Utilities form internet electric transmission exchange
American Electric Power Co. Inc., CP&L Energy Inc. unit Carolina Power & Light Co., Duke Energy Corp., and Unicom Corp. reported they are forming a company to operate an internet-based electric transmission business that will reserve, schedule, and move wholesale power. The exchange is expected to operating by yearend, the companies said in a statement.
American Electric Power Co. Inc., CP&L Energy Inc. unit Carolina Power & Light Co., Duke Energy Corp., and Unicom Corp. reported they are forming a company to operate an internet-based electric transmission business that will reserve, schedule, and move wholesale power.
The exchange is expected to operating by yearend, the companies said in a statement.
Currently, transmission system operators frequently use a commercial bulletin board called the Open-Access Same-Time Information System (OASIS), to post approved transmission reservations and available transfer capacity.
More than 170 OASIS sites exist across the US, the companies said. Numerous transactions are often required before a customer can move energy since the reservation and scheduling process involves multiple transmission providers across diverse geographic areas.
"The OASIS systems in operation today are almost 4 years old, difficult to use, and are limited in terms of the information that can be posted on them," said Vito Stagliano, vice-president of transmission policy, planning, and service, Commonwealth Edison Co.
By using an external host, or application service provider, the companies say, the proposed transmission exchange will consolidate these transactions into one.
The companies claim the online transmission exchange will provide more timely, accurate decisions and expedited buy-sell transactions. Additionally, they say, a transmission exchange will produce more transparent pricing.
Customers of the exchange will be able to resell�and purchase�unused transmission reservations, creating a secondary market. The exchange also will allow information sharing on the functioning of transmission markets across the country.
Stagliano said the proposal represents a next-generation system marketable to newly forming regional transmission organizations (RTO) that are expected to emerge as a result of the Federal Energy Regulatory Commission's Order 2000, which sets a goal of having all US utilities members of RTOs by Dec. 15, 2001.
On Tuesday, CP&L Energy Inc., Duke, and SCANA Corp. reported plans to form an RTO with 22,000 miles of transmission lines and to be named GridSouth. It will operate in the Carolinas. They said the proposal will be filed with the Federal Energy Regulatory Commission by October 16.
The transmission exchange consortium�s initial focus will be on completing the definition of internet service offerings, selecting technology, and moving toward business incorporation and service initiation. As currently envisioned, the 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 could also include independent system operators (ISOs) and RTOs as they are formed across the US.
Collectively, the four companies transported about100 million Mw-hr 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 US.
The Boston Consulting Group has been selected to assist in the development of the exchange and the selection of the technology provider.