And the company says FERC has not done enough to open access to transmission lines, which would allow traders to move power around the country. To that end, Enron has lobbied hard for President Bush's plan for a national electricity grid. Palmer says the notion that the price of electricity rises each time it is traded is mistaken. Dunn, the California state senator, says his investigation found a different function for trading. At a time when supply barely meets or falls short of demand, he noted, companies with electricity to sell have to worry only about how high to set their price.
Trading develops a level of trust.
You, my alleged competitor, will bid in the same patterns and I will respond not in a competitive pattern but in a complimentary pattern. The state senator said his investigation found evidence that on several days, energy companies appeared to test their ability to drive prices up, without being undercut by competitors. This ability to drive up prices without competitive consequence is a key test of market power, the technical term for manipulation or price fixing. But Dunn also conceded that antitrust violations can be hard to prove in court. He suggested that even if the trading behavior falls short of antitrust violations, it remains anti-competitive and devastating for the California economy.