Houston-based Altra Energy Technologies, a leading independentprovider of electronic trading products for the energy industry,may soon put even more distance between itself and the rest of thepack in the frenzied race to be the best and foremost in onlineenergy trading.

Altra currently is “in talks” with a consortium of six majorenergy companies that in April announced plans to form anInternet-based, business-to-business (B2B), over-the-counter energytrading platform by the end of the year, which would be open to allwholesale energy industry participants.

Reports that Altra is negotiating to be the technology providerfor the six companies are “correct,” said an Altra spokeswoman,”but I don’t think that anything has been signed.” She said shecould not confirm a report that Altra has reached agreements withall but two of the companies.

The six companies read like the Who’s Who of the gas andelectricity industries — American Electric Power, Aquila Energy,Duke Energy, El Paso Energy, Reliant Energy and Southern CompanyEnergy Marketing.

Based on volume, they are among the top 10 natural gas orelectric marketers or both. All told, the six companies sold 1,062MMWh out of the total 2,658 MMWh marketed by the top 20 powermarketers in 1999. They marketed more than 40 Bcf/d of natural gas,nearly one-third of the 134 Bcf/d sold by the top 20 marketers lastyear.

If Altra should cinch this deal, it indeed would distinguishitself as the premiere company for online energy trading. Somebelieve the company, which has more than 6,000 customers worldwide,holds that title already. Recently, AMR Research named Altra as theNo. 1 independent trading exchange across all major verticalindustries, and Red Herring Magazine — which focuses on thetechnology industry — included Altra in its annual list of thetop 50 private and top 50 public companies in the technology field.

Altra has been building its online trading systems for naturalgas and electric products since 1996, when it was formed byWilliams and PanEnergy (now Duke Energy). The online energy tradingfield, however, has become very crowded in the last six to sevenmonths, with energy company after energy company taking a suddeninterest in it. The movement kicked into overdrive last Novemberwith the start-up of EnronOnline and Coralconnect, and the releaseof a report by Forrester Research predicting natural gas onlinetrades would hit $166 billion and online power trades would total$101 billion by 2004.

The energy industry’s fervor for online trading shows no signsof petering out anytime soon. In April, Dynegy and Williamsannounced their intention to invest $25 million each for a minorityequity stake in eSpeed Inc. The companies plan to use the eSpeedtechnology to develop an interactive marketplace for the trading ofcommodities, such as natural gas, electricity, natural gas liquids,petrochemicals, crude oil and bandwidth.

And in March, Williams Energy Marketing & Trading announcedit was buying an undisclosed minority stake in Houston StreetExchange, a Web-based power trading exchange that Williams believeswill be actively taken up by the energy trading community.

Susan Parker

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