Electric Transmission Consortium Launches B2B Exchange
Hoping to foster a more robust wholesale power market, American
Electric Power (AEP), Carolina Power & Light (CP&L), Duke
Energy and Unicom Corp. are launching an independent,
Internet-based electric transmission business-to-business exchange
this fall that is expected to offer a single portal for arranging
transmission capacity. Still to come are the consortium's service
offerings and the type of technology it will use.
Power marketers, merchant generators, electric utilities,
municipalities, electric cooperatives and energy aggregators are
expected to gravitate to the new exchange, although it's designed
for use by any group in the energy industry. Future customers also
are expected to include independent system operators (ISOs) and
regional transmission organizations (RTOs).
The market is a big one - according to the four companies, more
than $4.5 billion in revenue was generated industry-wide in 1999
from wholesale energy transported in the United States. Last year,
the four members of the new consortium transported nearly 100 MM
MW-hours of wholesale energy within their separate transmission
systems. Combined, they operate and manage more than 60,000 miles
of transmission lines.
"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," said
Erik Hansen, CP&L's vice president of system planning and
operations. He said CP&L's goal in joining the consortium was
to build a better wholesale power market through Web-based
Craig Baker, AEP's senior vice president of public policy, said
the internet-based transmission platform will "simplify energy
transactions and improve market liquidity." He said the consortium
will create a "system that brings the 'one-stop shopping' concept
to transmission, allowing seamless scheduling across multiple
The on-line marketplace will take the place of the Open-Access
Same-Time Information System (OASIS) commercial bulletin board
through which utilities are required to, but often do not, post
approved transmission reservations and available transfer capacity.
More than 170 OASIS sites now exist in the United States. OASIS
often requires multiple transactions before a customer can move
energy, but with the Internet, the external host or application
service provider will consolidate the transactions into one.
The on-line system is expected to have a huge impact on the
next-generation system of RTOs, emerging at the Federal Energy
Regulatory Commission Order 2000. Along with giving customers the
ability to resell and/or purchase unused transmission reservations,
the exchange will provide information sharing on how transmission
markets are functioning across the country, offering a more
transparent electric transmission marketplace.
"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 at Duke Energy. "Using the resources of the
Internet, we now are seeing opportunities emerge in the
transmission area that will ultimately provide customers the energy
they need when they need it."
The B-2-B consortium is diverse. AEP, headquartered in Columbus,
OH, has more than 38,000 MW of generating capacity, delivering
electricity to more than 4.8 million customers in 11 states.
CP&L, based in Raleigh, NC, provides electricity and energy
services to 1.2 million customers in North Carolina and South
Carolina, and also provides natural gas distribution and service
through subsidiary NCNG to about 178,000 customers in eastern and
southern North Carolina.
Headquartered in Charlotte, NC, Duke Energy is a diversified
multinational energy company that manages a portfolio of natural
gas and electric supply, delivery and trading businesses. Chicago's
Unicom Corp. is the parent holding company of Commonwealth Edison
Co. (ComEd) and Unicom Enterprises, and is engaged in the
production, purchase, transmission, distribution and sale of
electricity to about 3.4 million customers in Northern Illinois.
Carolyn Davis, Houston