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<td width="25%" valign="top" align="center"><!--webbot bot="ImageMap" rectangle="(14,297) (97,322) http://www.powermarketers.com/adrates.html" rectangle="(11,230) (95,257) http://www.powermarketers.com/pmajobs.htm" rectangle="(12,163) (96,189) http://www.powermarketers.com/main.htm##_parent" rectangle="(12,95) (96,121) http://www.powermarketers.com/power2.htm##_blank" rectangle="(11,29) (96,54) ../pmamag.htm" src="../images/magmenu.gif" alt="PMA OnLine Magazine Menu" border="0" align="center" startspan --><MAP NAME="FrontPageMap"><AREA SHAPE="RECT" COORDS="14, 297, 97, 322" HREF="http://www.powermarketers.com/adrates.html"><AREA SHAPE="RECT" COORDS="11, 230, 95, 257" HREF="http://www.powermarketers.com/pmajobs.htm"><AREA SHAPE="RECT" COORDS="12, 163, 96, 189" HREF="http://www.powermarketers.com/main.htm" TARGET="_parent"><AREA SHAPE="RECT" COORDS="12, 95, 96, 121" HREF="http://www.powermarketers.com/power2.htm" TARGET="_blank"><AREA SHAPE="RECT" COORDS="11, 29, 96, 54" HREF="../pmamag.htm"></MAP><a href="../_vti_bin/shtml.dll/techcor/9806frst.htm/map"><img src="../images/magmenu.gif" alt="PMA OnLine Magazine Menu" border="0" align="center" ismap width="110" height="350" usemap="#FrontPageMap"></a><!--webbot bot="ImageMap" endspan i-checksum="22032" --><p><a href="../searchpma.htm"><img src="../images/archives.gif" alt="Archives Search" border="0" align="center" WIDTH="70" HEIGHT="40"></a></p>
<p align="left"><font face="Arial"><strong><small>About The Author:</small></strong></font></p>
<font size="3"><p align="left"></font><font size="2">Jeffrey Frost, a PMTC Senior Partner,
has years of experience as a banking treasury executive, trading room technology
innovator, and Internet electronic commerce pioneer. </font></p>
<p align="left"><font size="2">While Jeffrey's prior executive and entrepreneurial roles
have demanded numerous skills, much of his career has revolved around one simple theme:
The use of new computing technologies applied to existing information to create profitable
new business alternatives. </font></p>
<p align="left"><font size="2"><a href="http://www.pmtcweb.com/" target="_blank">The Power
Marketing Technology Consortium</a> is an IT and electronic commerce power marketing
consulting organization which integrates and supports technologies related to energy
trading and marketing.</font></p>
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<td width="90%" valign="top"><img src="..\images/techcor2.gif" alt="Technology Corner" align="top" border="0"><p><b><u>June 1998</u><br>
</b><font size="6"><strong>SEARCHING FOR ENERGY SWEETS (SUITES)</strong></font></p>
<p><strong>by Jeffrey Frost -- Power Marketing Technology Consortium<br>
</strong><font face="Arial" size="2">(<em>originally published by PMA OnLine Magazine:
06/98</em>)</font></p>
<blockquote>
<p><em><a href="http://www.pmtcweb.com/" target="_blank">The Power Marketing Technology
Consortium</a> (PMTC) is pleased to join PMA’s list of regular contributors to the
PMA ONLINE Magazine. In this space, we will be discussing the enabling software
applications required to support today’s power marketing organizations. Your feedback
is always welcome (<a href="mailto:[email protected]">[email protected]</a>).</em></p>
</blockquote>
<p><font size="3">It is tempting to write about energy "sweets" instead of
energy "suites" since the news on the latter continues to be disappointing. In
fact, there are simply no adequate unified application suites available in the marketplace
today, not one!</font></p>
<p><font size="3">Most wholesale energy trading and marketing organizations need a unified
software suite able to satisfactorily accommodate three major activities: 1) risk
management, 2) physical and financial power trading - including transmission and
scheduling, 3) physical and financial gas trading - including transportation and
scheduling. If you are a member of an energy wholesale organization and have sought to
purchase software from one or more vendors to support these three basic activities, then
you will recognize many of the names in Table 1. Not one of these vendors can today
deliver a production mode, unified application suite capable of adequately meeting these
three diverse but related needs.</font></p>
<font SIZE="4"><p align="center"></font><strong><font size="3">Table 1, Gas and Power Risk
Management <br>
and Trade Processing Vendors</font></strong></p>
<p><font size="3">Note: Some of these vendors offer just risk management, others just
power systems, other just gas systems, and others expanded combinations up to and
including a unified suite attempting to cover the entire gas, power, and risk management
spectrum.</font></p>
<div align="center"><center><table border="0" width="40%">
<tr>
<td width="50%" nowrap><font SIZE="2">ABB Systems Control</font></td>
<td width="50%" nowrap><font SIZE="2">Infinity</font></td>
</tr>
<tr>
<td width="50%" nowrap><font SIZE="2">Allegro Development</font></td>
<td width="50%" nowrap><font SIZE="2">Kuber Infotech</font></td>
</tr>
<tr>
<td width="50%" nowrap><font SIZE="2">Altra Energy Technologies</font></td>
<td width="50%" nowrap><font SIZE="2">KW International</font></td>
</tr>
<tr>
<td width="50%" nowrap><font SIZE="2">ARC Information Technology</font></td>
<td width="50%" nowrap><font SIZE="2">New Energy Associates</font></td>
</tr>
<tr>
<td width="50%" nowrap><font SIZE="2">Axiom Software Labs</font></td>
<td width="50%" nowrap><font SIZE="2">Nucleus</font></td>
</tr>
<tr>
<td width="50%" nowrap><font SIZE="2">Cegelec ESCA/Power Tech Labs</font></td>
<td width="50%" nowrap><font SIZE="2">Open Link Financial</font></td>
</tr>
<tr>
<td width="50%" nowrap><font SIZE="2">Contango Energy International</font></td>
<td width="50%" nowrap><font SIZE="2">Positron</font></td>
</tr>
<tr>
<td width="50%" nowrap><font SIZE="2">DSM (Data Solutions Management)</font></td>
<td width="50%" nowrap><font SIZE="2">Powertrade</font></td>
</tr>
<tr>
<td width="50%"><font SIZE="2">EMSC Marketing Systems</font></td>
<td width="50%"><font SIZE="2">Primo Systems Inc</font></td>
</tr>
<tr>
<td width="50%"><font SIZE="2">Energy Imperium</font></td>
<td width="50%"><font SIZE="2">Risk Advisory</font></td>
</tr>
<tr>
<td width="50%"><font SIZE="2">Energy Solutions</font></td>
<td width="50%"><font SIZE="2">Riskworks</font></td>
</tr>
<tr>
<td width="50%"><font SIZE="2">Energy Tracs</font></td>
<td width="50%"><font SIZE="2">Sava Risk Management</font></td>
</tr>
<tr>
<td width="50%"><font SIZE="2">Ensyte Energy Software International</font></td>
<td width="50%"><font SIZE="2">TIBCO</font></td>
</tr>
<tr>
<td width="50%"><font SIZE="2">FNX</font></td>
<td width="50%"><font SIZE="2">Transenergy Management, Inc.</font></td>
</tr>
<tr>
<td width="50%"><font SIZE="2">Henwood Energy Services</font></td>
<td width="50%"><font SIZE="2">Triple Point Technology</font></td>
</tr>
<tr>
<td width="50%"><font SIZE="2">IBM Global Services</font></td>
<td width="50%"><font SIZE="2">Zainet Software</font></td>
</tr>
</table>
</center></div><u><p></u><strong>Start With The Basics</strong></p>
<p>This is a column about the minimum functionality needed to adequately accommodate the
three basic activities: 1) risk management, 2) physical and financial power trading -
including transmission and scheduling, 3) physical and financial gas trading - including
transportation and scheduling. (Rather than repeat this ponderous description again, you
will see the acronym RMTP, Risk Management and Transaction Processing). This is not a
column about an idealized, "killer application", unified wholesale energy suite.</p>
<u><p></u><strong>Some Good News</strong></p>
<p>While no vendor has yet adequately covered all of the basic power and gas RMTP suite
needs, there are vendors listed in Table 1, <i><b>offering quality applications today</b></i>.
There are applications which do an excellent job on a piece of the whole, but do not cover
the full spectrum adequately. There are even applications on the market today which solve
some of the needs of an idealized future unified suite (see nine point list below).</p>
<u><p></u><strong>Some Delays and Pitfalls</strong></p>
<p>The major requirements for an integrated gas and power RMTP suite have been clearly
visible for a couple of years. So, why are there not have better answers by now? The
obvious reason is worth stating: It is enormously difficult to produce a quality
application of this breadth and complexity. Think about your own experiences with
applications from the biggest software companies in the world if you have any doubts. In
this case, much has been accomplished by small, often internally funded companies. Plus,
the original functional requirements specifications for these applications were often
confusing or misguided given the newly deregulated environment.</p>
<p>One reason RMTP application suites are not more advanced is that many were originally
developed for one purpose and then ported to fit the gas and power world. For example,
there are applications originally developed for the financial world or the oil industry or
for foreign energy markets. Others were started as power only or gas only and then
extended to include the second commodity and risk management. Still others started with
risk management and are now adding physical power and gas. In each case, the origins have
made it difficult to produce an adequate unified system.</p>
<p>Those systems designed from the ground up as unified wholesale RMTP energy suites were
generally later to arrive on the market and still tend to feel more like works in progress
than robust finished application suites.</p>
<p>From a user perspective, there are numerous other pitfalls to avoid when assessing the
adequacy of these applications. There is also vaporware for sale. If you do not see it
clearly with your own eyes, be cautious; there are rogue salespersons and unfortunately a
couple of vendors who seem to encourage confusion between future plans and deliverable,
installed, production grade systems.</p>
<u><p></u><strong>Fabulous Future</strong></p>
<p>In 12 to 18 months available suites will be far superior. Some vendors just need time
to flush out details, pump up performance, and work out bugs. TransEnergy and Riskworks,
though offering radically different suites, each fit this profile.</p>
<p>A couple of existing systems already have one or more of the attributes listed below,
attributes associated with future ideal systems (the subject of next month’s column).</p>
<blockquote>
<ol>
<li>automated interface to gas BBS’s,</li>
<li>automated interface to OASIS nodes,</li>
<li>automated interface to regional power market ISO’s, exchanges, and pools,</li>
<li>automated system level prices and indexes capture,</li>
<li>sophisticated marketing support front end,</li>
<li>built-in functionality for coming extranets,</li>
<li>built-in trader and risk manager analytics and portfolio level modeling,</li>
<li>direct connection to wholesale metering and billing,</li>
<li>inclusion of coal, emissions, and possibly other trading activities.</li>
</ol>
</blockquote>
<p>Some vendors with the best technical architecture are really platforms rather than
turn-key applications. Their specific application modules should mature and combine in the
future with their underlying architectures to provide high quality alternatives. TIBCO,
Infinity, and Open Link fit this profile.</p>
<p>There is still further upbeat news. This applications industry is clearly entering a
stage where it moves from small entrepreneurial, self-funded companies to an industry
attracting outside capital. Altra and Zainet are examples of vendors with new infusions of
capital to advance successful offerings. Other existing vendors with deep pockets, for
example IBM and Riskworks (Utilicorp), might buy or develop extensions to their current
applications. There are still other new or small or limited scope vendors who may be
bought or attract investment; ARC or Axiom or Sava come to mind.</p>
<p>As always, there are undoubtedly solutions in the making which have not made this list.
The rumor mill states that the unified system from one very large player is about to be
remarketed to others. And from somewhere other positive surprises are guaranteed to
surface as well.</p>
<u><p></u><strong>"But I Can Not Wait" - Making The Best of Today</strong></p>
<p>Many energy companies cannot wait and must make do with what is available today. There
are two reasonable choices. Several of the better existing unified suites can be made to
suffice over the short term - remember how long some activities have been done manually or
with spreadsheets and homegrown databases. A best of breed approach can be taken using
systems from two or three vendors run in parallel, with varying levels of integration
between them being feasible. If it is any solace, you are not alone. At best only a
handful of big players have developed quality internal systems for themselves - often at
costs which stagger the imagination. Everyone else is making do with patched together
inadequate home grown solutions or the existing third party solutions.</p>
<p>Remember that it is clear that information technology is a means to competitive
advantage in an industry driven by narrowing margins, increasing volumes and fierce
competition from well funded competitors. You must stay on top of developments!</p>
<blockquote>
<p><em><strong>Disclaimer</strong></em></p>
<blockquote>
<p><a href="http://www.pmtcweb.com/" target="_blank">The Power Marketing Technology
Consortium</a> (PMTC) consults on applications, but has none of its own. Nor does PMTC
have any financial interest in the recommendations it makes to its clients regarding
particular vendors. PMTC funded and performed this research solely as a means to better
serve its target market.</p>
</blockquote>
</blockquote>
<hr color="#FFFF00">
<blockquote>
<font size="3"><p>Jeffrey Frost, a PMTC Senior Partner, has years of experience as a
banking treasury executive, trading room technology innovator, and Internet electronic
commerce pioneer. While Jeffrey's prior executive and entrepreneurial roles have demanded
numerous skills, much of his career has revolved around one simple theme: The use of new
computing technologies applied to existing information to create profitable new business
alternatives. </font></p>
<p><a href="http://www.pmtcweb.com/" target="_blank">The Power Marketing Technology
Consortium</a> is an IT and electronic commerce power marketing consulting organization
which integrates and supports technologies related to energy trading and marketing.</p>
<p align="left">Jeffrey C. Frost may be contacted at (802) 864-9903; e-mail: <a href="mailto:[email protected]">[email protected]</a></p>
</blockquote>
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