Is Google the Next Enron?

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Is Google (Nasdaq: GOOG  ) about to go all Enron on us?

The Big G was just approved by U.S. energy regulators to trade electric power in bulk on the open market. That license usually belongs to utility businesses like Dynegy (NYSE: DYN  ) or Florida Power & Light (NYSE: FPL  ) -- you know, the kind of companies you might expect to trade electricity. What is Google up to now? Will Mountain View become an energy-trading hub built around some crazy algorithm a Google engineer built in his 20% time?

I don't think so. A Google spokeswoman explained that "we made this filing so we can have more flexibility in procuring power for Google's own operations, including our data centers. FERC authority will improve our ability to hedge our purchases of energy and incorporate renewables." Google sure sucks down a lot of power to its worldwide web of data centers and server trailers, even after you account for the solar panels installed at the Googleplex. Taking a more active part in how it buys that power makes sense.

Google is far from the only surprising find among approved American power traders. Grocery store giant Safeway (NYSE: SWY  ) is one, too, alongside consumer-products veterans Georgia Pacific and Kimberly-Clark (NYSE: KMB  ) . You'll also find mining specialists and large paper mills on that list. All of that makes sense, since these are some of the largest consumers of electric power anyway.

It's a little bit less comforting to see banking colossi like Citigroup (NYSE: C  ) and Bank of America (NYSE: BAC  ) among the approved power brokers. I wouldn't expect Google or Safeway to bundle and resell the power they buy, but money-center banks likely see just another commodity to trade for profit. I just hope that the non-electric entities that do play the power-trading game learned something from Enron's collapse, and that they aren't tempted to stretch their accounting to the breaking point.

And if Google ever announces that it plans to resell power rather than just buying on its own terms, I'll take a long, hard look at my holdings in the company. Down that road lies temptation and ruin.

Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. Google is a Motley Fool Rule Breakers recommendation. Otter Tail is a Motley Fool Hidden Gems selection. Kimberly-Clark is a Motley Fool Income Investor recommendation. The Fool owns shares of FPL Group. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.

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