.
FERC turns 25 this year. With Enron’s collapse and California’s unraveled electric restructuring scheme, the silver anniversary reminiscing may be slightly muted.
Wag the Dog
Pack journalists feed off PG&E letter.
Was Pacific Gas and Electric’s recent customer mailing of a dog-bite letter and meter-reading schedule a selfless attempt to protect its employees from vicious canines? Or was the notice to dog owners a catty move to get the California press off the scent of Pacific Gas and Electric’s bankruptcy proceedings?
Revisiting California
Market power after two years.
Armed with new data, a well-known economist discusses what really happened.
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.
People (April 1, 2002)
Edward F. Godfrey has been named to the Unitil board of directors. CH Energy Group appointed Steven V. Lant COO. Susan Glasmann and Alan Allred were named senior vice presidents for Questar Regulated Services, a subsidiary of Questar Corp. And others ...
Bush's Cloudy Skies?
Experts debate whether Bush’s Clear Skies plan on power plant emissions clears the way for better emissions technologies.
The Bush administration has yet to deliver a detailed plan of its Clear Skies program-no legislation has been introduced. Even without many details, there's plenty to argue about. At the top of the list is whether a cap-and-trade program will truly reduce emissions more than the current command-and-control regime.