Public Utilities Reports

PUR Guide 2012 Fully Updated Version

Available NOW!
PUR Guide

This comprehensive self-study certification course is designed to teach the novice or pro everything they need to understand and succeed in every phase of the public utilities business.

Order Now

XML—Lingua Franca of Energy Commerce

A case study from Maryland on electric restructuring.
Fortnightly Magazine - September 1 2001

it extremely valuable as a medium for information exchange between and among trading partner communities of all kinds.

The power of XML lies in its simplicity. XML provides a human-readable standard for information exchange. It can take large chunks of information and consolidate the information into an XML document-providing structure and organization to the information exchanged via the Internet.

Furthermore, XML is not just a consensus choice for information exchange, but essentially a unanimous one. XML is not only a formal standard maintained by the World Wide Web Consortium (W3C), but more importantly, it is the standard supported by every significant vendor of software for storing and moving information.

Microsoft CEO Steve Ballmer calls XML the "lingua franca of the Internet." While introducing XML as the heart of Microsoft's .Net initiative, Ballmer proclaimed, "This is the XML Revolution. I think this will be as big or even bigger than any revolution that preceded it." Pretty bold words. Or are they?

Microsoft is hardly alone. Key technology vendors to the energy industry-Oracle, IBM, Peoplesoft, SAP and my company, Excelergy, to name just a few-have each announced or implemented a substantial and substantive XML strategy. This kind of widespread support of XML by the software vendors makes the adoption of XML as the preferred language of commerce a fait accompli.

Emerging Standards

The path for adoption of new technologies and standards is well known and well worn. To conduct the business of a restructured energy industry-without requiring an enormous amount of paperwork-demands a standards-based information exchange via electronic files.

In the initial efforts at data exchange that pre-dated the Internet as a forum for commerce, most transactions took place over private networks, using EDI-specific formats like ANSI X12. As transaction volumes have continued to grow, however, market participants have sought to lower their cost of doing business. Like most industries, economics is driving the adoption of the Internet as the vehicle of choice for commerce. As energy transitions its commerce onto the Internet, XML has displaced EDI as the preferred standard for information exchange.

The adoption of XML as the preferred technology for information exchange within the energy industry has been a market-led event. XML now completely dominates segments of the energy industry like online trading and supply chain automation.

Interestingly, the most heavily regulated segments of the energy industry-the provision of gas and electricity to retail customers-have been the slowest to adopt the use of XML for information exchange. The speed of the adoption of XML within retail markets may simply be a product of timing-most US-based retail markets utilizing EDI were deregulated before the commercialization of the Internet for business-to-business commerce.

The Choice: Machine Friendly vs. People Friendly

One of the oldest forms of electronic commerce is Electronic Data Interchange (EDI). Then why isn't EDI the preferred language for commerce over the Internet?

  • Few products ship with an EDI feature.
  • EDI technologies are not familiar to the developer community and do not integrate naturally with the Internet.
  • EDI standards have focused on building "universal" messages that are difficult to use-leading many companies