E-Marketing: Is Energy Missing the Net?

Fortnightly Magazine - March 15 2000
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Before the industry can tap into the Web's full potential, it needs to remove some roadblocks - without regulating itself into a corner.

Everyone involved in energy recognizes that deregulation is driving major changes in how the industry operates. What some may not recognize is that the evolution of e-commerce is compelling even greater changes in the way energy is marketed and purchased in both wholesale and retail markets.

A recent report by Forrester Research Inc., an independent research firm that analyzes the impact of Internet and other emerging technologies on business, consumers and society, projects that 25 percent of business-to-business sales of natural gas and 11 percent of business-to-business sales of electricity will be conducted online by 2004. Most of the transactions are short-term contracts with standard provisions.

Branding and customer convenience drive the retail market. Internet energy stores allow residential and small commercial customers to purchase and pay for services online.

"People are not using the Internet because it is cool," says Frank Getman, president and chief executive officer of Houston Street Exchange Inc. "They are using the Internet because it is helping them do their jobs more efficiently and effectively."

The energy business is high-tech in terms of the generation and delivery of energy but not in terms of customer service and marketing. The Internet is the medium for changing that.

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