Confidence in deregulation has fallen over the last 12 months among senior executives in global energy utility companies, according to a new survey by Cap Gemini Ernst & Young. The survey, “Delivering Value Through Competition,” based on interviews with more than 130 global senior executives finds that more than 40% are now less positive about the prospects for deregulation.

Among the negative points raised were concerns about interventions in markets by regulators and governments, loss of liquidity in wholesale markets and the challenges associated with implementation of deregulation. The collapse of energy companies, caused for some of them by their inability to comply with new regulatory rules, also were recurring issues raised by executives.

On a positive note, there was the recognition that the industry has adapted to life after Enron, despite a significant fall in credit ratings among U.S. utilities. Furthermore, the survey finds continued support for trading with strong risk management tools, however, a large majority believed that only asset-backed trading models were viable within the sector.
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