Merrill Lynch

Energy Hedge Funds: Market Makers or Market Breakers?

Should utilities and consumers be concerned about these obscure investment groups?

The total hedge-fund universe currently approaches $1.1 trillion, about 5 percent of which is dedicated exclusively to energy. These numbers for energy hedge funds are likely to grow at unprecedented rates. How can your company benefit?

“Mysterium tremendum et fascinans”: The Latin phrase, coined by German theologian Rudolf Otto, which characterizes humans as being overwhelmed and fascinated by experiences that are totally different from ordinary life.1

Market Resurgence

Banks are reshaping the energy-trading landscape. When the dust settles, utility companies will face different strategic horizons.

Utility executives face volatile energy markets, skyrocketing fuel prices, and changing federal energy policies. How are utilities benefiting from the turnaround in energy trading?

A Constellation Of Risks

Will the deal with FPL serve the best interests of ratepayers? 

Even as many hope that repeal of the Public Utility Holding Company Act (PUHCA) will lead to more efficient and rational corporate structures, they also fear that repeal could foster irrational exuberance, with mergers that fail spectacularly. Maybe that explains why every new utility merger announcement is being met with a much higher level of scrutiny than in past decades.

Going to the Bank

Financial buyers are snapping up power plants faster than at any time in history. The asset shift represents an interim step in a wholesale-market transformation.

A dam broke last year, releasing a wave that even now is spreading through the U.S. power industry. Deals that had been languishing on the auction block for months suddenly surged forward in 2004, and assets began changing ownership at a torrential pace. Understanding what this means for the power industry requires a long-term perspective on wholesale-market trends.

The New, New Thing?

At a posh dinner event and conference, industry experts speculate on the issues that could affect the industry in 2005.

It was the most exclusive, and one might say, one of the most extraordinary dinners. Never have I seen so many prominent CEOs, regulators, and financial gurus all in one room, discussing the future of the electric industry.

Frontlines

Will a back-to-basics strategy meet investor expectations?

Frontlines

Will a back-to-basics strategy meet investor expectations?

It's an issue that is coming to the fore with greater force-the debate over how utilities should honor their obligation to stockholders. But this time there seems to be quite a difference of opinion over strategy-or so we found in our annual finance issue.

Back to the Ratebase

BYLINE

BYLINE

As a former independent power producer, George Lagassa is sympathetic to the woes of the merchant power industry. Until just a few years ago, he held the license to a micro-hydro qualifying facility (QF) in New Hampshire, so he understands what it takes to compete in a regulated-franchise industry. Yet, as the principal of Mainstream Appraisals in North Hampton, N.H., Lagassa is also a dedicated pragmatist. He sees the industry's consolidation trend as a sort of correction in the U.S. power market.

Climate Change: The Heat Is On

From reporting to trading, utilities try to meet new expectations.

From reporting to trading, utilities try to meet new expectations.

On the issue of global climate change, most utilities have devoted their attention to tracking developments in Washington, D.C., following the rising and falling fortunes of legislation that could result in federal greenhouse gas (GHG) reporting or regulatory requirements. For the most part, utilities have taken comfort in the resolutely anti-regulatory stance of the Bush administration on greenhouse gas emissions.

The Utility Sector: A Wall Street Takeover?

Financial players bring credit depth to energy markets, but will they play by the rules?

Financial players bring credit depth to energy markets, but will they play by the rules?

The center of gravity for energy marketing and trading activity is moving from Houston to Wall Street. Some major financial institutions already have plunged into the market, while others are testing the waters, gearing up to participate in a bigger way. Already their impact is being felt, and it is most definitely welcome.