Electricity exchanges see Texas volume surge
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"We've definitely seen a big jump in the number of users,the requests for new users and in general our business acrossthe board since EnronOnline has gone down," Mike Williams,managing director of TradeSpark, told Reuters.
Williams said there are between 15 or 20 strongparticipants in that market, calling it "a decent number for asmall market like that."
TradeSpark LP, an energy trading platform built by bondbroker Cantor Fitzgerald LP and its affiliate eSpeed Inc.(ESPD.O), said it has seen a big increase in trade andparticipants, though it declined to release trade volume data.
The added business coincides with the company's efforts torebuild following the September 11 attack on New York's WorldTrade Center, which killed several TradeSpark employees andhundreds of employees at parent Cantor.
TradeSpark's partners -- including energy majors DominionResources Inc. (D.N), Royal Dutch/Shell Group (RD.AS) (SHEL.L)unit Coral Energy, Koch Energy Trading Inc., TXU Corp. (TXU.N)unit TXU Energy Trading, and Williams Cos. Inc. (WMB.N)subsidiary Williams Energy Marketing and Trading Co. -- havejoined with active participants on its system to ease theoperational burdens facing TradeSpark's surviving staff.
Active participants on the system like utilities DynegyInc. (DYN.N) and Entergy Corp. (ETR.N) also stepped in to helpkeep the system going.
Picking up the pieces
"The original (TradeSpark) deal was a partnership involvingthe energy partners, with Cantor and eSpeed providing theservices agreement," Williams said.
"Obviously, with September 11, a lot of those services weredecimated, so all of the partners pitched in and helped withwhat they could in terms of public relations, human resourcesand operations."
In addition to its activity on TradeSpark, Dynegy has itsown online trading system -- DynegyDirect -- which has alsoposted a big rise in volume, spokeswoman Deana Cox said.
Cox said since October 2001, when troubles at Enron startedsapping liquidity on its EnronOnline system, the number ofcustomers accessing DynegyDirect has doubled, while the numberexecuting agreements has jumped 20 percent.
The surge in online trading volume in the Texas marketparallels growth seen nationwide on rival systems after Enronsought Chapter 11 bankruptcy protection on December 2.
Intercontinental Exchange (ICE), another online energytrading platform, said its North American Power market has seena 51 percent increase in volume from December to January, withoverall daily trade averaging 12 million megawatt hours.
The company has not, however, broken out how much of theincrease was seen in transactions earmarked for the ElectricReliability Council of Texas (ERCOT) market.
ICE capped 2001 with a 400 percent increase in users and a15-fold jump in the number of trades executed on its system.
Atlanta-based ICE is owned by over 100 energy and metalstraders, brokers and bankers, including utilities and energyfirms American Electric Power Co. (AEP.N), Utilicorp UnitedInc.'s (UCU.N) Aquila, Duke Energy Corp. (DUK.N), El Paso Corp.(EP.N), Reliant Energy Inc. (REI.N), Mirant Corp. (MIR.N) andBP Plc (BP.L).
How many new players
ERCOT, once one of the quietest U.S. spot power markets,has seen a growing stream of market players over the past fewyears, partly fueled by Texas's deregulation of its powerindustry, attracting marketers with no generation in the stateinto a field once dominated by traditional utilities.
State officials said there are currently 43 certifiedretail electric providers (REPs), up from about 23 last Junewhen the pilot program began.
"Certainly more retail providers are active in the markettoday than were involved in the pilot (program). We knowthere's a liquid market out there and we know there's a greatdeal of competition," Tom Noel, ERCOT CEO, told Reuters.
Noel said many players delayed jumping into the marketuntil mid-December, when established utilities were given the"price-to-beat."
The "price-to-beat" has provided a benchmark for customersto comparison shop since open competition among power providerskicked off on Jan. 1.
Customers who decide against switching to a new providerwill receive a legislatively mandated base rate cut as part ofthe "price-to-beat" rate.
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