General Discussion

https://www.latimes.com/archives/la-xpm-2002-may-09-fi-scheme9-story.html

One of Enron Corp.’s favorite trading strategies during the California electricity crisis was like booking an airline ticket for a flight you don’t intend to board.

It’s a waste of time and money unless you’re sure the flight will be overbooked and the airline will have to dish out rewards to passengers who agree to stay home.

Enron--and, possibly, other energy traders--worked variations on this theme to collect special fees from the California Independent System Operator, the embattled traffic cop for the state’s power grid following deregulation.

Sometimes Cal-ISO would pay Enron premiums not to use power that the firm didn’t really need in the first place. Sometimes Enron would exploit California’s emergency price caps, buying power at the capped price and then selling it at huge profit out of state, where there were no price caps.

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