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Enron Mail |
ZE Power Group Inc. ................................................................. ENERGY VIEWS ----------------------------------------------------------------- Changing Perspectives on the Energy Industry ----------------------------------------------------------------- CUT BACKS IN 2002: BUSINESS RISK MANAGEMENT OR JUST PLAIN BUSINESS RISK? ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: THE BIG BANG IN 2001 2001 was a year like no other. The magnitude of events and economic repercussions, have been difficult to manage for many. We, as industry participants, have witnessed tremendous uncertainty and price volatility, which resulted in stratospheric price increases and the collapse of energy markets. As markets died (actually returned to historical lows) and as industry participants filed for bankruptcy, we are left with the question "What next?". INDUSTRY IN FLUX The industry is in a state of flux once again and floundering badly. The California experiment and the Enron model proved to be economic disasters that may never be rivaled. After the fallout, who is left to blame? Do we scapegoat it to the California regulators, to those eager to make a buck or to an overriding failure of all us to recognize the complexity and unique nature of the energy industry. CUTBACKS AND LAY-OFFS The worrisome reaction of many industry participants (coast to coast), at this time, has been to dramatically cut capital spending and reduce staff. This may seem a safe option given the relative calm of energy prices, in our opinion this strategy may be suspect in the long-term. The forthcoming changes from regulators, and from within the industry itself, will be massive and will require significant resources to implement. Will you be ready for the onslaught? Business protocol must change and that change will be all encompassing. US Federal Reserve Chairman, Alan Greenspan, expressed confidence that there would be significant changes to accounting practices and corporate governance (of the energy industry) as a result of the Enron/Anderson scandal. THE CERTAINTY OF CONTINUED UNCERTAINTY If we have learned anything in the last six years, since the opening of the Alberta Power Pool on January 1 1996, it is that the market is violently uncertain. There is no indication that the industry will stabilize any time soon. The other not so obvious observation is that those corporations operating in competitive markets with solid infrastructure, effective trade and risk policy and the ability to intelligently analyze large amounts of data have come into 2002 in relatively good shape. The industry as it is currently situated suggests a need for some level of conservatism without compromising corporate integrity. Perhaps now is not the time to cutback, but rather to shore-up while there is a break in the storm. HOW ARE YOU POSITIONED What corporations should be asking is how actions I am taking today will impact tomorrow's business opportunities. We know many are cutting back on expenditures, but is this at the cost of risk exposure or lost opportunity. There is limited risk as long as prices are low; but we all know that the industry has thus far behaved outside of anybody's expectations. There is no reason why uncertainty will not continue to prevail. ZE POWERGROUP CAN HELP We have spent the better part of the last six years working diligently to equip our clients with nimbleness in and protection from volatile energy markets. As such, we moved from providing high-level strategic support for our clients to developing the software tools required for dynamic trade. We invite you to visit our web site to explore whether there is potential for ZE PowerGroup to help equip your organization. Areas of focus that are critical in the short term include: * Strategic plans * Development of corporate infrastructure * Implementation of strict but adherable policy, practices and procedures * Data management and analytics * Software to support dynamic trade and risk * Credit risk management CONTACT For more information visit http://www.ze.com or call Paul Seo at 604-244-1672 or by email mailto:paul@ze.com ----------------------------------------------------------------- About ZE Energy Views ----------------------------------------------------------------- In our continuous efforts to serve the industry, we have developed "Energy Views" as a platform to communicate with the industry on a regular basis to relate issues and views we believe have industry wide relevance. We hope you find benefit from reading the emails. Feedback is welcome. ----------------------------------------------------------------- ZEPG Products ----------------------------------------------------------------- ZE Market Analyzer & Data Management Suite Http://www.ze.com/pdf_documents/MA_Jan29-2002.PDF Http://www.ze.com/pdf_documents/DM_Jan29-2002.PDF ................................................................. Fully customizable automated data importers and a sophisticated web based market analysis tool used to view, extract and analyze industry data. ZE Forward Price Views Http://www.ze.com/pdf_documents/FPC_Jan29-2002.PDF ................................................................. Mid and long-term Energy Forward Price Views that support decision processes by providing access to rigorously developed probabilistic price views and the market expertise embedded in them. ZE Credit Risk Manager Http://www.ze.com/pdf_documents/CRM_Jan29-2002.PDF ................................................................. Determines corporate specific counter-party credit limits as well as clients' own credit (transactional) limits, through analysis of a series of industry specific parameters. ZE Trade Manager Http://www.ze.com/pdf_documents/TM_Jan29-2002.PDF ................................................................. Designed to capture and manage all aspects of electricity and gas transactions. Including: spot, term, transmission, index, fuel and cash-out deals involving the purchase and exercise of options via a trader friendly interface. ----------------------------------------------------------------- About ZE PowerGroup Inc. ----------------------------------------------------------------- ZE PowerGroup is a strategic consulting firm incorporated to serve the emerging needs of an energy industry in transition. ZE PowerGroup offers a full spectrum of services, from strategic planning and implementation through to technical analysis and energy trade and transaction software development. ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: You received this newsletter because your email address is on our mailing list. We hope you find our mailings useful and insightful. However, if you'd like your name taken off the mailing list, you can do so by clicking mailto:unsubscribe@ze.com?subject=UNSUBSCRIBE (This will open your default mail application with the subject line already filled in) Then just press send.
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