Making sense of the new power market

Bank of America’s Rogers Herndon and David Mooney examine expectations in the energy and power markets before and after the collapse of Enron and outline their predictions for the future

Financial institutions are set to play a key role in the North American power market. The withdrawal of so many energy companies has created a vacuum that can only be filled by creditworthy new participants. The idea that energy companies would transform themselves into giant global trading houses is now largely discredited. The scale of the shake-out in the power trading business has been enormous. It is barely a year since Enron’s financial difficulties came to light and in that time eight of