Off Peak
April 15, 2003
On A Wire
Teen's life saved by utility line. Can industry say the same?
We can only hope it's a metaphor for the electricity industry.
In January, Joe Thompson III, 18, of Blue Springs, Kansas, was cruising along in his Jeep Wrangler sans seatbelt.
So, too, the electricity sector: "With dazzling speed, the energy-trading business sprang up in the late 1990s and seemed to become a $300 billion bonanza. . . Amid a booming stock market, giddy investment-house analysts forecast stellar earnings for energy traders. Energy-trading stocks soared." (Wall St. Journal, 12/31/02)
Suddenly, a car turned in front of Thompson. His Jeep clipped the other car and rolled, ultimately throwing him 25 feet or so in the air.
The industry's broadside? "But with little regulatory oversight, a Wild West atmosphere quickly developed. . .
Questions arose about concealed liabilities at Enron Corp. and dubious gas deals at Dynegy Inc. Not everyone took this route. But enough companies did that energy trading is in shambles-one of the swiftest and largest examples of a market boom and bust in U.S. history. . . [T]he entire affair raises serious questions about whether such a complex market can operate safely without close regulation." (WSJ, 12/31/02)
Meanwhile Thompson reached the top of his 25-foot arc, and started to fall back to earth. But as he fell, the teen's legs got caught in some utility wires, and slowed him down enough so he could wrap his arms around some more wires. Even luckier, all the wires were either insulated, ground wires, or telecommunications wires.
After the industry started falling back to earth, though: "Laughter in the energy industry has been in short supply of late-and not an artificial shortage either." (LA Times, 6/16/02) "Just a few years later, [energy trading is] mostly gone, having collapsed in a flurry of fraud, aggressive accounting and flat-out greed." (WSJ, 12/31/02) "[N]ow, seven months after the collapse of Enron, the merchant-energy industry is suffering one of the bleakest periods in memory." (LA Times, 6/16/02)
For the next 20 minutes, Thompson hung onto the lines for dear life. While he waited, Thompson kept saying a prayer, "Lord, give me the strength to hold on." Maybe there was divine intervention: A Bible that had been in Thompson's Jeep landed right beneath him.
The text the industry keeps reading? "Every day, it seems, brings another damaging revelation, another investigation launched, another executive resigned. . . Of the 123 industry groupings in the Standard & Poor's 500 blue-chip stock index, the Multi-Utility category-made up of Duke Energy, Williams Cos., Dynegy, Mirant, Calpine and AES, California players all-finished dead last for the month of May, with an aggregate decline of nearly 23 percent." (LA Times, 6/16/02)
Once the power lines above Thompson were turned off, fire and rescue crew got him down and sent him via helicopter to a local hospital, where he was treated for bruising and abrasions, then released.
The prognosis for the industry? "Industry experts believe the high-risk Enron model-relying on speculative trading for revenue-might be dead. They predict a glowing, long-term future for more diversified companies such as … Sempra that use trading to complement their main energy-distribution businesses. Analysts are guardedly optimistic." (USA Today, 1/21/03)
Public
Utilities Fortnightly & Spark
