QuickTrade Launches Electronic Power Trading System
The first commercial Internet-based electronic power trading
system was unveiled last week by QuickTrade, developer of a
successful electronic gas trading system. Streamline, QuickTrade's
biggest competitor, is expected to follow suit in the next few
weeks. The QuickTrade system is equipped to handle forward trades
at 13 hub locations across the U.S. and one in Canada, and so far
has attracted the interest of about 35 traders, 20 of which have
signed up to begin utilizing the system.
"Like any new system it has a growth period to get the traders
comfortable. But it's definitely moving at a faster pace than
[QuickTrade's electronic] gas trading system, [which was launched
five years ago]," said David Hanson, QuickTrade's vice president of
marketing. "It took us almost six months to get 20 customers on the
gas system. But when we first started the gas side we were selling
two things: one, the system, and two, the concept of trading
electronically. Now we're just selling the system."
The electric system is expected to gain liquidity much faster
than the gas system. Hanson expects the power system to handle
about 30-40 trades per day within the next four months with up to
100 MW/day changing hands. The system currently is equipped to deal
with trading volume in up to 25 MW increments.
About 250 customers currently trade nearly 3 Bcf/d on
QuickTrade's gas system and another 100 people log in for price
discovery. Hanson said the system handles about 150 transactions
and up to 1,000 listings (bids and asks) each day.
QuickTrade is handling the power system somewhat differently
than it approached the gas side. On the power system, it will act
as a broker, matching anonymous traders but then identifying the
two parties so they can complete their transaction. On the gas
system, QuickTrade actually takes title to the gas and completes
the trade with the parties remaining unidentified throughout the
process. Hanson said the brokering method was chosen to smooth the
start-up, but if participants request anonymous matching, the power
system might be converted at a later date.
There is a monthly fee for subscribing to the power system with
a one cent per MWh incremental trading rate. However, currently
QuickTrade is offering free trial subscriptions to build liquidity.
The monthly fee on the gas system is $1,500 with an incremental
charge of 0.25 cents/MMBtu.
QuickTrade is owned by Dynegy Inc., Nicor Inc. and Sempra
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