This is part of IEEE Spectrum’s special report: What’s Wrong—What’s Next: 2003 Technology Forecast & Review. On 3 October 2001, Enron Corp.’s chief executive officer Ken Lay was in his element, chairing a day-and-a-half, invitation-only conference on national energy policy at a swanky hotel just outside Washington, D.C. It was wall-to-wall policy types, just the sort of gathering in which the Ph.D. economist reveled. The giant Houston-based company once again was doing well in the stock market. It had recovered from a bad dive it took after the mysterious resignation of Jeff Skilling as CEO, which had forced founder Lay to resume the day-to-day management of the company, the most admired in the United States for several years running, according to Fortune magazine surveys. The future looked bright for Enron and its rivals in the intensely competitive business of selling electricity, natural gas, and financial products based on energy prices. In the previous decade, energy trading had emerged as the fulcrum of efforts to restructure electricity markets not only in the United States–something of a Johnny-come-lately to the game–but also in the United Kingdom, Norway, New Zealand, and Chile. The general idea was that transmission systems would be made open-access,…