Dynegy shuts down online trading site

Fuente: Financial Times

Dynegy, the troubled energy marketer and trader, further underlined the crisis brewing in the once ebullient energy trading market on Thursday by shutting down its online operation.

The halting of Dynegy-direct, its electronic trading exchange, follows Enron's sale of EnronOnline, its internet platform, to UBS Warburg this year.

Dynegy and Enron were the two big energy trading companies to have their own proprietary trading platforms, say analysts.

The platforms would allow the companies to own each transaction as well as act as a counterparty on a particular trade in the natural gas and power market.

Many of the large energy traders trade with one another on external exchanges such as the Atlanta-based Intercontinental Exchange and TradeSpark.

The collapse of Enron-Online, once the envy of the energy trading community, led many to believe there would be extra business for the remaining players. That has not been the case.

"After Enron, everyone assumed that they could split Enron's share of the pie, whereas now that share of the pie has evaporated altogether," said an analyst. Dynegy said on THursday it would continue marketing and trading with its customers in North America and the UK by phone.

"Our goal is to reactivate Dynegydirect when the market stabilises and trading demand justifies the use of real-time desktop service," said Dynegy spokesman Steve Stengel.

Recent allegations of fake "round-trip" transactions for the sole purpose of boosting trading volumes and the fallout from Enron have left many energy groups facing a crisis of credibility and creditworthiness.

As a result business has dried up and companies are under pressure to shore up their balance sheets.

Companies such as El Paso and Calpine have responded with plans for asset disposals, cost cutting and equity issuance.

Analysts said halting Dynegy's online system would not amount to substantial cost savings. They are looking instead to Dynegy's conference call on Monday and further operational changes.

On Wednesday Dynegy announced the departure of its chief financial officer and said it was shedding 340 jobs, or 6 per cent of its workforce. The closing of its online operation will not lead to any more job cuts