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Six Utilities Form Energy E-Procurement Site

Six Utilities Form Energy E-Procurement Site

CMS Energy, Ameren Corp., KeySpan and UGI Corp. have joined Allegheny Energy, Allete (formerly Minnesota Power) and PPL Corp. in the formation of Enporion Inc., a global e-procurement exchange for the energy industry. The companies see the potential for big savings in pooling their buying power over the new exchange.

"This is a major step in taking advantage of technological capabilities to unlock superior buying power, which will achieve purchasing savings and bring more value to our shareholders," said CMS Chairman William T. McCormick. "All energy utilities will be able to use this global partnership for their benefit."

The global partnership will focus on building cost-effective relationships between buyers and sellers. Both buyers and sellers should see reduced cycle times, lower inventories, lower transaction costs and enhanced profitability, the companies said.

Enporion is scheduled for commercial operation by the end of this year. The Enporion partnership is similar to what 21 utilities, including Unicom, Reliant, Southern, Sempra, AEP, ConEdison, Entergy and others, did in June with the formation of Pantellos Corp. The Pantellos sponsors hired Commerce One as their primary technology partner. Pantellos, with an initial capitalization of $100 million, is scheduled to begin operation early next year.

CMS's Thomas Burnham, manager of purchasing, said Pantellos is not open to any more investors. "We thought that Enporion gave us the best opportunity to both be an investor and get the benefits of process and product savings."

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