15 Energy Companies Form Consortium for E-Procurement Exchange

A consortium of 15 leading U.S. electric and gas companies plans to launch an Internet marketplace for the purchase of goods and services between the energy industry and its suppliers this year. The 15 companies include American Electric Power (NYSE: AEP), Cinergy (NYSE: CIN), Consolidated Edison, Inc. (NYSE: ED), Duke Energy (NYSE: DUK), Edison International (NYSE: EIX), Entergy (NYSE: ETR), FirstEnergy Corp. (NYSE: FE), FPL Group (NYSE: FPL), PG&E Corp. (NYSE: PCG), Public Service Enterprise Group (NYSE: PEG), Reliant Energy (NYSE: REI), Sempra Energy (NYSE: SRE), Southern Company (NYSE: SO), TXU (NYSE: TXU) and Unicom (NYSE: UCM).

The business-to-business exchange will operate as a single global portal for purchasing anything from transformers and wire to turbines and equipment repairs. The for-profit exchange will be open for use by any company in the energy/utility industry. By building an online marketplace, the consortium expects to generate significant benefits for purchasers and suppliers alike by streamlining purchasing processes, shortening purchase cycles and increasing accessibility between buyers and sellers. According to Forrester Research, utilities are the third largest industry in terms of total online business trade.

The consortium expects to establish an independent company by June to operate the exchange, initially owned by the founding companies.

Initial services will include online proposals, price quotes and auctions. The exchange will be designed to encourage open participation. The strong commitment of the companies to supplier diversity will continue. Open, low-cost access to e-commerce is expected to benefit small and historically underutilized suppliers through increased market reach and efficiency.

The management-consulting firm of PricewaterhouseCoopers has been selected to assist in the development of the exchange and the selection of the technology provider.

ATLANTA --Southern Company announced its partnership today with 14 leading U.S. energy-related companies to launch an open and independent Internet procurement marketplace exchange to serve member companies and their suppliers later this year.

The business-to-business exchange will operate as a single global portal between the energy companies and their suppliers. Southern Company’s partners include AEP, Cinergy, Con Edison, Duke Energy, Edison International, Entergy, FirstEnergy Corp., Florida Power & Light Group, PG&E Corp., Public Service Enterprise Group, Reliant Energy, Sempra Energy, TXU and Unicom.

Southern Company views the consortium as a platform to generate value for shareholders and customers by taking advantage of technology as a business vehicle for the future. Using cutting-edge technology will enable the company to streamline its procurement processes.

“We see this investment as a way to take advantage of the business-to-business marketplace evolving rapidly via the Internet,” said Paul Bowers, Southern Company senior vice president and chief marketing officer. “The open technology framework and increased efficiencies that will evolve will benefit our company. This is the premier platform for business transactions and the opportunities for procurement are overwhelming.”

The company was one of the founding members of the consortium, which grew from a series of discussions with other companies. Knowing no such procurement tool existed, Southern Company and the other founding members formed the marketplace exchange.

Southern Company (NYSE: SO) is an international energy company that operates more than 48,000 megawatts of electric generating capacity worldwide. It is the largest producer of electricity in the United States and one of the world’s largest independent power producers. Southern Company subsidiaries and their affiliates serve 12 million retail customers worldwide and millions more through the wholesale market. Based in Atlanta, Southern Company is the parent firm of Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric.

Through its Southern Energy Inc. subsidiary, Southern Company has operations in 12 countries on five continents and has a growing presence in North America with assets in the Northeast, the Midwest, California and Texas. Southern Company also provides energy-related marketing, trading and technical services in the United States and Europe and offers Southern LINC wireless telecommunications.