‘Witch hunt’ by regulators hits energy investor confidence
Current investigations by regulators into as many as 150 energy companies after the crises of California and Enron, amount to a ‘witch hunt’, according to a senior executive at Dynegy.
Speaking at sister publication Energy & Power Risk Management’s annual North American congress in Houston today, Cliff Hare, president of energy trading at Dynegy, said: “We see the current situation as a witch hunt in light of the Enron collapse. It’s an unfortunate word but that’s the way it looks.”
Hare added that the way Dynegy could reinvigorate investor confidence is to co-operate with the Federal Energy Regulatory Commission and the SEC. “This is a strong and important industry,” he said. “It is prudent that allegations of wrongdoing are investigated and correct that answers are found, but this should not interfere with Dynegy and the rest of the energy industry doing the business we are here to do.”
On May 10, both Dynegy and Michigan-based energy company CMS Energy agreed to co-operate with SEC inquiries into the suspected act of buying and selling power simultaneously with each other to inflate trading volumes.
The SEC’s investigation into Dynegy’s allegedly volume-inflating trading practices has also proved cause for investor concern, but is not the only example in the market. Houston-based Reliant Energy admitted to the market on the same day that it too had bought and sold power simultaneously with an unnamed partner. The company, already under Ferc investigation for possibly illegal trading practices during the California power drought of 2000/1, has also seen its share price tumble. Reliant Energy shares were down $3.86 to $17.59 on Monday May 13 – a fall of 18%.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Competitiveness mandate for Esma faces uphill battle
European Parliament offers last chance to force Esma to take more nuanced approach
Europe expects FRTB to bite on XVA hedges
Risk Benchmarking: One-third of European dealers fear new market risk rules will have major effect on hedges
Burning ambition: will Europe join the US in setting fire to the rules?
As the US dismantles post-crisis regulations, some think Europe will follow in a bid to boost economic growth
Can US perpetual futures solve their identity crisis?
Market could fall under four different regulatory categories, with sharply diverging outcomes
Banks want AML data upgrade to complement US regulatory reform
FinCEN’s proposed overhaul sparks debate on whether it will lead to smarter or weaker supervision
Industry pushes EU exchanges to solve equity post-trade frictions
Deutsche Bank, Goldman Sachs and JP Morgan join calls for mandatory cash CCP interoperability
Regulatory clarity urged for CME’s single-stock futures
SEC short selling and market access rules may hamper clearing and broker participation
Imminent US shake-up of LCR slated to include discount window
Adding Fed liquidity facility to bank regulation may help overcome stigma, raise lending capacity