Online trading opportunities for energy companies will growexponentially in the future, offering increased price transparency,trading opportunities, volumes of trades and less congestion in themarketplace. To work well, however, the marketplace has to providean efficient pool of opportunity and neutral platforms, said twoonline energy trading platform executives yesterday.

Speaking to analysts in Houston at the Dain Rauscher WesselsEnergy Conference, True Quote’s COO Christopher S. Edmonds andHoustonStreet vice president Kevin Sluder said their companies werecommitted to open access platforms, which would help online tradingbecome more efficient and more available.

Energy companies’ belief in online trading success is evident,they said, pointing to the growing number of companies that havebegun operating their own platforms or that have partnered up tooffer online trading.

“Online trading is a better way to do business,” said Sluder.”It provides a completely level playing field.” Voice brokertrading, though still admittedly strong and popular, is at adisadvantage, both said, because it doesn’t operate in real time,is less efficient and offers a smaller field of participation..

That playing field also is expanding, and both said that theircompanies and their partners are becoming more web-focused, movingfrom voice trading to online trading at a rapid pace. By 2004,HoustonStreet, based in Portsmouth, NH, expects to havetransactions totaling $920 million, based less on liquidity andmore on the actual value of “per megawatt” or “per barrel.”

“Our mission is to be how energy companies do business,” Sludersaid, saying that his company’s long-term vision was to make theInternet the “channel of choice” for energy traders.

At True Quote, Edmonds said the definitive agreement announcedyesterday with Enron puts its transaction estimates up in the air.In the next “few weeks,” he said, True Quote and Enron will go livein natural gas and electricity. “We are building models as wespeak,” he said. PG&E National Energy Group also said yesterdayit would provide an undisclosed equity investment in the company.

Under the EnronOnline deal, True Quote customers will benefitfrom EnronOnline’s liquidity through a seamless electronicconnection between the two systems. The connection will allow TrueQuote customers to thus gain access to the independent marketcenter operated by Enron. Under the agreement, True Quote willreceive prices from Enron Online on natural gas, electricity andcoal, with the possibility of expanding into other commodities inthe future. No True Quote information will be available on EnronOnline, the company said.

Edmonds said Houston-based Enron and Louisville, KY-basedTrueQuote now are working to put the technology into place for theconnection.

“We’re betting on the future,” said Edmonds. “As the technologycontinues to evolve, we will evolve to meet our customers’ needs.”

Sluder said that HoustonStreet also was working on what “trulycreative things” the online platforms could do for customers thatthe customers could not do before. Offering creative choices willgrow the customer base.

“Customers have a choice of where they buy books, where they buyclothes. They have no choice on energy,” Sluder said. “If we cancome up with a brand new web idea to leverage their energy choices,that’s what we’d like to do.”

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