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Law & Lawyers

People (March 15, 2002)

E2I appointed Richard H. Counihan as vice president of research programs. The MAPP management committee elected its executive committee members. The Energy Distribution Group of NiSource Inc., recently announced a management realignment. And others ...
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Politically Inelastic?

Electric pricing issues are hard to overcome.

Do politicians really mean what they say when they call for competitive markets in electricity at the wholesale and retail levels? Rivals of California Gov. Gray Davis champion competitive electric markets. But what if, after elections, California markets are then fixed (with unanimous consent), and prices continue to be high? Will that politician still stand behind competitive markets?
Byline: 

Richard Stavros

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So, You Want to be a Retail Energy Marketer?

Retail energy markets entail a unique set of risk management challenges.

As the march of retail competition, although slower, continues to move on the country, energy companies are finding they must be much more agile at managing the risks. A discussion of what energy suppliers ought to know.
Byline: 

David A. Foti and Martin F. Nellius III

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The Commission: The Market's Eye-in-the-Sky?

FERC's plan to expand into energy market-monitoring faces many challenges.

The Federal Energy Regulatory Commission is positioning itself to be the preeminent energy market cop. The commission will have many challenges before it becomes successful in policing market abusers.
Byline: 

David O. Jermain

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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.
Byline: 

David A. Foti and Martin F. Nellius III

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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.
Byline: 

David A. Foti and Martin F. Nellius III

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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.
Byline: 

Richard Stavros

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Crawling from the Wreckage

Can California’s energy market be salvaged?

The whole world watched the California energy market debacle. Now, economists talk about what it would take to rebuild California into a truly competitive power market.
Byline: 

Arthur O’Donnell

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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.
Byline: 

Jennifer Alvey

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