Q: What changes have occurred since the original interview took place with World Cogeneration in 1997?

A: The retail business environment was unclear at the time of the original interview. The opportunity appeared to be very large and needed to be tested in a prudent way, so Williams entered the retail business through partnerships, acquisitions and sole ownership. However, the retail market opened at a slower and more sporadic pace than we originally anticipated. Retail marketing will require significant effort and time to be successful and may not be the best method at this time for suppliers to access gas and electric sales markets.

    The restructuring of the electric industry has moved along significantly since the 1997 interview. The development of liquid markets is happening at a different pace in different parts of the country. As a result, the "one size fits all" strategy had to be modified. The formation of ISO's and the RTO debate has occurred since our last interview and has the ability to fundamentally alter the regulatory and commercial environment in electric power.

Q: What has EM&T accomplished since the previous interview?

A: We pioneered a number of innovative concepts through long-term tolling agreements for the power industry and have been successful in working with counterparties. For example, in the power industry, we've realized that we should seek counterparties to manage plants, while we manage market risk. And as the deals in the power industry have grown larger, the size of risks have increased. We therefore sought to establish a better skill set balance with counterparties while sharing the risk on these huge deals.

    We used to think of ourselves as a power marketing company but have found the skills needed in finance, physical logistics, risk management, fundamentals analysis, and government affairs to become an integrated energy marketer, are much broader than our previous definition of a power marketer.

    We have put together a portfolio of power supply agreements that I'm very proud of. We work with LDCs to add value to their suite of assets and take on the role of risk manager. We have also realized that we need to focus on long-term business relationships as opposed to the temptation to focus on short-term gains, which shows the maturing of the industry.

Q: How has EM&T changed?

A: The role of the management team has evolved. We have realized that building a cohesive, strong management team in an energy marketing and trading company is a challenging and difficult task. Meeting this challenge has been our greatest success, and as a result, we are consistently ranked Top 5 in profitability.

    Adding value and focus around assets and developing regional strengths takes balancing. It has been a challenge to learn how to use the experience and skills of a marketing and trading organization to add the most value overall to our customers. It would be less complicated to have an asset company without trading or a trading company without assets, but our success has come from our ability to manage both and work together.

Q: Where do you see the energy industry headed in the future?

A: The energy industry is settling down through the first wave of major changes, and the roles of the players are becoming clearer in the near term. Companies are deciding what skill sets are important to them and are matching those skills to their business strategies and competencies. They are backing away from being all things to all people.

    I'm very concerned that the role of ISOs and RTOs in the power industry will be guided by the philosophy that the market should choose solutions to energy problems and not regulators.