ICE's Energy Trading is Building a Full Head of Steam
Infant online trading system Intercontinental Exchange (ICE) continues
to rack up impressive results, posting over 95 Bcf of physical gas trading,
along with almost 970 Bcf of financial gas trading and 40 million MWh of
power dealing in its first six and a half weeks of commercial operation.
In comparison, 240 Bcf of combined physical and financial gas trades
were done and six million MWh were transacted in the first week of trading
on the ICE.
"This is extremely rapid growth from our perspective in a very
short period of time," said Janine McArdle, president of the sponsoring
energy consortium which includes: American Electric Power; Aquila Energy;
Duke Energy; El Paso Energy; Reliant Energy; and Southern Company Energy
"There are currently right now over 4,000 physical and financial
natural gas and power products available for trading on the system,"
"One of the critical success factors with any system is its ability
to provide all industry participants access to trading in both the short-term
and long-term market product. Most recently with the price volatility and
weather patterns that we have been experiencing, access to these various
markets has been invaluable. We've seen that as evidenced by a rapid growth
in both the daily and near term traded markets both for power and for gas."
The exchange has expanded its user-base at a wildfire's pace as well.
Starting six weeks ago with only the partner companies making energy transactions,
the system has now grown to 90 different participants including marketers,
producers, utilities and end users.
McArdle also said that the electronic back office was nearing completion.
Not only have the original partner firms started to utilize the electronic
link between their systems and the ICE system to gather and process their
companies trading activities, but non-partner firms also have begun to
show interest in electronically linking their systems to ICE to gather
similar information, said McArdle. "From our perspective, we expect
to continue to see an increase in the volume of energy traded on the system,"
The six energy powerhouses formed the Energy Trading Platform Holding
Company (ETPHCo.) in April in an effort to create an independent power
and gas trading exchange (see NGI, April 17).
Instead of building their own, the company purchased an interest in Atlanta-based
Intercontinental Exchange in July (see NGI, July
31). The ICE exchange initially was launched in March with backing
from BP Amoco, Royal Dutch Shell Group, Societie Generale Investment Banking,
Totalfina Elf Group, Deutsche Bank, Goldman Sachs and Morgan Stanley Dean
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