Enough

A new “dream team” of companies formed last week appears to havemore than enough market muscle and expertise to succeed whereothers have failed in the retail energy market. Enron Corp., IBMand America Online have launched an ambitious plan to build a majornational retail energy company with IBM as back office manager,Enron as energy supplier, and AOL as the key link to the smallcustomer marketplace.

A new dream team of companies formed yesterday has more thanenough market muscle and expertise to succeed where others havefailed in the retail energy market. Enron Corp., IBM and AmericaOnline have launched an ambitious plan to build a major nationalretail energy company with IBM as back office manager, Enron asenergy supplier, and AOL as the key link to the small customermarketplace.

As if there weren’t enough sites to click on already, energybuyers will be getting yet another deal-making space on theInternet. Dynegy and Williams agreed to invest $25 million each fora minority equity stake in eSpeed Inc., an interactive electronicmarketplace engine for business-to-business (B2B) e-commerce.

At the request of potential new shippers, Petal Gas StorageL.L.C. has extended by three weeks its open season to determinewhether there’s enough market demand for further expansion of itstwo storage caverns in Mississippi.

The phrase “if you build it, they will come” sounds too ancientto describe the nascent e-commerce scene. Perhaps it’s moreappropriate to ask, “if everyone builds something, will they knowwhere to go?” The months ahead will see no dearth of online tradingoptions for energy and related properties, products and services asplayers scramble to create new sites or get on board existing ones.Among this week’s happenings:

Shortly after canceling an Overage Alert Day notice (see Daily GPI,Feb.1), Florida Gas Transmissionreported experiencing enough market-area demand to reinstate thenotice Tuesday east of Station 13 in northern Florida. As with theearlier one, the OFO carries a 6% tolerance for negative imbalances.

Tennessee said operating conditions had improved enough Monday toallow it to lift an OFO Action Alert implemented Saturday (see DailyGPI, Nov. 12). Weekend OFOs by PacificGas & Electric, Southern California Gas and Northern Natural Gasalso were no longer in effect Monday.

A Calgary source had the appropriate assessment of Wednesday’sfirming swing market: “There’s not enough snow to ski yet, but theway these gas prices are moving you’d think we were in the middleof a blizzard.” Overall prices were moving higher for the firstsignificant gains of this week. Most increases Wednesday werebetween a nickel and a dime, but Northeast citygates led the pricepack by rising a dime or more. A jump of just over 8 cents by theNovember futures contract on its date of expiry along with theapproach of colder weather, especially in the eastern two-thirds ofthe nation, were cited as reasons for the upticks.

While deal activity in the capacity release markets appears tobe leveling off, the market is still dynamic enough to accommodatenew market entrants, according to energy industry consulting firmSkipping Stone Inc.