WASHINGTONAmerican Electric Power (AEP), Carolina Power & Light (CP&L), Duke Energy and Unicom Corp. plan to launch an independent, Internet-based electric transmission business-to-business exchange that offers a single gateway, or portal, for arranging transmission capacity.
The transmission exchange will be open for use by any group in the energy industry, including power marketers, merchant generators, electric utilities, municipalities, electric cooperatives and energy aggregators. Customers also will include Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs) as they are formed across the United States.
Collectively, the four companies transported approximately 100 million MWh of wholesale energy across their transmission systems in 1999. The companies operate and manage more than 60,000 miles of transmission lines. According to the companies, more than $4.5 billion in revenue was generated industrywide in 1999 from wholesale energy transported in the United States.
By using an online e-marketplace, the transmission exchange will provide more timely, accurate decisions and expedited buy-sell transactions. Currently, transmission providers frequently use a commercial bulletin board called an Open-Access Same-Time Information System, or OASIS, to post approved transmission reservations and available transfer capacity. More than 170 OASIS sites exist across the United States today. Multiple transactions are often required before a customer can ultimately move energy, as the reservation and scheduling process involves multiple transmission providers across diverse geographic areas. By using an external host, or application service provider (ASP), the transmission exchange will consolidate these transactions into one.
Additionally, the transmission exchange will produce a more transparent electric transmission marketplace. Customers of the exchange will be able to reselland purchaseunused transmission reservations. The exchange also will allow information sharing on the functioning of transmission markets across the country.
The consortium’s initial focus is on completing the definition of the exchange’s service offerings, selection of technology and aggressively moving toward business incorporation and service initiation.
It is anticipated that the new, independent company will be formed in the third quarter 2000. The exchange would be operational by year-end.
The Boston Consulting Group has been selected to assist in the development of the exchange and the selection of the technology provider.
“This Internet-based transmission platform will simplify energy transactions and improve market liquidity,” said Craig Baker, AEP senior vice president of public policy. “This consortium is creating a system that brings the ‘one-stop shopping’ concept to transmission, allowing seamless scheduling across multiple systems. We believe this concept is in alignment with the next steps for OASIS as discussed recently by the Federal Energy Regulatory Commission.”
“CP&L’s goal in joining this consortium is to help foster a more robust wholesale power market through the utilization of Web-based technology,” said Erik Hansen, CP&L’s vice president of system planning and operations. “It will allow us to streamline the existing transmission process, providing energy buyers and sellers with a more dynamic and efficient environment to trade and schedule power flow.”
“Over the past several years the energy industry has made rapid progress that has enabled electric generation and distribution to develop into more liquid markets,” said A.R. Mullinax, Duke Energy chief e-business officer. “Using the resources of the Internet, we are now seeing opportunities emerge in the transmission area that will ultimately provide customers the energy they need, when they need it.”
“The OASIS systems in operation today are almost four years old, difficult to use, and are limited in terms of the information that can be posted on them,” said Vito Stagliano, Unicom vice president of transmission policy, planning and service. “This venture will develop a next generation system marketable to newly forming Regional Transmission Organizations that are expected to emerge as a result of FERC Order 2000.”