Credit risk
TVA will go bust, say academics
US academics say that the Tennessee Valley Authority would be close to bankruptcy if it were not for the promise of a government bailout, reports Paul Lyon
The future of ETRM
As generation, trading and retailing companies come out from under the dark cloud to prepare for what looks to be a brighter future, one issue has become critical – the need to upgrade outdated ETRM systems with 21st century architecture, portfolio…
A dark futurefor clearing
Clearing was the energy buzz word of early 2003. But as Clearing Bank Hannover goes into liquidation and the future of EnergyClear’s business remains uncertain, it seems energy clearing has lost its appeal. By Paul Lyon
Radioactiveliabilities
Creditors have agreed nuclear generator British Energy’s restructuring package. But without European Union agreement over the UK government’s £4 billion in subsidy, these creditor agreements could be meaningless. James Ockenden reports
The credit charge
Brett Humphreys describes a simple method for charging traders for the credit risk embedded in a contract, using an example based on an oil purchase agreement. Such a charge creates proper incentives for traders with regard to credit risk
A slow recovery
Recent research carried out by Fitch Ratings says the energy merchant sector has made great strides towards solving its near-term liquidity woes. But there is much work still to be done, finds Paul Lyon
Measuring the value of clearing
Central clearing houses offer major advantages to the electricity trading industry, says UK Power Exchange’s Paul Danielsen. He sets out a practical example to demonstrate how UK power firms can benefit from clearing
Calpine completes project financing in Wisconsin
California power company Calpine Corp has completed a $230 million non-recourse project financing for its 600-megawatt (MW) gas-fuelled electricity-generating Riverside Energy Center in Beloit, Wisconsin.
Enron files complaint against six of its former banks
Houston-based Enron last month filed a court complaint against six of its former banks, claiming they gave bad financial advice that contributed to its demise in late 2001. As a bankrupt company, Enron is required to try to recover as much as it can for…
Getting it together
Data consolidation is now a vital foundation to any successful risk management implementation, as Dave Rose and Stuart Cook of The Structure Group report
A true test for value-at-risk
The three classic approaches for measuring portfolio value-at-risk do not compare like with like, argues Richard Sage. Here he presents a test portfolio to highlight the differences between calculation methods
All talk, no action
Cancelled power plant auctions and the complexities of asset debt structures are bad news for the boutiques set up to acquire power assets. The boutiques talk a good business plan – but execution may prove troublesome, as Paul Lyon discovers
Isda and EEI collaborate on Power Annex
The New York-based International Swaps and Derivatives Association (Isda) and US trade body the Edison Electric Institute (EEI) published a North American Power Annex to the Isda Master Agreement in August.
UK energy brokers form association
Nine brokers operating in the over-the-counter energy markets in the UK formed the London Energy Brokers’ Association (LEBA) in July.
Mirant bankruptcy is not terminal
US energy firm Mirant’s July bankruptcy filing bucks the recent trend of last-minute restructuring deals that have saved many of its rivals from a similar fate. But analysts say the company is likely to emerge from its filing with at least some of its…
A capital adequacy primer
A summary of the Committee of Chief Risk Officers’ (CCRO) emerging guidelines on capital adequacy, by Cinergy’s Antonio Ligeralde, Kenneth Robinson of El Paso Merchant Energy and CCRO head Michael Smith
Management buys out SG’s weather and cat bond funds
Société Générale’s (SG) weather derivatives team completed an amicable management buyout of the weather division at the French bank. The buyout creates what is believed to be the largest range of dedicated weather derivative and catastrophe bond funds,…
S&P to apply stress test to power firms
Standard & Poor’s (S&P) is to apply a stress test designed to measure how well power companies can stand price swings in volatile electricity markets. The move is part of the credit rating agency’s effort to combat criticism of rating agency failure to…
Mirant raises prospect of bankruptcy
Energy company Mirant asked its bank lenders to approve a pre-packaged bankruptcy plan in June, suggesting the Atlanta-based company could be forced to file for Chapter 11 bankruptcy.
More power to the banks
Banks now have greater freedom to participate in derivatives markets based on physical commodities thanks to two recent ruling by US regulators. As a result, the balance of power looks set to shift from Houston to New York. By Paul Lyon
Lessons in loaning
Lenders and borrowers alike are becoming ever more innovative at a worrying time for energy company financing. But will the new ideas catch on? Paul Lyon reports
Scaling the credit cliff
How are designers of credit risk software reacting to the new credit realities of the energy trading sector? Kevin Foster talks to some leading companies to find out
A clear answer to credit problems
US firm PA Consulting is working with a number of major US energy companies to set up a one-off trade netting scheme. Kevin Foster investigates the proposals