Wouldn’t it be nice to trade power knowing you could quicklyexit the market unscathed when other less fortunate souls are beingwiped out by extreme volatility and soaring prices? That’s whatdesigners say two new electronic power trading systems offer.

A week after rival QuickTrade, a partnership of Dynegy, SempraEnergy and NICOR, launched its new electronic power trading system(See NGI, July 13, p.9), Altra Energy Technologies followed suitwith Streamline for Power, a real-time trading system for wholesaleelectricity. The two systems have arrived on the market just weeksafter a tumultuous period, in which skyrocketing power pricesforced several marketers to default and many others to suffer bigfinancial losses. If only they could have seen the market in realtime, some of those losses may have been avoided, said H. MatthewFrye, Altra’s vice president of electronic trading.

Altra said its system should provide users a certain amount ofprotection in the unpredictable and often volatile power market. Ifyou see a storm coming, just click and drag with the mouse and yourpositions are off the screen and you are out of the market.

“Through real-time information and processes, such as validatedprice discovery and pre-approved counterparties, Streamline forPower can minimize the likelihood of flagrant price swings,” saidFrye. Streamline operates as a broker, matching customers whodecide to accept each others’ terms and prices and identifying thetwo parties when they agree to a deal. Users still decide with whomthey trade.

Frye said he expects the power market to take up the systemeagerly. “Four years ago, when Altra introduced Streamline for Gas,electronic trading was a new concept,” he said. “In today’s rapidlyevolving power market, the demand for quick, easy-to-use tradingtechnology has created high interest in Streamline for Power. Sincewe announced the product in May, 33 power marketers have committedto using Streamline for Power, and we anticipate adding 25 or morein the third quarter.”

That’s a much faster acceptance rate than what Streamlineexperienced when it launched its electronic gas trading system fouryears ago. Today, about 250 users trade 2.5 Bcf/d of gas onStreamline. The system has become a quick and easy method to lineup standard term deals for the winter, said Frye. It also carries asteady stream of day trades. Frye said while 75% of the gas dealsare very short term, 75% of the volumes are longer term.

Streamline for Power offers power traders a forward-market focuswith the ability to trade a variety of terms, ranging from outmonth transactions, down to day trades and the hour-ahead market.The system costs users $750/month with an incremental transactioncharge of 1 cent/MW. It provides trading at all major power tradingpoints in North America, including Palo Verde, COB, PJM, ERCOT,ECAR, Entergy, Cinergy and Ameren. Once a trade is consummatedbetween pre-approved counterparties, each party is revealed to theother for the first time and receives automatic electronic andfaxed confirmation of the deal.

Rocco Canonica

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