Williams Cos. to tell FERC it didn't do round-trip trading
Friday, May 31st 2002, 12:00 am
By: News On 6
TULSA, Okla. (AP) _ Williams Cos. Inc. will tell the Federal Energy Regulatory Commission on Friday that it did not engage in so-called ``round-trip trading'' to inflate volumes or revenues, officials say.
``In response to the FERC request, we have denied under oath that we intentionally engaged in a transaction to sell electricity to another company and simultaneously buy it back at the same price,'' Steve Malcolm, chairman, president and chief executive officer, said Thursday in a news release. ``Our business is not driven by volume and never has been.''
``Round-trip'' trades occur when energy is sold and simultaneously repurchased to inflate trading volumes and revenue.
Williams disclosed last week that less than 1 percent of its energy trades over the last two years had ``round-trip characteristics,'' but that it did not affect revenues.
Four other companies admitted to the legal trades, which prompted FERC to direct 143 energy companies to disclose under oath whether they engaged in such trades and to provide details of any such transactions.
Dynegy Inc. chief executive Chuck Watson quit Tuesday amid investigations into energy trading and accounting, and CMS Energy Corp. CEO William T. McCormick Jr. resigned last week after the company disclosed $5.2 billion of sham electricity trades.
Williams is almost guilty by association, and probably unfairly so, said Steven Remchuk, a regional executive at Banc One Investment Advisors.
``The reality is that the market is very, very nervous, and any uncertainty is quickly reflected in the stock price,'' Remchuk said.
The stock of Williams Cos. fell $1.47 to close at $14 on Thursday. The drop came on the same day an analyst for Salomon Smith Barney downgraded the pipeline and energy company's stock to ``underperform'' from ``outperform.''