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The wholesale energy market is where we buy fuel for our power plants and sell their output. Our sales and marketing activities allow us to buy energy at the lowest possible cost and sell it at the highest fair price, providing higher returns on our investment in merchant plants and other energy infrastructure.
And sales and marketing are critical to the efficient movement of energy in the wholesale marketplace. These activities bring reliable, fair-priced energy to our customers, when and where they need it, along with energy-related products and services.
Most of our market transactions are related to our assets, or conducted on behalf of our customers. We do little proprietary trading, which involves buying and selling energy commodities to profit from price fluctuations. In 2002, only about 10 percent of Duke Energy North America’s gross margin was the result of proprietary trading.
Some companies have exited the business, true, but we’re seeing new entrants, especially banks and oil companies. We welcome those new market participants, their confidence in this business and the liquidity they bring back to the energy marketplace.
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