Avista Corp. subsidiary Avista Advantage completed a painstakingevaluation of 30 retail energy e-commerce sites and narrowed downthe list to three top power exchanges that can handle aggregatedcustomer loads: Usource via Enermetrix, Excelergy and AMDAX. Avistasaid it intends to conduct a pilot program to evaluate the benefitsof buying power online for end-users using three of its largecustomers with multiple sites.
Avista Advantage, which is primarily a billing company, hasbecome the customer advocate and aggregator for large end-users whoare interested in getting the best bang for their buck in energye-commerce. Using its billing database to determine energy loads,Avista has electronically posted commodity bids on behalf ofseveral leading retail companies, including Starbucks. In total,the customer group represents nearly 400 sites in three deregulatedenergy markets. The results of the evaluation will determinewhether Avista should use the exchanges for a larger group ofclients, which now represent 50,000 sites across the United States,Canada and Puerto Rico.
“This breakthrough move affirms Avista Advantage’s ability toleverage its detailed customer information and data base intosomething of greater value,” said Chairman T. M. Matthews. “This isa clear demonstration of our core business model — leveragingdata on our client’s behalf — and this is just the start. Whileothers are only talking about buying energy through electronicexchanges, Avista Advantage has demonstrated that it can executethe posting of actual data on three different exchange platforms toassist our customers in getting improved market based pricing.”
“We’ve essentially pioneered an approach that createssignificant benefits for all involved,” noted Avista AdvantagePresident Gerry Crooks. “Avista Advantage has expanded itsstrategic relationships and service capabilities, our clients haveaccess to a valuable service that will assist them in successfullynavigating the deregulating energy environment, and the exchangesgain liquidity with every one of our clients that elect toparticipate.”
More than 30 electronic energy related entities callingthemselves “exchanges” were evaluated for participation in AvistaAdvantage’s initiative. Through an extensive review, AvistaAdvantage determined that the “typical exchange” grants control tocommodity sellers rather than buyers. Few exchanges supportbuyer-centric business models where Advantage’s clients — thebuyers — can retain control over the transaction, with theopportunity to review any offer and choose whether to proceed.
To this end, Advantage supports the “reverse-auction” formatthat searches for the lowest price for gas and electricity, andeffectively streamlines the buying process for buyers. The threeexchanges selected for the initial trial are market leaderscurrently executing energy transactions via the Internet, eachoffering a different business model, Avista said. All threeexchanges also have shown flexibility in supporting AvistaAdvantage’s customer-driven focus.
“We believe it is too early to lock into any one specific formatfor Internet based exchange buying, because all of the businessmodels, processes and technology are new and evolving,” said JohnBattista, director of commodity services for Avista Advantage. “Wewill continue to offer advanced energy solutions through oursuccessful alliance with Strategic Energy Ltd. and evaluate theelectronic energy exchanges for a fit with our customer needs.”
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