Fallout

In what at first glance appears to be part of the continuing fallout from the rapid downfall and bankruptcy of Enron Corp., the Securities and Exchange Commission (SEC) last week amended its rules and forms to require more transparent company disclosures of employee stock option plans (ESOP) and other equity compensation arrangements.

Precipitated by the fall of two California utilities and Enron Corp., Moody’s Investors Service said Friday it will increase its global analytical focus on the credit risk implications of “rating triggers” written into a borrower’s debt securities or other contracts because they may cause unintended and “highly disruptive consequences” for both borrowers and lenders. In some cases, warned Moody’s the rating triggers could lead to “mutually assured destruction” including defaults and bankruptcies.

Following Enron Corp.’s inevitable Chapter 11 bankruptcy filing on Sunday, reports of exposure to possible losses due to the energy giant’s failure continue to come in from companies and financial institutions around the world, reflecting the broad reach both of the company’s business and its stock.

Following word of the failed Enron Corp./Dynegy merger, fallout continues to rock the nation in more ways than one might expect. AGL Resources Inc. reported that Sequent Energy Management, its asset optimization subsidiary with a large portfolio of assets under management in the Southeast, has reached an agreement with Enron for early termination of an asset management contract related to Virginia Natural Gas (VNG), also a wholly owned subsidiary of AGL Resources.

The continuing fallout from the energy market malfunction in California and the latest industry debacle, the fall of the Enron energy empire, have made this a “really black-eye year” for the future of energy competition, FERC Chairman Pat Wood told energy attorneys last Thursday.

As if any more fallout from California’s electricity crisiscould be found, a Colorado-based survey/consulting firm Tuesdayreleased summaries of a national client-supported study thatindicates large energy-using businesses are going to be willing topay more to prevent being shut down from electricity outages; andthe costs of those outages is skyrocketing.

More gas processing plants are temporarily shutting their doorsthis month, a fallout from higher natural gas prices. The usuallymore expensive gas liquids now cost less than the raw natural gas,and buyers looking for propane, butane, isobutane and chemicalfeedstocks may have to look a little longer and spend a little morethan they did a month ago.

More gas processing plants are temporarily shutting their doorsthis month, a fallout from higher natural gas prices. The usuallymore expensive gas liquids now cost less than the raw natural gas,and buyers looking for propane, butane, isobutane and chemicalfeedstocks may have to look a little longer and spend a little morethan they did a month ago.

The fallout from FERC’s unpopular decision on theSupplyLink-Independence-MarketLink gas pipeline projects continuedthroughout most of last week, first with New Jersey pledging totake the Commission to court over MarketLink and then with the mostpowerful energy lawmaker on Capitol Hill publicly accusing theCommissioners of trying to undermine the construction of theproposed $678 million Independence Pipeline to the Northeast.