BayCorp Holdings Ltd., a New Hampshire-based energy holding company, said Monday that it was creating a Web site where utilities and marketers will be able to trade wholesale electric power supplies over the Internet.
Houston Street Exchange, a wholly owned subsidiary of BayCorp, will launch the Web site on 8 July. Initially, utilities and power marketers will be able to use the Web site to trade wholesale power in the Northeast. But within a few months, it will be expanded to allow wholesale power to be bought and sold throughout the United States, a market valued at about $70 billion.
"In 1998, more than 3 billion megawatt hours were traded, with virtually all of it done over the telephone," said Frank Getman, Houston Street Exchange's president and chief executive.
"We are redefining how power is traded in the wholesale market, making it much more efficient and easy for power marketers to buy and sell electricity."
In addition to acting as an electronic trading floor, the Web site will provide information on weather, energy news, and stocks, the company said. The site will remain open for trade 24 hours a day.
But it remains to be seen whether power marketers and utilities are willing to make the jump from the telephone to the Internet.
"As the market matures, there may be a place for it, but it's probably still too soon," said one trader, who asked not to be named.
Houston Street Exchange's Getman said he's confident the power market will adjust to online trading. "It's only a matter of time before everything's traded on the Internet," he said.
"We're not asking them to change the business process, just the medium."
Getman added that Houston Street Exchange, based in Portsmouth, New Hampshire, would likely be spun off from BayCorp Holdings through an initial public offering.
"Ultimately, this will probably be a separate company," he acknowledged, but declined to give a timetable.
