As temperatures rise or fall the energy price will be adjusted accordingly This

As temperatures rise or fall the energy price will be

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As temperatures rise or fall, the energy price will be adjusted accordingly. "This transaction exemplifies Enron's ability to offer unique risk management solutions," said Kevin P. Hannon, president of ECT-Commodity & Trade Services. "We fully expect trading in weather-indexed commodity transactions to develop as markets consider alternative means of marketing natural gas and power." This is the first of a broad range of services developed by Enron (risk management / hedging services) with the explicit aim of helping reduce the risk of price swings for everything from gas to advertising space. 2
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2. Enron lobbied for further deregulation of both the gas and electricity industries. In the mid-1980s, oil prices fell precipitously. Buyers of natural gas switched to newly cheap alternatives such as fuel oil. Gas producers, led by Enron, lobbied energeticly for deregulation. Once-stable gas prices began to fluctuate. Enron began marketing futures contracts guaranteeing a price for delivery of gas sometime in the future. The government, lobbied by Enron and others, further deregulated electricity markets over the next several years, creating an opportunity for Enron to trade futures in electric power. With virtually all regulation of the market gone, Enron could improve its independence over energy prices, especially in the state of California. By showing that it had already made contracts with its offshore ¨partnerships¨ it secured fixed prices and thereby made Enron´s Californian customers be “price-takers”. During that brief time alone, energy prices for Californian sectors like residential, commercial, and industrial nearly multiplied by three. Enron and its officers were among the biggest donors to U.S. political campaigns over the past decade. According to a Center for Public Integrity investigation twenty-four top executives and board members at Enron contributed nearly $800,000 to national political parties, President Bush and members of Congress. In addition, Enron made $1.9 million in contributions during the same 1999-2001 period, for a total of $2,700,000. Chairman and CEO Kenneth Lay was invited to take part in Vice President Dick Cheney's task force on energy policy, which met behind closed doors. Enron executives, particularly Lay, are chummy with many in the administration, including President Bush himself, who refers to his friend Lay as "Kenny boy". Much of the deregulation was headed by Wendy Gramm, who George H. Bush had appointed to head the Federal Energy Regulatory Commission. Her husband, Texas Senator Phil Gramm furthered Enron's deregulatory objectives by removing much of the regulatory oversight over Enron's trading. Enron’s CEO Ken Lay gave a memo to Vice President Dick Cheney in April 2002. It spells out Enron's case for why federal authorities should refrain from imposing price caps or other measures sought by California officials to stabilize runaway electricity price and resembles many elements of the administration´s actual energy policy. 3.
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