It May surprise you to learn that people are making money out of your weather. When the temperature soars, so does their bank balance-if they've invested wisely. While you were cursing the unseasonal frost that killed off your spring vegetables, they had just earned the deposit on a new BMW. Of course, some of them take a big hit once in a while: a freak storm that whips the roof off your house can also wipe out a significant chunk of their profits. But that's the risk you take when you are a weather trader. You have probably heard of trading on oil, bonds and coffee. You may not be aware that the weather has recently joined these commodities in the marketplace. If you invest in rainy days (and get your forecasts right), you can make them pay your bills. Meteorologists of the world, rejoice. If this all sounds like a new way to make money out of nothing, just wait till you hear who kicked it off: a Texas-based power-generating company called Enron. In the summer of 1996, Florida Power & Light, who buy energy from generators and then sell it on to homes, wanted to guarantee its profits for the season. They knew they could buy a set number of megawatts at a set price from the generator, but who knew how many watts they'd be able to sell? If the summer was too cold for people to run their air conditioners they'd have power left over that would dribble away unsold. And if it was too hot they would have to buy extra power at exorbitant prices on the open market. So Enron sold them a power contract, guaranteeing a reasonable pre-set price per megawatt for the amount of power they'd need on any given day whatever the temperature. Florida Power & Light got the security of a fixed price, and Enron got a tiny bit more for their power on an average day than they would without the contract.
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