The first commercial Internet-based electronic power tradingsystem was unveiled last week by QuickTrade, developer of asuccessful electronic gas trading system. Streamline, QuickTrade’sbiggest competitor, is expected to follow suit in the next fewweeks. The QuickTrade system is equipped to handle forward tradesat 13 hub locations across the U.S. and one in Canada, and so farhas attracted the interest of about 35 traders, 20 of which havesigned up to begin utilizing the system.

“Like any new system it has a growth period to get the traderscomfortable. But it’s definitely moving at a faster pace than[QuickTrade’s electronic] gas trading system, [which was launchedfive years ago],” said David Hanson, QuickTrade’s vice president ofmarketing. “It took us almost six months to get 20 customers on thegas system. But when we first started the gas side we were sellingtwo things: one, the system, and two, the concept of tradingelectronically. Now we’re just selling the system.”

The electric system is expected to gain liquidity much fasterthan the gas system. Hanson expects the power system to handleabout 30-40 trades per day within the next four months with up to100 MW/day changing hands. The system currently is equipped to dealwith trading volume in up to 25 MW increments.

About 250 customers currently trade nearly 3 Bcf/d onQuickTrade’s gas system and another 100 people log in for pricediscovery. Hanson said the system handles about 150 transactionsand up to 1,000 listings (bids and asks) each day.

QuickTrade is handling the power system somewhat differentlythan it approached the gas side. On the power system, it will actas a broker, matching anonymous traders but then identifying thetwo parties so they can complete their transaction. On the gassystem, QuickTrade actually takes title to the gas and completesthe trade with the parties remaining unidentified throughout theprocess. Hanson said the brokering method was chosen to smooth thestart-up, but if participants request anonymous matching, the powersystem might be converted at a later date.

There is a monthly fee for subscribing to the power system witha one cent per MWh incremental trading rate. However, currentlyQuickTrade is offering free trial subscriptions to build liquidity.The monthly fee on the gas system is $1,500 with an incrementalcharge of 0.25 cents/MMBtu.

QuickTrade is owned by Dynegy Inc., Nicor Inc. and SempraEnergy.

Rocco Canonica

©Copyright 1998 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.