US Gas & Power Market Manipulation: Recognizing Potential Trading Violations - MMTV 

CPE Credits Awarded: 4
Categories: The Natural Gas Industry , The Power Industry, Trading, Derivatives, Hedging and Risk Management, Virtual Classroom Courses

Course Date Duration Venue Price Registration Deadline Register
08 Aug 2022 2 Days Globally Online - New York City Time Country: us
$ (USD)1,320.00
21 Jun 2022

COURSE SCHEDULE

8-9 August 2022  New York City Timing
Session 1: 8 August 2022 
 12:00pm - 2:00pm EDT
Session 2: 9 August 2022
 12:00pm - 2:00pm EDT

COURSE SUMMARY

The Federal Energy Regulatory Commission (FERC) acts as an independent agency and regulates the interstate transmission of energy.  Amongst their many responsibilities, FERC monitors the US power and natural gas markets along with the companies that operate within them to ensure the public receives reliable energy at a reasonable cost.  However, past investigations have shown that companies can game or manipulate the market for profit.  Therefore, FERC has released anti-market manipulation guidelines.  This virtual instructor-led course will focus on those guidelines in relation to the US power and natural gas markets.

The presentation will begin with a background on FERC along with the power and natural gas markets.  Deregulation altering the landscape and its consequences will be covered as well.  Amongst those consequences, we will touch on the gaming by the trading community that has led to further FERC oversight.  This will bring us to anti-market manipulation guidelines, best practices, and case studies.

The goal of this course is to leave delegates with an understanding of how to recognize market manipulation and the steps to take to react to it.

This virtual solution is comprised of two live instructor-led sessions hosted on state-of-the-art training software with video, audio, chat, live polls, breakout sessions and much more!

PRE-REQUISITES

As this is an introductory course, there are no prerequisites.

WHO SHOULD ATTEND?

This is basic level course and there are no prerequisites.  Class delegates include everyone from support staff to management from trading, risk management, operations, accounting, credit, and contracts groups.

COURSE CONTENTS

Introduction to FERC

  • It’s History – The factors that lead to the creation of FERC in 1977
  • Organizational Structure
  • Changing Mission Over Time - The Energy Policy Act of 2005 gave FERC additional responsibilities
  • Areas of Governance – The regulation the interstate transmission of electricity, natural gas, and oil. The review of proposals to build liquefied natural gas (LNG) terminals and interstate natural gas pipelines as well as licensing hydropower projects…

Background on US Power and Natural Gas Markets

  • Size and Complexity
  • Factors Contributing to Recent Growth – Increasing energy demand and natural gas consumption. The movement of commodities by interstate pipelines, increases in hydrocarbon production, as well as LNG exports.

Deregulation of Energy Markets

  • Changing Market Structures & Operations
  • New Market Participants – The emergence of energy marketing and commodity trading firms interested in supplying natural gas and power to industrial, commercial and residential end users
  • Retail Choice for Consumers – In deregulated markets customers are no longer limited to their incumbent utility and may chose alternate suppliers for the energy commodity.

Consequences of Deregulation

  • Has Deregulation Brought About Lower Prices?
  • Price Volatility - Wholesale electric energy prices can be quite volatile over a 24-hour period due to the dispatch of different generating assets using different fuels and with different generating costs
  • Gaming of Markets by Trading Community
  • California becomes an epicenter for potential market “gaming” due to the size of its deregulated market

FERC Introduces Anti-Market Manipulation Rules – A review of these anti-manipulation rules for

  • Electric Power
  • Natural Gas

Introduction to Third Party Price Reporting Services – Their function, how they produce power and natural gas prices and how these prices are used by the energy sector and various stakeholders.

Explaining the Economic Dispatch of Generation Assets

The Consequences of Energy Trading

  • Price transparency
  • Market manipulation done by
    • Collusion Amongst Trading Parties
    • Paper or Pre-Planned Trades
    • Erroneous Reporting of Trades to Price Reporting Organizations

Case studies. The following related examples represent the most common ways firms have attempted to manipulate markets:

  • Enron
    • Offense: Congested transmission lines to maximize its profits
  • Reliant
    • Offense: Gamed the market by deliberately holding back power generation
  • Dynegy
    • Offense: Load shifting, false reporting, and double selling
  • El Paso Merchant Energy and its affiliates
    • Offense: Inflated the price of natural gas by reducing deliveries to the State
  • Gila River Power
    • Offense: Submitting inaccurate information in booking invalid wheeling transactions

How to Recognize Market Manipulation

  • Screening Question Quiz
  • Review Check Lists that Summaries the Signs for the Possible Presence of Manipulation

Steps to Take if you See or Become Aware of Market Manipulation

  • Internal Reporting Procedures
    • Informing Direct Reports
    • Contact Responsible Oversight Departments such as Legal, Risk Management…
  • External Whistleblower Reporting

FACULTY

ALAN HERBST is a Principal with Utilis Advisory Group, a firm providing strategic advisory and consulting services to the energy sector. Mr. Herbst has over 25 years of energy experience. His specializations include analysis of market fundamentals, related energy infrastructure buildout, pricing mechanisms, commercial trading and risk management opportunities.

UK: (+44) 1865 250521   |   USA: (+1) 713 343 1699   |   Singapore: (+65) 6809 1170

 

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