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Competition in the Electric Industry Emerging Issues, Opportunities, and Risks for Facility Operators (1996) / Chapter Skim
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Buying and Selling Electricity: Perspective of a Power Marketer
Pages 53-57

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From page 53...
... Enron trades natural gas, gas liquids, and now electricity as commodities. Our trading activity is conducted on a trading floor that is very similar in appearance to a typical securities trading floor on Wall Street.
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From page 54...
... Information and Commodity Markets Enron is a commodity dealer, trading in electricity and natural gas and managing the risks of doing so. Information is the vital element of any commodity business, and whatever entity can accumulate the most information and act on it most quickly will have a competitive advantage.
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From page 55...
... As a result, the spot market is trading on a marginal cost basis. Power marketers and other market driven participants can offer contracts for far less than it would cost to build generating capacity.
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From page 56...
... Enron today offers fixed-price contracts out to 20 years for baseload, intermediate {gad, and peaking firm energy and/or capacity, along with a variety of ancillary services that will become available as the transmission-owning utilities file their tariffs for unbundled services. As retail competition in the power markets becomes a reality, these same evolving markets will allow the formation of service companies that aggregate load and provide power for retail customers.
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From page 57...
... Conclusion Unfortunately, federal agencies cannot yet take advantage of these opportunities. Section 8093 of the 1988 Department of Defense Appropriations Act, in essence, forbids federal installations from buying power against state laws that typically set franchise rights for utilities.
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Key Terms

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  • natural gas
  • trading floor
  • power marketers
  • power marketing

  • power markets
  • trading activity
  • generating units
  • fixed price
  • entire load

  • offer contracts
  • utility service
  • cost basis
  • increasingly liquid
  • near load

  • build generating
  • franchised utilities
  • gas business
  • enron believes
  • typically float

  • marketing activity
  • percent reliable
  • preestablished cap
  • appropriations act
  • business entails

  • enron meets
  • infrastructure begins
  • typical securities
  • energy prices
  • market continues


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