Energy speculators siphon millions of dollars away from rate payers

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Eric Hildebrandt first raised the red flag in an annual report written in 2015 for his bosses overseeing California’s electricity market. He raised the same issue in a 2016 report. And he is raising it again in a recently released 2017 report.

The warning to the California Independent System Operator: Trading by speculators and other investors in an obscure financial instrument pegged to electricity transmission is costing the state’s electricity customers an average of $76 million a year, contributing to higher rates. From 2009 to 2017, Hildebrandt reported to the state, California ratepayers lost almost $700 million, and the tab keeps growing.

While generating profits for investors with returns averaging 146% a year, the trading serves little purpose for energy users and shouldn’t cost consumers a dime, his reports have concluded. Hildebrandt recommends the trading — also cited for its vulnerability to market manipulation akin to the Enron scandal — be terminated.

Los Angeles Times

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