Avista Advantage announces e-commerce exchange initiative
"This breakthrough move affirms Avista Advantage's ability to leverage its detailed customer information and data base into something of greater value," said T. M. Matthews, chairman, president and chief executive officer of AvistaCorp.
The customer group represents in aggregate nearly 400 sites in three deregulated energy markets. Information for the posting was based on the extensive information Advantage has developed in its proprietary database for each client. Advantage will use this initial posting of client bids to validate the value of exchanges on behalf of all its clients, which now represent 50,000 sites across the U.S., Canada and Puerto Rico. Advantage will also use the experience gained with these three clients to refine its overall strategy in the emerging commodity exchange business for all its clients.
"This is a clear demonstration of our core business model – leveraging data on our client's behalf – and this is just the start. While others are only talking about buying energy through electronic exchanges, Avista Advantage has demonstrated that it can execute the posting of actual data on three different exchange platforms to assist our customers in getting improved market based pricing."
"We've essentially pioneered an approach that creates significant benefits for all involved," noted Avista Advantage president Gerry Crooks. "Avista Advantage has expanded its strategic relationships and service capabilities, our clients have access to a valuable service that will assist them in successfully navigating the deregulating energy environment, and the exchanges gain liquidity with every one of our clients that elect to participate."
More than 30 electronic energy related entities calling themselves "exchanges" were evaluated for participation in Avista Advantage's initiative. Through this extensive review, Avista Advantage confirmed that the "typical exchange" grants control to its commodity sellers. Few exchanges support buyer-centric business models where Advantage's clients – the buyers – can retain control over the transaction, with the opportunity to review any offer and choose whether to proceed.
To this end, Advantage supports the "reverse-auction" format that searches for the lowest price for gas and electricity, and effectively streamlines the buying process for buyers. The three exchanges selected for this initial trial are market leaders currently executing energy transactions via the Internet, each offering a different business model. All three exchanges have also shown flexibility in supporting Avista Advantage's customer-driven focus.
"We believe it is too early to lock into any one specific format for Internet based exchange buying, because all of the business models, processes and technology are new and evolving," said John Battista, director of commodity services for Avista Advantage. "We will continue to offer advanced energy solutions through our successful alliance with Strategic Energy Ltd. (SEL), and evaluate the electronic energy exchanges for a fit with our customer needs.
Edited by Stephen Heiser