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Altra 'In Talks' to Partner With Energy Consortium

Altra 'In Talks' to Partner With Energy Consortium

Houston-based Altra Energy Technologies, a leading independent provider of electronic trading products for the energy industry, may soon put even more distance between itself and the rest of the pack in the frenzied race to be the best and foremost in online energy trading.

Altra currently is "in talks" with a consortium of six major energy companies that in April announced plans to form an Internet-based, business-to-business (B2B), over-the-counter energy trading platform by the end of the year, which would be open to all wholesale energy industry participants.

Reports that Altra is negotiating to be the technology provider for the six companies are "correct," said an Altra spokeswoman, "but I don't think that anything has been signed." She said she could not confirm a report that Altra has reached agreements with all but two of the companies.

The six companies read like the Who's Who of the gas and electricity industries --- American Electric Power, Aquila Energy, Duke Energy, El Paso Energy, Reliant Energy and Southern Company Energy Marketing.

Based on volume, they are among the top 10 natural gas or electric marketers or both. All told, the six companies sold 1,062 MMWh out of the total 2,658 MMWh marketed by the top 20 power marketers in 1999. They marketed more than 40 Bcf/d of natural gas, nearly one-third of the 134 Bcf/d sold by the top 20 marketers last year.

If Altra should cinch this deal, it indeed would distinguish itself as the premiere company for online energy trading. Some believe the company, which has more than 6,000 customers worldwide, holds that title already. Recently, AMR Research named Altra as the No. 1 independent trading exchange across all major vertical industries, and Red Herring Magazine --- which focuses on the technology industry --- included Altra in its annual list of the top 50 private and top 50 public companies in the technology field.

Altra has been building its online trading systems for natural gas and electric products since 1996, when it was formed by Williams and PanEnergy (now Duke Energy). The online energy trading field, however, has become very crowded in the last six to seven months, with energy company after energy company taking a sudden interest in it. The movement kicked into overdrive last November with the start-up of EnronOnline and Coralconnect, and the release of a report by Forrester Research predicting natural gas online trades would hit $166 billion and online power trades would total $101 billion by 2004.

The energy industry's fervor for online trading shows no signs of petering out anytime soon. In April, Dynegy and Williams announced their intention to invest $25 million each for a minority equity stake in eSpeed Inc. The companies plan to use the eSpeed technology to develop an interactive marketplace for the trading of commodities, such as natural gas, electricity, natural gas liquids, petrochemicals, crude oil and bandwidth.

And in March, Williams Energy Marketing & Trading announced it was buying an undisclosed minority stake in Houston Street Exchange, a Web-based power trading exchange that Williams believes will be actively taken up by the energy trading community.

Susan Parker

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