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Dynegydirect Muscles Into Online Trading Scene

Dynegydirect Muscles Into Online Trading Scene

Houston-based Dynegy Inc., setting itself up as likely competition for current online trading king EnronOnline, has launched Dynegydirect, its own B2B trading site for energy and communications commodities. The new system will give its customers self-service access to bid and offer prices across U.S. power, natural gas and natural gas liquids products.

CEO Chuck Watson said the site would extend the company's "global reach through customized electronic solutions."

Dynegy has been quickly building up its Internet presence this year. In April, the energy marketer invested $25 million in a joint venture with Williams to obtain a minority stake in B2B developer eSpeed Inc. (see NGI, May 1). Then, in September, Dynegy said it would become a partner in TradeSpark, developed by eSpeed, that offers open access commodity trading (see NGI, Oct. 2).

Dynegydirect will complement the TradeSpark partnership, said Matt Schatzman, president of Dynegy's energy trading unit. "Dynegydirect will offer what you can now do on a telephone and now do it on the Internet," Schatzman said. "It will be more efficient, and offer more information in real time."

Whereas TradeSpark offers a neutral exchange and large standard blocks for trading, Dynegydirect will be more customized for Dynegy customers, who will be able to pick and choose what they want, including what size trades they want to perform. There will be no minimum trade volume on Dynegydirect, Schatzman said. "This site will offer more of a focus to our direct customers, and offer more specialization."

Eventually, Schatzman said that Dynegy would like all of its customers to trade via the Internet. However, he said the company has not set any specific volume numbers on how much business it expects to capture through its site. "We do expect the Internet business to grow, but we will leave that to the customer." He said the telephone broker services will continue as before, as long as customers want them.

Similar to other energy B2B trading sites, the Dynegy model will offer a trading "floor." The configurable floors will enable customers to group products in a customized way for easy access. No limit will be placed on the number of floors that may be established, and multiple floors can be tiled on the monitor for full viewing.

In the near future, the site also will offer news and other services, which customers also may customize. Already, Dynegy has begun registering all of its existing customers and expects to have them all registered to trade by the end of the year.

Available now to U.S. customers, Dynegy plans to make the site available globally in the coming months. The first expansion will be into the United Kingdom, where power and natural gas, coal, emission allowances, weather derivatives, international natural gas liquids and bandwidth will be offered.

Dynegy customers and new users can preview the site, and also register for trading at Schatzman said that it will take about 10 days to complete the registration process and then the site will go live.

Carolyn Davis, Houston

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