Need a reason to embrace the future of the power industry? Howabout 10 reasons? Several U.S. utility executives last week offeredtheir upbeat take on the power generation and natural gas outlookfor the next five years, with El Paso Energy, Reliant Energy,Dynegy Inc. and Williams Energy Services giving a birds-eye view ofwhat’s ahead during a forum at PowerMart 2000 in Houston.

Though the problems facing the power business today will besimilar in the years to come, companies that succeed will be theones willing to not just change, but willing to take the lead toensure success for themselves and their shareholders.

Companies able to deal with the myriad changes, including aburgeoning e-commerce economy, a persistent labor shortage and acontinuing need to update technological skills present moreopportunities than problems, said Gar Seifullin, managing directorof El Paso Energy Power Finance.

“There’s a lot more entrepreneurial vigor, and over time, ourindustry has the ability to change,” Seifullin said. “We have totake the opportunities we find to market. Entire new businesses aredeveloping, but the impact of true competition is yet to be felt.”

Griff Jones, vice president of Dynegy’s power trading group forthe Midwest and southeastern part of the United States, said thatboth the power and gas markets have the potential for tremendousgrowth in the next few years. However, even more than thosemarkets, the communications arena appears to hold even morepotential.

“Power, gas and communications markets work together very well,”Jones said, referring to the growing telecommunications andbandwidth industries. “Energy and technology convergence is a neatthing. Communications is just a transplant from energy.” Jones saidthat e-business is the “opportunity for us to transfer and grow ourbusiness.”

Three years ago, Reliant Energy took its first steps into thewholesale market, said Joe Bob Perkins, COO of the wholesale group.”We started at zero,” said Perkins. Before entering the wholesalemarketplace, Reliant decided to develop strong commercialportfolios in attractive regions, and found “multiple” ways to win.”We’re not a one-trick pony,” he said.

By developing a regional trading portfolio, Reliant was able topinpoint favorable supply and demand dynamics, attractive marketrules and competitive positioning in the regions it targeted. Now,Reliant, which had already become a leading utility, owns about30,000 MW throughout the country. Because this strategy has workedso well, Perkins said Reliant would continue to focus on regionalopportunities.

“The leaders will get larger, but only a handful will be able todo this,” said Perkins. “All told, I see our commercial advantagein actively participating in the market with both an asset book anda trading book. You have to meet the total needs of the customer.”

The future of energy, at least from Williams’ point of view, issummed up in the “seven Cs” said Dean Jones, vice president ofstrategic business relations. Competition, customer choice,convergence, consolidations and constant change “churn up theperfect storm,” he said. By looking at other industries that havegone through some of the same things facing the power market today,Jones said that utilities companies could learn a few lessons.

“Deregulation is going to take a little bit of time to sort out,as far as competition. And customers want choice. We are close tohaving the technology in place to know what they want, and this isa critical piece of information to be successful in the future,”said Jones.

He also warned that the future “holds more consolidations. It’snot over.” With “constant change, which is inevitable, this willcreate opportunities.” But Jones warned that because power and gasare more dependent on each other than ever before, “we need to becognizant of the changes to make sure the infrastructure is inplace to guarantee success.”

Carolyn Davis, Houston

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