SEC Requests ‘Wash’ Trade Data From 3 Energy Firms

Duke Energy Corp., El Paso Corp. and Williams Cos. got informal requests from the Securities and Exchange Commission for data on so-called wash, or “round-trip,” energy trades as regulators widened their probe into sham transactions in the $600-billion market for power and natural gas.

El Paso, the biggest U.S. gas-pipeline company, received the request Friday afternoon, the company said. Duke, the No. 2 U.S. utility company, and Williams, the second-largest gas-pipeline company, said they were contacted last week.

Wash, or “round-trip” transactions are those in which energy is bought and sold at the same price.

The shares of Williams, El Paso and rivals have tumbled amid investigations into energy-trading practices and accounting after the bankruptcy filing of Enron Corp., which inflated revenue and hid debt. California officials have accused traders of sending prices soaring during the state’s power crisis.

Williams had its credit rating cut one notch Friday to Baa3, the lowest investment grade, by Moody’s Investors Service. The downgrade on $13 billion of debt reflects “weak cash flow relative to Williams’ debt and business risks and low asset returns,” Moody’s said.

Shares of Williams fell 23 cents to $8.70. The rating cut was announced after the close of regular trading. Duke fell 68 cents to $30.

Houston-based El Paso fell 94 cents to $22.30. The firm announced the SEC request after the close of regular trading. All trade on the New York Stock Exchange.

Williams shares plunged Wednesday after FERC threatened to ban the firm from setting prices on spot power and gas sales. The company failed to cooperate in a probe of allegations that traders manipulated prices during California’s energy crisis in 2000 and 2001, the commission said.

“We really want to open our records and make people understand we stand by our word, and our word is that we didn’t do it,” Williams spokeswoman Paula Hall-Collins said.

Charlotte-based Duke included about $1 billion of energy trades in its financial statements over three years that had no economic benefit and were similar to those used by rivals, the firm said last month.