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E-Marketing: Is Energy Missing the Net?

Fortnightly Magazine - March 15 2000

the past, the customer was a given. The focus of the companies was inward. If they are to succeed with this option, they must turn their focus outward onto the customer."

Dar says that will be impossible for most of the 150 investor-owned companies in the United States, not because they don't understand the need or can not find the technology, but because it requires a fundamental change in the company's overall priority. "It is an opportunity largely for new entrants in this space who don't have the baggage of being as internally focused as utilities."

The second option is for energy companies to ally themselves with businesses that are customer-focused and marketing-driven by becoming their back-office and delivery partners, concentrating on fulfillment.

"It is their only natural advantage. The only way you can have physical fulfillment is by going through their delivery infrastructure," Dar says. "Instead of fulfilling for themselves, they will end up fulfilling for the 'dot-coms' who will actually manage or control the customer interface."

The third option is to sell the company. Dar adds, "I don't believe they have the fourth option of saying it isn't going to happen in their lifetime or thinking that they can somehow prevent their customers from finding out about the Internet."

Patricia Lloyd Williams is a freelance writer in the Washington, D.C. area. She has more than 20 years of experience in the electric industry.


Early "Dot-Coms" Eye Big Potential Markets

Energy innovators say the Web gives them an edge in serving customers.

Power marketers, energy companies and other traders bought and sold nearly 3 billion megawatt-hours in 1998, according to HoustonStreet, a Web portal for trading wholesale energy products. Almost all of that business was conducted by telephone and fax. Emerging wholesale energy exchanges for online trading provide traders with real-time access to critical information and the ability to trade 24 hours a day. The Internet's immediate liquidity, improved efficiency and reduced trading costs are drawing traders away from the phones.

Altra. Altra was one of the first metamediaries - that is, Internet platforms for bringing together buyers and sellers - to facilitate energy trading online.

"Our business model is integrating the transaction chain electronically so that transactions can be consummated online, managed online and settled online with a minimal level of human administrative work in the process," Braziel says. The company's Altrade platform offers a marketplace for natural gas liquids, crude oil and electricity. Altra serves all segments of the energy transaction chain, including producers, trading and marketing companies, and large end-users. About 1,800 energy traders use the system.

Braziel estimates that Altra facilitates up to 50 percent of all trades for natural gas liquids in the United States. His goal is to achieve that level of saturation in other markets.

"It is complicated for buyers and sellers to find each other in the electric business, and it is particularly complicated to schedule transactions across systems where the buyers and sellers don't own the wires," Braziel says. The Altra system integrates the transaction so that if it is