(July 2012) Southern Company announced changes in the company’s management team. Great Plains Energy and Kansas City Power & Light (KCP&L) appointed Scott...
Internet Mavericks: Still Working Out of the Garage?
is not the most efficient. What the business is meant to do is provide a tool for people to bring this more transparent look at the market and a more free flow of reservations and scheduling activity.
Do you need physical rights to make the exchange?
The exchange is not meant to take control of the capacity. We wouldn't own the capacity per se, all we would do is make a market for it. But you face two big obstacles.
First, there is not a tradable unit of commodity. "Available Transfer Capacity" is calculated a little differently depending on where you are. So there is not a common agreement on how to calculate ATCs. Second, you need some rules to govern the exchange in terms of how people can be treated fairly to make arrangements and to do the buy-sell transactions.
You are seeking to standardize those things?
You would need to or you would have a difficult time making a market.
What the exchange is meant to do is make a market so that people can see the capacity that is available. The pricing algorithm that is being used does not have to be the same everywhere in the country. You could buy things on a different pricing basis.
How did you come up with this idea?
It came from people working with the OASIS transmission marketing function that is resident within the utility. Some of the folks that are managing day-to-day operations and who are making OASIS sites available have started to recognize the need to be able to make a market for transmission capacity. The germ of the idea came from deep within the reservation and scheduling function.
Who approves your project?
The first level of approval is the steering committee that represents the consortium and all the member companies are represented. The next level of approval would be for each member of the consortium to get his or her parent company to be willing to invest. So you have two levels of approvals.
How much money are you talking about?
We have a lot of dollar figures that we are kicking around but it is still premature. We are still trying to get a sense of what the market is willing to pay for understanding reserveable transmission rights.
When do you expect to be operational?
When you launch a business there is a need to study the opportunity to make sure that it is real. We are finishing that stage. The expectation is that we are moving ahead but it remains to be seen what the timing is and what are the first sets of steps we are going to undertake as a group.
CEO, Plurimi, Inc.
(Demand-side management, with dynamic pricing, for large-volume customers)
Contrary to those that say it's the utilities making the e-play, Plurimi Inc. (headquartered in San Francisco) stands as testament that e-business in the energy industry still offers opportunities for outsiders. In this case, Plurimi has chosen a niche much closer to the retail customer: demand managementvia the Internet.