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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 technology.
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 systems."
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
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