Dynegy announced that it has become a partner in TradeSpark LP and will link its proprietary e-commerce portal, DynegyDirect, to the TradeSpark system, a multiple-party electronic trading platform powered by eSpeed and supported by Cantor Fitzgerald. TradeSpark also apparently wants to allow its other partners, which include Coral Energy, Dominion, Entergy-Koch Trading LP, TXU Energy Trading and Williams Energy Marketing and Trading, to link their own proprietary trading platforms to the TradeSpark system.

There are currently 231 companies and more than 3,500 users participating in the TradeSpark marketplace. In 2001, TradeSpark added emissions, coal, off-peak power, hourly power and balance-of-the-day instruments. In 2002, the company plans to expand into the Canadian market, and will look to continue to add products that are actively traded and supported by market participants. In the next year, TradeSpark plans to expand the personalized trading functionality the system currently offers and to increase liquidity in the market by implementing rule-based trading systems. It also plans to provide clearing services.

“Dynegy’s partnership brings additional liquidity and price transparency to TradeSpark’s marketplace,” said Mike Williams, managing director for TradeSpark. “The expansion of our relationship with Dynegy demonstrates TradeSpark’s ability to attract industry leaders through the strength of our electronic platform and technological superiority.”

After suffering through the loss of key staff and equipment in the World Trade Center tragedy, TradeSpark LP managed a significant rebound, producing transaction, volume and revenue growth. The system traded more than $40.2 billion (notional value) in energy products in the fourth quarter and more than $150 billion between its inception in October 2000 to February 2002.

Mark Fairchild of DynegyDirect said the link between Dynegy’s system and TradeSpark is already activated. It will allow Dynegy to post products on TradeSpark and gain more market access. “Not all our products will necessarily be going to TradeSpark, just the ones we choose,” he said. “Some of the stuff we offer on DynegyDirect, such as some of our hourly power products supported by our generation assets, won’t be offered on TradeSpark because they are kind of unique to Dynegy’s product offering. There also will be instances in the marketplace when I may or may not want to post a particular product to TradeSpark. But the majority of our products will go across the interface.”

Dynegy said it currently offers information and access to more than 750 energy products in North America and Europe, including products not offered on other systems. Fairchild said DynegyDirect’s business has been booming since EnronOnline went dark in December. “Since their exit from the marketplace, I would say our business is probably up 50-60% and we probably have, depending on the commodity, anywhere from 25-50% of [Dynegy’s] business being done via DynegyDirect. In gas, I would say, on average 35-40% of Dynegy’s business is done on DynegyDirect.”

Dynegy would like to see DynegyDirect and TradeSpark take up about 66% of its trading business. “If I could get two thirds of our business to be done online, I think the associated benefits with that are huge,” said Fairchild. “There are benefits for the market as well in terms of incremental transparency.”

Fairchild said Dynegy traders frequently use IntercontinentalExchange, but he said it would not be feasible for Dynegy to link its online trading system to both TradeSpark and ICE.

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