Even the volatility is volatile. And that can play havoc with hedging.
Jeff Skilling resigned from Enron over a year ago-after power prices in markets serving California had fallen 90 percent in three months.
But in July, Bank of America won approval from the Treasury Department to offer cash-settled electricity derivatives-with a former Enron regional director at the head of the desk.
So what has changed, and what hasn't?
How Competitive Metering Has Failed
1 Also cited as contributing factors are the lack of long-term contracting, operating problems in the ISO and power exchange (PX) markets, and suggestions that owners of generation took advantage of the supply shortage and the design of California's wholesale power markets to exercise market power to drive prices higher.
Wait for the "second wave," when new products help suppliers escape the trench warfare of pricing.
As the U.S. electric power industry unbundles, the industry and its regulators grapple with two big questions concerning the degree to which distribution services should be unbundled. First, what groups of distribution activities can separate suppliers provide? Second, which of these groups of activities should be open to competition?
Looking at the unbundling experiences of Argentina, Australia, Canada, Chile, Norway and the United Kingdom sheds light on these questions. The distribution unbundling of the U.S. gas and telecommunications industries provides additional insights.
The board of the California ISO selected Jeffrey D. Tranen as its first CEO. Tranen is former president of the New England Power Co., senior v.p. of the New England Electric System and chair of NEPOOL. The ISO starts operation Jan. 1, 1998.
Charles F. Gay, Ph.D., former director of the DOE's National Renewable Energy Laboratory, was hired as president and CEO of ASE Americas Inc. Klaus Albrecht, former president and CEO, will serve on ASE's board and as senior v.p.-business development.