California-based Automated Power Exchange (APX) announced lastweek that it has developed new Internet-based, real-timeelectricity market products that will allow it to provide combinedpower exchange and regional transmission operator (RTO) services inother states, regions and countries that open their electricitymarkets to competition. One feature of what APX is calling “Market2000” will allow end-users to trade power to buffer the negativeimpact of summer price spikes.

Most immediately, APX hopes its new electronic platform,offering power trading down to five-minute increments, will give itthe inside track to become the independent grid administrator inNevada when it finally opens its markets, and in Ohio and Illinoiswhich are now in the process of opening up.

“The flexibility of this platform opens up the opportunity tooperate in many different markets, in many different parts of theglobe to trade a whole variety of electricity products,” said EdCazalet, CEO and founder of APX. He contends the new system is muchfaster and cheaper than any of its competitors. “So we are preparedto quickly expand our markets wherever there is a need among marketparticipants. This is all part of what is going on in thedevelopment of business-to-business e-commerce.”

The combined operating costs for California’s power exchange(Cal-PX) and the marketing part of its grid operator (Cal-ISO)amount to about 70 cents/MWh, Cazalet said. Comparatively, the newAPX platform, providing both functions, costs about 14 cents/MWh.

APX is seeking to be a one-stop shop for not only traders, butalso generators and endusers, and it will allow the large users totrade to avoid the full impact of summer price spikes by sellingunused, high-priced power to offset some of their power costs.

“We’re trying to become the true end-to-end solution as opposedto just being simply a trading platform,” Cazalet said.

In an unrelated development last week, APX received anunfavorable ruling from the DC Circuit Court of Appeals on itslong-standing contention that it — unlike the state-createdCalifornia PX — should not be regulated by the Federal EnergyRegulatory Commission. Undaunted, Cazalet said FERC should have nojurisdiction over his private sector exchange.

APX contends that since FERC clearly wants to have jurisdictionover the state-created Cal-PX, it did not want to assert somethingdifferently for the APX operations. APX, on the other hand, hasargued that it is no different than a broker in a regulatorycontext, and therefore, FERC should not have any jurisdiction overits operations. Brokers are not regulated by FERC.

Richard Nemec, Los Angeles

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