It seems there is no end to the woes of the energy trading companies. Amidst allegations of dodgy accounting and questionable trading practices, and a tarred public image, the industry as a whole faces a grim prospect. Will the energy-trading model, which helped create a whole new genre of market, survive?

Until recently, energy trading was hailed as a highly innovative business model and Enron, its pioneer, was the toast of the Wall Street. Enron's larger-than-life image remained symbolic of the free market's superiority over a regulated monopoly regime for over a decade-and-a-half. But with the unceremonious collapse of the energy trading giant and recent stunning revelations about industry wide rampant accounting and trading malpractices coming to the fore, the chinks in the free market economy have got exposed. Needless to say all this raises serious concern about the fate of the deregulation of the electricity markets in US, and hence the fate of the nascent energy trading industry.

As the turn of events suggest, an industry wide restructuring, operational as well financial, might just be in the offing. But will all this help turn the future of the energy-trading model around? With poor earnings guidance given by most of the industry players in the wake of adverse market conditions and signals from regulatory bodies about tighter norms ahead, the energy trading industry as a whole faces a grim prospect.

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