Roger's 1998 Short Picks Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Roger's 1998 Short Picks

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Roger A. Babb who wrote (18363)	8/9/1999 11:43:00 AM
From: BDR	of 18691

Roger: I ran across the following article on the deregulation of the electricity markets. I know you have worked some in this area through OSA. That association may constrain you from commenting but it seems to me that the industry is in for some choppy times and some of the smaller companies may be good short candidates if one knew enough about the field. I don't, so I am looking for input. Thanks. newspage.com CINCINNATI - The Associated Press via NewsEdge Corporation : Cinergy Corp.'s default on contracts for delivering wholesale electricity during last week's heat wave is raising worries about the stability of the relatively new business of marketing power. . . . Some analysts say Cinergy's troubles reflect some of the problems with wholesale trading at a time when the electric industry is being deregulated and faces increased competition. Some smaller electric suppliers dropped out of the wholesale market last year after several defaults and losses for some utilities during a sudden surge in prices. Raymond Niles, an analyst with Schroder & Co. of New York, said Friday that Cinergy's problems emphasized the vulnerability of companies without much experience in deregulated markets. He said the recent deregulation has highlighted inefficiencies and a lot of bottlenecks in the U.S. electricity grid that have been building up over 70 years of regulation. ''It's like someone holding down the dial on a pressure cooker, and now the dial is being allowed to move,'' he said. ''It shows that there are serious inefficiencies in the infrastructure that need to be addressed.'' While Niles said that competition over time should help the market work better, he believes small electric utilities like Cinergy are going to have trouble going from a regional to a national presence. ''The winners will be the national companies with lots of experience in deregulated markets,'' he said. ''I think it has raised the question of whether some of the smaller regional utilities should be in this wholesale marketing business.''

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next