Coal

Cyberbusiness

Issue 1 and Volume 102.

Cyberbusiness

In the relentless pursuit to “get on the web,” many electric companies may have temporarily overlooked the question of what they hope to accomplish once they establish a presence on the Internet. Will their web site be an eye-catching promotional tool to attract investors and give their customers a warm-and-fuzzy feeling? Will it function as an informational tool to educate customers on energy-saving issues and safety matters? Or will it serve as an interactive mechanism where business is conducted?

To date, most electric industry web sites fall in one or both of the first two categories. Jazzy graphics are integrated with flattering press releases, useful consumer tips and “How can we help” offers. Business transactions are typically reserved for “off-line” interaction.

In a recent two- or three-wave surf of the web, I uncovered several utilities and industry service companies that are using their home pages as repositories of information related to business deals: procurement activities, equipment sales, power purchase agreement buyouts and various other offerings.

GPU Energy placed an RFP on its home page (www.gpu.com) for reverse auction bids to buy-out, buy-down and/or restructure payments under certain power purchase agreements between GPU and its operating non-utility generator suppliers. The on-line RFP explains the basis for GPU`s request and provides information and instructions to prospective bidders. In a disclaimer to the on-line documentation, GPU does state that, because of computer incompatibility and potential inaccuracies, the on-line RFP “should not be utilized or relied upon by anyone interested in participating in the reverse auction or obtaining detailed information in connection therewith.” Excellent lawyerspeak. Nonetheless, the on-line solicitation is an obvious attempt to provide an alternate mechanism for potential bidders to gain ready access to pertinent information.

American Electric Power`s (AEP) web site (www.aep.com) contains two interesting on-line business tools. In one, various pieces of electrical equipment, including transformers, are listed for sale. Model numbers, manufacturers, quantities, prices and contact information are included for bidders to consider. The AEP home site also reproduces company announcements soliciting bids for coal supplies. Quality specifications, term requirements and bid deadlines are provided, along with contact information for interested parties.

NRG (www.nrgenergy.com) recently posted an offer memorandum from San Joaquin Energy Partners for the sale of several biomass facilities in California. The on-line document provides unit descriptions, performance and maintenance history, financial details and submission requirements for potential bidders. There is no disclaimer associated with the on-line document, but it does state that facility tours and data reviews may be necessary for complete due diligence efforts.

Power Development Corp. (www.pdcpowersource.com), a Boston-based developer of independent and merchant power plants, established its website as a “virtual request-for-proposal soliciting expressions of interest from potential risk-sharing partners in the generation and delivery of electricity.” Qualified fuel suppliers, fuel transporters and wholesale electricity service providers can use the interactive site to sign up as potential participants. According to PDC President Michael Armitage, taking advantage of the interconnectivity of the web is not only more efficient, “it symbolizes the more inclusive and cooperative business arrangements we are looking to create.”

Various munis and co-ops have also turned to the web to conduct business. At Lincoln Electric Cooperative`s web site (www.libby.org/LincolnElectric), information is provided describing several products for sale, ranging from surge suppression equipment to electronic thermostats to home security lights. The Clay Electric Cooperative`s web site (www.afn.org/~clayelec) has links to a local “trading post,” listing items community residents would like to sell. Not high tech or high dollar, but an inexpensive, valuable service to Clay`s customers in northern Florida.

There are undoubtedly numerous other electric industry sites that, in one way or another, are initiating the transfer of business activities onto the web. On-line business, however, is still in its infancy and much remains to be done to establish the web as a valid transaction medium. Those entities that experiment with the advantages and limitations of the web will be better positioned to peddle their wares down the road. p