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September 14, 2005
Duke Energy sheds wholesale power and trading assets
In a move that was widely-anticipated in energy circles, Duke Energy Corporation plan to shut most of its money-losing wholesale power and trading businesses and take a third-quarter pretax charge of about $1.3 billion. Duke is shedding most of its wholesale power business as it expands its traditional utility operations through a planned $8.98 billion acquisition of Cinergy Corp.
Duke started paring its wholesale power business after the bankruptcy of Enron Corp. in December 2001 and the ensuing collapse of the wholesale electricity markets and related trading business. Government investigations into trading practices followed, which resulted in criminal indictments that furthered soured Duke on the trading business. In the meantime, buyout firms, hedge funds and investment banks such as Goldman Sachs and Morgan Stanley have become much more active in buying power plants and trading electricity.
Posted by Tom at September 14, 2005 05:19 AM
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