Usability Views Article Details
 home | timeline | recent | popular | e-reports | userati | books | about 

How IT Mediates Organizations: Enron and the California Energy Crisis (13 Oct 2004)
On May 24 1999, 6:10 a.m., Timothy Belden, working from a computer on Enron Corp.'s trading floor in Portland, Oregon, entered four bids to sell power to the California power exchange. His proposal to sell 2,900 megawatts on the next day, at $18 to $29 a megawatt-hours, was approved by the exchange authority. At 7:29 a.m., Belden announced to the state power grid that he would use the Silverpeak line, a terminal with a maximum capacity of 15 megawatts located in a Nevada desert town with the same name, to transfer the sold electricity. This single announcement confused the grid operators, caused a false congestion on the automated system that manages the state's transmission lines, allowed Belden to offer a series of counterbids to relieve the congestion, and raised the price of electricity by more than 70% across California. Californians paid about $5 million in added electricity charges that day, and Enron, which shared the profits with some of the local electricity operators, paid a penalty of $25,000 for its failed bid to the power grid.
A similar pattern of behavior was reportedly exhibited by Enron traders in other times and places, all modeled on Silverpeak, but variously given enigmatic names such as "Death Star", "Get Shorty", "Fat Boy" by Enron traders. Behind the enigma of the names, however, a common pattern of behavior was manifest: "the company pretended to flood transmission lines with excess power, and then earned fees for alleviating the nonexistent congestion by routing the electricity elsewhere". The aim of this paper is to try to make sense of these activities and the common pattern among them. The main question we want to answer is: "Why are some calculative agencies able to impose the events, actions and relations that other calculative agencies have to take into account in making their decisions?" (Callon 1998a). The purpose here is to apply the framework of actor-network theory (ANT) to better understand the dynamics of IT and organizational behavior, using the well-documented relation between Enron and the California energy market as a case study.
Article URL: http://jodi.ecs.soton.ac.uk/Articles/v05/i04/Ekbia/

Read 67 more articles from Journal of Digital Information sorted by date, popularity, or title.
Next Article: Introduction to Databases
 RSS 0.91 Subscribe with Bloglines Add to My Yahoo!
Some of the people who make up the Userati group
This site is a labour of love built by Chris McEvoy