QuickTrade released the first commercial Internet-basedelectronic power trading system this week. Streamline, its biggestcompetitor, is expected to follow suit over the next few months.The QuickTrade system is equipped to handle forward trades at 13hub locations across the U.S. and one in Canada, and so far hasattracted the interest of about 35 traders, 20 of which have signedup to begin utilizing the system.

“Like any new system it has a growth period to get the traderscomfortable. But it’s definitely moving at a faster pace than[QuickTrade’s electronic] gas trading system, [which was launchedfive years ago],” said David Hanson, QuickTrade’s vice president ofmarketing. “It took us almost six months to get 20 customers on thegas system. But when we first started the gas side we were sellingtwo things: one, the system, and two, the concept of tradingelectronically. Now we’re just selling the system.”

It took the gas side about a year to have meaningful liquidity -“enough that people would pay for it,” said Hanson, but theelectric side is expected to gain liquidity faster. Hanson expectsthe power system to handle about 30-40 trades per day within thenext four months with up to 100 MW/day changing hands. The systemcurrently is equipped to deal with trading volume in up to 25 MWincrements.

About 250 customers currently trade nearly 3 Bcf/d onQuickTrade’s gas system and another 100 people log in for pricediscovery. Hanson said the system handles about 150 transactionsand up to 1,000 listings (bids or asks) each day.

QuickTrade is handling the power system somewhat differentlythan it approached the gas side. On the power system, it will actas a broker, matching anonymous traders but then identifying thetwo parties so they can complete their transaction. On the gassystem, QuickTrade actually takes title to the gas and completesthe trade with the parties remaining unidentified throughout theprocess. Hanson said the brokering method was chosen to smooth thestart-up, but if participants request anonymous matching, the powersystem might be converted at a later date.

There is a monthly fee for subscribing to the power system witha one cent per MWh incremental trading rate. However, currentlyQuickTrade is offering free trial subscriptions to build liquidity.The monthly fee on the gas system is $1,500 with an incrementalcharge of 0.25 cents/MMBtu.

QuickTrade is owned by Dynegy Inc., Nicor Inc. and SempraEnergy.

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