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QuickTrade Launches Electronic Power Trading System

QuickTrade Launches Electronic Power Trading System

The first commercial Internet-based electronic power trading system was unveiled last week by QuickTrade, developer of a successful electronic gas trading system. Streamline, QuickTrade's biggest competitor, is expected to follow suit in the next few weeks. The QuickTrade system is equipped to handle forward trades at 13 hub locations across the U.S. and one in Canada, and so far has attracted the interest of about 35 traders, 20 of which have signed up to begin utilizing the system.

"Like any new system it has a growth period to get the traders comfortable. But it's definitely moving at a faster pace than [QuickTrade's electronic] gas trading system, [which was launched five years ago]," said David Hanson, QuickTrade's vice president of marketing. "It took us almost six months to get 20 customers on the gas system. But when we first started the gas side we were selling two things: one, the system, and two, the concept of trading electronically. Now we're just selling the system."

The electric system is expected to gain liquidity much faster than the gas system. Hanson expects the power system to handle about 30-40 trades per day within the next four months with up to 100 MW/day changing hands. The system currently is equipped to deal with trading volume in up to 25 MW increments.

About 250 customers currently trade nearly 3 Bcf/d on QuickTrade's gas system and another 100 people log in for price discovery. Hanson said the system handles about 150 transactions and up to 1,000 listings (bids and asks) each day.

QuickTrade is handling the power system somewhat differently than it approached the gas side. On the power system, it will act as a broker, matching anonymous traders but then identifying the two parties so they can complete their transaction. On the gas system, QuickTrade actually takes title to the gas and completes the trade with the parties remaining unidentified throughout the process. Hanson said the brokering method was chosen to smooth the start-up, but if participants request anonymous matching, the power system might be converted at a later date.

There is a monthly fee for subscribing to the power system with a one cent per MWh incremental trading rate. However, currently QuickTrade is offering free trial subscriptions to build liquidity. The monthly fee on the gas system is $1,500 with an incremental charge of 0.25 cents/MMBtu.

QuickTrade is owned by Dynegy Inc., Nicor Inc. and Sempra Energy.

Rocco Canonica

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