Posted on 13-5-2002
Power
Lines
The rise and fall of Enron shows for all except those who will
not see that
energy markets were and remain susceptible to manipulation at
the hands of
traders doing what traders do — exploiting loopholes and inefficiencies
to
maximum gain.
The `real-economique' is politicians gutting local and national
regulations
and giving way to so-called free-markets, free-competition and
the global
corps so that local and national authorities lack the tools
to properly
manage the competitive power markets that have gradually supplanted
tight
regulation, state and private utility monopolies over the last
few years.
Under existing rules in the US (much tighter than those in New
Zealand)
Enron's aggressive trading tactics — with names like Get Shorty,
Fat Boy
and Death Star — were probably legal. And similar schemes, traders
say,
remain in wide use, because energy markets remain flawed. "Energy
trading
is a football game; it ain't bridge," said R. Martin Chavez,
chief
executive of Kiodex, an energy risk management firm in New York.
Mr. Chavez
was formerly the head of risk management for energy trading
at Goldman,
Sachs. "If you want a nice game because electricity is an important
public
good, then set up a nice game."
Defenders of the deregulation experiment respond with the unbelievably
over-used but still apparently useful spin ... be patient. "I
think
gamesmanship is inherent in any new market, and the hard thing
to convey to
consumers is that creating these markets is a long-term endeavor,"
said
Steven Sullivan, a spokesman for the agency overseeing New York's
electricity grid. "Just as babies stumble when they learn to
walk, we are
in that same place."
Bull in a bear market. Winter is on its way in New Zealand and
power
companies are poised to exploit that fact of nature and anything
else that
increases their bottom line. Any other explanation of events
can safely be
read as flannel, spin, PR - in short, lies.
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