Subject: ALP Proposal
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked]
Date: Sun, 19 Nov 2000 14:59:00 -0800 (PST)

Carrie, 

I am sending you, as promised, the draft of my proposal. Please, let me know 
if it meets your requirements. I shall be glad to revise it and send you the 
final version. 

Vince Kaminski 

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One of the most important trends in the energy industry during the last year 
was proliferation of electronic, Internet based, trading platforms for 
wholesale markets and for retail operations. Websites such as 
www.houstonstreet.com and www.altranet.com provide facilities for matching 
buyers and sellers. The website operated by Enron Corp. (EnronOnline) 
represents an alternative solution under which Enron acts as a principal in 
every transaction. On the retail? side, many retail e-commerce companies 
offering auctions, reverse auctions and platforms for creation of buyers, 
clubs challenge incumbent utilities. The objective of this project is to 
evaluate the impact of e-commerce (both at the wholesale and retail levels) 
on the energy industry. The study will start with comparative analysis of 
different wholesale trading and retail e-commerce business models and 
evaluation of their long-term viability. The next step will be assessment of 
the impact of e-commerce on price dynamics, profit margins and the level of 
competition in different energy markets. A separate section will be devoted 
to analysis of reaction of companies and organizations affected by e-commerce 
(incumbent utilities, organized exchanges, energy brokers) to the new 
competitive threat, and different strategies they implement to meet the 
challenge. Organized exchanges have accelerated in many cases the transition 
to screen-based trading that has been already replacing open outcry 
technology. Power and natural gas marketers have created alliances (with 
other industry players, software companies and electronic exchanges) to 
create their own trading platforms. Gas and electric utilities embarked on 
development of vertical and horizontal e-commerce platforms, offering 
services to households and other companies in the energy industry. The 
critical question is how quickly different companies should react to the 
competitive threats and how fast they should exploit opportunities created by 
the Internet based economy. It's quite obvious that the Internet revolution 
will change the energy industry's landscape during the next few years. The 
objective of the project is to provide answers to the questions posed above, 
based on the currently available information. Additionally, the participants 
should come up with fallback strategies the energy companies should implement 
in case the currently? expected trends fail to materialize.  

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