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DukeSolutions Begins Online Auctions to Cut Costs
To help its clients reduce the costs of doing business, DukeSolutions Inc., headquartered in Charlotte, NC, began using online energy auctions last week to lower the cost of natural gas, reduce procurement charges and speed up contract executions for its 20 client facilities in the Midwest.
DukeSolutions said several natural gas suppliers that deliver most of the services to industrial end users in the region participated in the first online auction last Monday, using FreeMarkets Inc. The auction was done in real time.
"Combine Duke Energy's e-commerce initiatives, including online auctions for other products, and services with DukeSolutions' knowledge of the retail energy market and we project significant savings for our clients on the purchase of natural gas and electricity delivered through web-based, reverse auctions," said Keith G. Butler, COO of DukeSolutions.
Max Scoular, director and general manager of energy and process industries at FreeMarket, said that since 1995, his company estimates it has saved other companies about $1.5 billion using the auction system.
In the online energy auctions, DukeSolutions will use auction "lots" where client facilities will be grouped to create optimal savings based on the number and quality of suppliers, local rules and regulations, pipelines, electric transmission line constraints, distribution and transmission tariffs, facility loads and market prices. It then determines the winning criteria such as the ceiling price, financial stability and conformance with the contract terms. It also will identify, screen and attract suppliers and develop requests for proposals depending on what a customer needs.
DukeSolutions is a wholly owned subsidiary of Duke Energy. More information about the company and the auctions is available at www.dukesolutions.com.
Carolyn Davis, Houston
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