Enron Corp.’s biggest “void” in the energy trading industry has been in service to customers, many of whom have been left in the lurch, but those customers will be taken care of quickly, as other marketers move into the void, said a panel of energy company executives speaking at the 22nd Annual Andersen Energy Symposium in Houston Wednesday. Many energy companies expect to see opportunities to pick up from the ranks of Enron unemployed some of the best employees in the business, as well as their customer contacts.

David M. Johnson, a partner at Andersen who served as moderator, called 2001 a “year like no other.” As the year began, he said natural gas prices were sky high and companies were discussing expansion of liquefied natural gas projects. By spring, attention was turned to California, and there were “all kinds of spin offs and name changes. Then came a relatively calm summer, and Johnson noted that “we finally thought the fourth quarter would be tame.”

Noting that most of the attention at this year’s conference had centered around Enron, Johnson said that now more than ever “volatility and uncertainty in the markets” is at an all time high. While the scheduled panel was centered on energy trading and marketing, the events surrounding Enron captured many of the audience’s questions and changed the focus of the three speakers. Enron and all that it once was, is expected to be the focus of many energy companies’ trading arms now and well into the future.

“The biggest void is in the market making that Enron was able to accomplish,” Tamela W. Pallas, COO of CMS Marketing, Services and Trading (MS&T), told the near-capacity crowd. “I never liked the idea of one counterparty, but Enron made it work very well for them.” However, Enron now has left a “huge void of customers,” she said, many that don’t know where to go to redo their contracts. On a business level, though, Pallas said the collapse of Enron and its subsequent massive layoffs offer an “opportunity for all of us to look at some of the great people…it offers a positive for other trading companies.”

James M. Donnell, CEO of Duke Energy North America (DENA), does not expect any one player to capture the market share that has moved from Enron. Rather, Donnell said he thinks that the marketplace will see “pieces of the business segment go to different players.” Enron was a “fabulous market maker,” he said, and its recent problems have “impacted volatility on the front end.” He too expects to see many of Enron’s employees reappear soon, bringing their “fabulous” skills sets to other companies.

Enron’s fall has “left many people high and dry” all along the trading chain, said Donnell, from the marketing end to the supply end. “But those players will find a home. The impact is painful on the short end,” but in the long term, it will abate.

The long-term view of Ed Mills, COO of Aquila Inc., is that there will be “many challenges” for the smaller trading platforms, but he firmly believes that eventually, there will be a stronger move to larger platforms. Aquila is an investor in the IntercontinentalExchange, an electronic commodity exchange that has the backing of several energy companies. “[EnronOnline] was only a thin layer…the remaining players have always been deep. Enron was visible, and it is the focal point of conversation. But the focus is on the customers. We’ll solve that problem,” said Mills. “It can be fixed very quickly.”

The financial implications of what happened to Enron will take a lot longer to sort out, said Mills. In the end, he expects to see more structured financial agreements, and a move toward trading companies with more assets to back up their transactions. “I feel pretty good about that.”

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