Four energy companies to launch business-to-business exchange

Four leading energy companies are introducing an easier, faster way to reserve, schedule and move wholesale energy.
American Electric Power, Carolina Power & Light, Duke Energy and Unicom plan to launch an independent, Internet-based electric transmission business-to-business exchange that offers a single gateway, or portal, for arranging transmission capacity. The transmission exchange will be open for use by any group in the energy industry, including power marketers, merchant generators, electric utilities, municipalities, electric co-operatives and energy aggregators. Customers also will include Independent System Operators (ISOs) and Regional Transmission Organisations (RTOs) as they are formed across the United States.
Collectively, the four companies transported approximately 100 mm MW-hours of wholesale energy across their transmission systems in 1999. The companies operate and manage more than 60,000 miles of transmission lines. According to the companies, more than $ 4.5 bn in revenue was generated industry-wide in 1999 from wholesale energy transported in the United States.

By using an online e-marketplace, the transmission exchange will provide more timely, accurate decisions and expedited buy-sell transactions. Currently, transmission providers frequently use a commercial bulletin board called an Open-Access Same-Time Information System, or OASIS, to post approved transmission reservations and available transfer capacity. More than 170 OASIS sites exist across the United States. Multiple transactions are often required before a customer can ultimately move energy, as the reservation and scheduling process involves multiple transmission providers across diverse geographic areas. By using an external host, or application service provider (ASP), the transmission exchange will consolidate these transactions into one.
Additionally, the transmission exchange will produce a more transparent electric transmission marketplace. Customers of the exchange will be able to resell -- and purchase -- unused transmission reservations. The exchange also will allow information sharing on the functioning of transmission markets across the country. The consortium's initial focus is on completing the definition of the exchange's service offerings, selection of technology and aggressively moving toward business incorporation and service initiation.

It is anticipated that the new, independent company will be formed in the third quarter 2000. The exchange would be operational by year-end. The Boston Consulting Group has been selected to assist in the development of the exchange and the selection of the technology provider.
"This Internet-based transmission platform will simplify energy transactions and improve market liquidity," said Craig Baker, senior vice president of public policy, AEP. "This consortium is creating a system that brings the 'one-stop shopping' concept to transmission, allowing seamless scheduling across multiple systems. We believe this concept is in alignment with the next steps for OASIS as discussed recently by the Federal Energy Regulatory Commission."
"CP&L's goal in joining this consortium is to help foster a more robust wholesale power market through the utilisation of Web-based technology," said Erik Hansen, CP&L's vice president of system planning and operations. "It will allow us to streamline the existing transmission process, providing energy buyers and sellers with a more dynamic and efficient environment to trade and schedule power flow."
"Over the past several years the energy industry has made rapid progress that has enabled electric generation and distribution to develop into more liquid markets," said A.R. Mullinax, chief e-business officer, Duke Energy. "Using the resources of the Internet, we are now seeing opportunities emerge in the transmission area that will ultimately provide customers the energy they need, when they need it."
"The OASIS systems in operation are almost four years old, difficult to use, and are limited in terms of the information that can be posted on them," said Vito Stagliano, vice president of transmission policy, planning and service, Unicom. "This venture will develop a next generation system marketable to newly forming Regional Transmission Organisations that are expected to emerge as a result of FERC Order 2000."

American Electric Power is a multinational energy company based in Columbus, Ohio. AEP is one of the United States' largest generators of electricity with more than 38,000 MW of generating capacity. AEP is also one of the nation's leading wholesale energy marketers and traders. AEP delivers electricity to more than 4.8 mm customers in 11 states -- Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia.
The company serves more than 4 mm customers outside the United States through holdings in Australia, Brazil, China, Mexico and the United Kingdom. Wholly owned subsidiaries are involved in power engineering and construction services, energy management and telecommunications.

Headquartered in Raleigh, NC, CP&L provides electricity and energy services to 1.2 mm customers in North Carolina and South Carolina and provides natural gas distribution and service, through its wholly owned NCNG subsidiary, to about 178,000 customers in eastern and southern North Carolina. The company owns and operates a system of 18 power plants in the Carolinas and Georgia. CP&L's diversified operations include application service providers (ASP) Interpath and statusgo.com, and Strategic Resources Solutions (SRS), an integrated facility and energy management solutions company.

Duke Energy, a diversified multinational energy company, creates value for customers and shareholders through an integrated network of energy assets and expertise. Duke Energy manages a dynamic portfolio of natural gas and electric supply, delivery and trading businesses -- generating revenues of nearly $ 22 bn in 1999.

Incorporated in 1994 and based in Chicago, Unicom Corporation is a public company dedicated to meeting the energy needs of residential, commercial, industrial and wholesale customers. With approximately 15,000 employees and nearly $ 7 bn in revenues, Unicom is the parent holding company to Commonwealth Edison (ComEd), its principal subsidiary, and Unicom Enterprises Inc. (UEI), offering competitive energy-related products and services. Engaged principally in the production, purchase, transmission, distribution and sale of electricity to retail and wholesale customers, ComEd provides service to more than 3.4 mm customers across Northern Illinois, or 70 % of the state's population.