jueves, enero 07, 2010

Can We Let Google and Wal*Mart be Global Energy Retailers?

First update. A few comments and their response on the original EWPC post


Enron imploded because of fraudulent accounting practices. Their EnronOnline subsidiary was a power market maker. To my knowledge there were no particular problems with them. That operation failed when the market took flight because of the parents' failure.
James Carson

I do not disagree that Mr. Carson may be right. His post, however, do not change at all my post.

With a great help from Mr. Carson, we discussed at lenght the article "The Electricity Without Price Controls Architecture Framework," which readers will enjoy by reading it at the hyperlink http://bit.ly/8XJlra

Global Energy Retailers need to compete in a complete and fully functional Electricity Without Price Control Architecture Framework, that keeps the delivery of electricity regulated.
Jose Antonio Vanderhorst-Silverio

Mr, Carson may also be wrong. EnronOnline was not independent of ENRON. Actually it became UBS and it strikes me that of the four parties in the Equity Transactions Litigation (see below) seems to be the larger amount of the settlement. James, please check for yourself and tell me what you think.

Equity Transactions Litigation

As part of its mission to liquidate remaining operations and distribute assets to its creditors, ECRC filed suit against Lehman Brothers Holdings, Inc., UBS AG, Credit Suisse and Bear Stearns in what is known as the Equity Transactions litigation.

This litigation stemmed from a series of payments made to the four banks on transactions involving Enron's stock in the months leading up to Enron's bankruptcy. These payments concerned a series of equity transactions known as swaps, forwards and derivatives.

The purpose of the lawsuit was to ensure that institutions did not retain fraudulent transfers, received pursuant to transactions that ECRC believed were entered into to help Enron present a misleading picture of the Company's financial health. Under the U.S. Bankruptcy Code, a Company may be required to return a payment made by an entity (here Enron) that subsequently goes bankrupt if the company making the payment was insolvent or inadequately capitalized at the time the payment was made, or if it made the payment with the intent to hinder, delay or defraud its creditors.

All four of these claims have been settled favorably, without any of the parties admitting any wrongdoing. These settlements resulted in the return of more than $248 million to ECRC for distribution to Enron's innocent creditors. The settlements have been as follows:

•April 2007: Lehman Brothers Holdings, Inc. settles for $69.9 million
•June 2007: UBS AG settles for $115 million
•June 2007: Credit Suisse settles for $61.5 million
•October 2007: Bear Stearns settles for $1 million plus waiver of other claims
Jose Antonio Vanderhorst-Silverio

Is their any truth to the first paragraph of Part 5 - Answer to Question 6 on my Presidential Pardon Petition, by Bobby Joseph Fontaine, September 07, 2009?

I knew Enron´s online energy and derivatives trading unit was at the center of controlling the logistics of the MTBE market while also central to managing the payments on the trillion dollar loan that was supposed to have been used to build MTBE refineries. So the principle on that loan had to be paid through Enron with money made from MTBE sales, or pretended sales, or the whole scheme would collapse. I knew there was no way that the head lawyer for this branch of Enron, which after it collapsed became UBSWenergy.com after a federal judge gave it, the only remaining profitable vestige of the Enron empire away for free to the United Bank of Switzerland at Warburg (UBSW), who just happened to have facilitated the trillion dollar loan to build MTBE refineries from money stolen by the KGB from the Soviets Union´s treasury at the end of the cold war, who then became the Russian Mafia in the US. But I knew that the head lawyer for UBSWenergy didn´t know the truth about the whole MTBE story.
Jose Antonio Vanderhorst-Silverio

I do not believe that transactions involving Enron stock were related to EnronOnline. I do not see how EnronOnline was associated with their MTBE refineries.
James Carson

There is no need to confirm, nor disconfirm, whether or not Bobby Joseph Fontaine told the truth about that "EnronOnline was associated with their MTBE refineries," to establish that Enron and EnronOnline were mutually dependent on each other.

According to Ken Peasnell, Professor of Accounting and Finance at LUMS and an expert on Corporate Governance, "From 1985 to 1999 Enron's net income rose from $125m to $893m; its market value grew from £2bn to $50.5bn." So Enron was well established and respected before EnronOnline made its first transactions in 1999. So, Enron and EnronOnline growth were the result of a virtuous circle that was trigger by Enron's credibility.

In addition, according to the Computerworld article "UBS snags Enron's online assets - But faces challenge of winning back customers," by Michael Meehan, published on January 21, 2002, "many experts considered the trading operations to be the keystone in Enron's one-time position as the seventh-largest company in the U.S."
Jose Antonio Vanderhorst-Silverio
Can We Let Google and Wal*Mart be Global Energy Retailers?

Under the article “Google Energy” Subsidiary: What’s Google Up To?, by Katie Fehrenbacher, I posted the following comment, which is at this moment awaiting moderation, in response to the interesting question "Is Google the new ENRON?" written by Ian Bell

The answer should be a strong NO! Google Energy should be something very different than ENRON. ENRON was the result of an incomplete market, that lacked enough functionality, under a flawed architecture. That market was based on the obsolete Investor Owned Utilities Architecture Framework and its incremental extensions, that keep adding huge complexity.

We should make sure that Google Energy, Wal*Mart Retail Energy and/or any other capable players, are able to participate in a federal (and global) complete and fully functional, simplified electricity market, as explained, for example, through the post “Ray Bell Predicts The Birth of Retail Energy in 2010,” which can be read by hitting the link http://bit.ly/7n2HaV

Based on the emergent Electricity Without Price Controls Architecture Framework (EWPC-AF), such a market will open the power industry to the real forces of innovation, as described in the article “A Better Decade Require the End of the Prevailing Style of Management,” which can similarly be read at http://bit.ly/8xQmIz

1 comentario:

José Antonio Vanderhorst Silverio, PhD dijo...

I am sorry. The six comments are on the Energy Blogs version of the article Can We Let Google and Wal*Mart be Global Energy Retailers?