interesting NY Times article on Energy Providers.
nytimes.com
NRG mentioned...has some insider buying, however, a bit of a risky venture with the politics around energy in California.
biz.yahoo.com
Right at 50 dma...if it can get through, it has room. overall trend has been down.
finance.yahoo.com
Part of the article.
Independent Firms a Growing Factor in Latest Energy Crisis
By RICHARD A. OPPEL Jr.
N.R.G. Energy Inc. was not even a stand-alone company a year ago, but it has big plans for the next few years: building enough power-generation plants to supply the equivalent of 35 million homes.
With power supplies tight across much of the United States and Wall Street opening its pocketbook to energy concerns, companies like N.R.G., based in Minneapolis, are reshaping the power-generation industry.
Nearly every new power plant in the United States is being built not by an old-fashioned state-regulated utility, but by largely unregulated operations like N.R.G. The independent companies now account for more than 20 percent of domestic electricity generation, a number that is rising quickly as demand for power continues to grow.
The industry's growing market power is starkly evident in the California power crisis, where Gov. Gray Davis is trying to press the independent generators to keep their electricity flowing — but at cheaper prices — and to forestall bankruptcy filings by the state's two largest utilities. Those utilities, Southern California Edison and Pacific Gas and Electric, are struggling to pay for electricity they have already bought from the generators, and Mr. Davis said last week that four of the power producers had threatened to force the utilities into bankruptcy.
California's four-year-old deregulation law has allowed the power producers to grab a larger share of generation capacity than in most states. Indeed, the utilities were under orders to sell their power plants, although California regulators recently reversed course. But the trend is the same across the nation, as electricity supplies are increasingly controlled by companies that do not operate under the oversight of state regulators.
These companies build power plants only where it is most profitable — and not necessarily where they are most needed. And unlike the old days of regulation, state governments cannot mandate the development of excess generating capacity for independent producers, or the use of a varied mix of energy sources, instead relying on the marketplace to anticipate power needs and fuel supplies.
"Market forces were supposed to discipline the market better than what regulators could do," said Ken Rose, a senior economist at the National Regulatory Research Institute at Ohio State University. "But if market forces are weak, or somebody has market power, there's a tremendous ability of suppliers to control the price, or at least influence it, and not a lot of recourse for the state, because power plants are now out of their jurisdiction."
Instead, he said, it falls to the Federal Energy Regulatory Commission to fix a broken market — the commission has engaged in a running battle with California officials who feel it has not done enough to resolve the energy crisis.
Independent generators and other backers of deregulation — President Bush among them — say that market forces, allowed to operate freely, will ensure an adequate supply of power. Along with many analysts, they attribute California's problems mostly to a badly designed deregulation law — unique to the nation's biggest state — that left the utilities victims of a marketplace that invited price spikes and volatility.
The pro-deregulation forces say, too, that none of the many investigations into suspected market manipulation during the crisis have conclusively fingered the generators, for all of Governor Davis's castigating them as "profiteers." |
