Aquila’s support for Feinstein’s regulatory desires could come as a shock to the energy trading industry, which has largely sought to defeat any government interference, arguing that Enron’s collapse was related to corporate governance issues and not derivatives.
Aquila, once considered a pioneer in energy trading, announced plans to wind down its energy derivatives trading last month, taking a large step towards doing so by letting go 44% of its merchant services energy risk management workforce worldwide, including 71 of its 182 London-based merchant services staff. As a result of the cuts, brought about because of credit concerns, Aquila is now looking for a partner to buy into the merchant services division.
"It is critical for bodies, such as this Committee, to work quickly to remove uncertainty from the markets, to make corrective remedies where warranted, and to allow the energy industry to get back to the business of building critically needed infrastructure," Green added.
International Swaps and Derivatives Association officials earlier testified that Feinstein’s proposals were unnecessary (see: Isda to testify before Senate committee).
In related news, an Aquila spokeswoman today confirmed reports that the company paid bonuses of $30 million to five top executives just before firing 500 employees from its utilities business to save nearly $35 million a year.
Ironically, the compensation committee decided that Green’s $6 million in salary and bonuses was insufficient because of his work in cultivating the company’s energy trading business. As a result, the committee put an additional $4.5 million in 'discretionary' cash and stock into his paycheck, pushing his total compensation to more than $10.3 million.