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----- Forwarded by Steven J Kean/NA/Enron on 10/30/2000 07:29 AM -----
=09"IssueAlert" <IssueAlert@scientech.com< =0910/27/2000 06:33 AM =09=09=20 =09=09 To:=20 =09=09 cc:=20 =09=09 Subject: Toronto Hydro, Ontario Power Generation Launch EBT Express http://www.consultrci.com ************************************************************************=20 Search SCIENTECH's PowerHitter archive to read about our interview with=20 a leader in the industy: http://www.consultrci.com/web/infostore.nsf/Products/PowerHitter ************************************************************************ =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D SCIENTECH IssueAlert, October 27, 2000 Toronto Hydro, Ontario Power Generation Launch EBT Express By: Will McNamara, Director, Electric Industry Analysis =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D Toronto Hydro Corporation and Ontario Power Generation announced that they= =20 have launched an electronic business transaction (EBT) "hub" that will=20 provide centralized electronic data management and transaction services=20 to local distribution companies (LDCs) and energy retailers in Ontario.=20 Called EBT Express, the exchange will become operational when Ontario's=20 new competitive electricity market opens next spring. Excelergy eXACT=01v,= =20 developed by energy software solutions company Excelergy Corporation, will= =20 provide the technology infrastructure for EBT Express. ANALYSIS: This is a significant development, as EBT Express represents=20 the first hub in Canada for retail energy transactions. The site will serve= =20 as the central clearinghouse for immediate communication of customer data= =20 among hundreds of LDCs and energy retailers in Ontario, and possibly=20 throughout=20 Canada. I spoke yesterday afternoon with George Caraghiaur, Exelergy's=20 vice president, Canada, about EBT Express. Caraghiaur believes that the=20 site "will provide the essential technology for opening Ontario's electrici= ty=20 market in an efficient manner." That is no small undertaking as there are= =20 an expected 300 players that will need to communicate with each other in=20 Ontario once competition begins. Deregulation is happening in Canada on a province-by-province basis (much= =20 like it is happening state-by-state in the U.S.). Thus far, only Ontario=20 and Alberta have set dates when electric customers will be able to select= =20 a new energy supplier. Ontario is scheduled to become competitive next=20 spring, and presently is the only region in which EBT Express will be=20 operational.=20 Alberta uses a point-to-point transaction process, which represents a very= =20 complex model. Caraghiaur believes that the value of EBT Express will be=20 clearly seen, and there will be many opportunities for the hub in Alberta= =20 and elsewhere. The Ontario Energy Board (OEB), which is the equivalent of a state PUC,=20 mandated the use of electronic business transactions (EBTs). The EBTs work= =20 as follows: Once a customer selects a new energy supplier, the energy=20 supplier=20 and the local distribution company (LDC) must continue to share information= =20 about that customer. This proprietary data, shared strictly on a one-to-one= =20 basis between the energy supplier and the LDC only, will include billing,= =20 usage and payment information. Essentially, an LDC will read the meter=20 and send usage information to the energy supplier, who will calculate its= =20 portion of a customer's bill and in turn send this data back to the LDC,=20 which will submit the customer bill. This represents a common way for billi= ng=20 in Ontario, although there are other options including consolidated billing= =20 that originates from the energy supplier and split billing coming from=20 both the LDC and energy supplier. No customer information will be exchanged= =20 until competition officially begins in Ontario, which now appears to be=20 in the spring of 2001, although the technology infrastructure supplied=20 by Excelergy is already in place. In response to the OEB's mandate, Toronto Hydro Corp. and Ontario Power=20 Generation=01*the largest players in electricity distribution and generatio= n=20 in Ontario=01* became equity partners in the $7.7 million joint venture to= =20 create EBT Express. All customer data will be contained within EBT Express,= =20 which is supported by the eXACT technology. Excelergy eXACT is a software= =20 solution that translates, validates, manages and delivers data exchanged=20 among users. The functionality of eXACT has been used in several U.S. state= s,=20 including Pennsylvania and New Jersey. In fact, eXACT was introduced to=20 gas and electricity retailers in the United States in 1999 as a component= =20 of Excelergy ABP=01v, a billing and customer information solution. Alleghen= y=20 Energy Supply, a subsidiary of Allegheny Energy, was one U.S. utility that= =20 I know of that used the Excelergy technology.=20 Caraghiaur contends that EBT Express will play an important role in enhanci= ng=20 the competitive market in Ontario. "There are presently 37 licensed retaile= rs=20 in Ontario, 15 pending retailers and 246 LDCs," Caraghiaur told me. "You=20 can imagine the cloud of communication pathways that would occur between=20 all these players without a centralized hub such as EBT Express." The numbe= r=20 of LDCs seemed awfully high to me, but Caraghiaur explained that in Ontario= =20 many LDCs serve only a small number of customers, often 100 customers or=20 less. This should change as consolidation reduces the number of LDCs in=20 Ontario but, when compared to the United States, Ontario still will have=20 a comparatively high number of distribution companies.=20 Caraghiaur cited Pennsylvania as an example of a market that has tried=20 to assimilate communication among many market participants. Pennsylvania,= =20 along with most other U.S. states, still uses electronic data interchange= =20 (EDI) as its standard, wherein every LDC has a slightly different=20 interpretation=20 of data that is shared through the EDI. This can often cause communication= =20 inconsistencies and retailers may have a difficult time in getting ready=20 for deregulation. "EBT Express will be in the position to enforce standards= ,"=20 says Caraghiaur. "The use of XML in particular will enhance communication= =20 between market participants." In fact, XML (extensible market language) is the cornerstone of eXACT as=20 it constructs a standardized language so that data can be exchanged but=20 still understood by different applications. Caraghiaur claims that Excelerg= y=20 is on the forefront of XML technology, which was expressly stipulated in=20 the EBT standards developed by the Advisory Committee to the Ontario Energy= =20 Board. XML is a common language used on the Internet that makes it easier= =20 and more cost-effective for buyers and sellers to exchange data between=20 applications and data sources that otherwise might have been incompatible.= =20 In addition, Excelergy's eXACT software is object-oriented, allowing for=20 easy and rapid change from one program to another.=20 Clearinghouse exchanges are definitely a trend in the energy industry.=20 Whereas states that previously deregulated, such as California and=20 Pennsylvania,=20 did not use a centralized clearinghouse for customer information, states=20 and provinces now formulating their restructuring plans often mandate them.= =20 For instance, Excelergy's competitor Logica has a market data clearinghouse= =20 built for the Midwest market. Also, the ERCOT-ISO has teamed with Andersen= =20 Consulting on a similar market data clearinghouse for the Texas unbundling,= =20 scheduled for pilot in the summer of 2001 and full market opening in Januar= y=20 2002. One concern that market participants may have is the sharing of customer=20 data through EBT Express, especially when it is backed by potential=20 competitors=20 in the Ontario market such as Toronto Hydro and Ontario Power. Caraghiaur= =20 responded to this by saying that the OEB mandated the exchange of customer= =20 information through an EBT structure. However, market participants are=20 not mandated to participate in EBT Express. They could opt to still exchang= e=20 information on a point-to-point basis, although Caraghiaur believes that=20 EBT Express offers a much more efficient forum for the transfer of customer= =20 data. In addition, Caraghiaur reiterated that no proprietary or competitive= =20 information would be accessible between any parties other than the LDC=20 and energy supplier involved in the exchange. Interestingly, Toronto Hydro and Ontario Power may be competitors when=20 the Ontario market opens next year. Toronto Hydro Corp. owns Toronto=20 Hydro-Electric=20 System Limited, a regulated electricity distribution system, and Toronto=20 Hydro Energy Services, a competitive energy service company. Ontario Power= =20 Generation is an electricity generating company, so Toronto Hydro and Ontar= io=20 Power will be competing on the retail level to acquire energy supply=20 contracts=20 with lucrative customers. And rumor has it that venerable retail giant=20 Sears is also taking a look into becoming an energy retailer in Canada=20 next year. As Canada continues to deregulate and attract energy suppliers,= =20 Excelergy anticipates that the EBT Express could serve a national market. =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D For a an in-depth perspective on the market potential of distributed=20 technologies,=20 SCIENTECH is offering Stephens Inc.'s (Investment Banker) 97-page report,= =20 "Powering the Digital Economy" on its Website at:=20 http://www.consultrci.com/web/infostore.nsf/Product-Preview/UtilityAdvisor= =20 free for a limited time only.=20 =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D SCIENTECH is pleased to provide you with your free, daily IssueAlert. Let= =20 us know if we can help you with in-depth analyses or any other SCIENTECH=20 information products. If you would like to refer a colleague to receive=20 our free, daily IssueAlerts, please reply to this email and include their= =20 full name and email address or register directly at: http://www.consultrci.com/web/infostore.nsf/Products/IssueAlert Sincerely, Will McNamara Director, Electric Industry Analysis wmcnamara@scientech.com =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D Feedback regarding SCIENTECH's IssueAlert should be sent to=20 wmcnamara@scientech.com =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D SCIENTECH's IssueAlerts are compiled based on independent analysis by=20 SCIENTECH=20 consultants. The opinions expressed in SCIENTECH's IssueAlerts are not=20 intended to predict financial performance of companies discussed or to=20 be the basis for investment decisions of any kind. SCIENTECH's sole purpos= e=20 in publishing its IssueAlerts is to offer an independent perspective=20 regarding=20 the key events occurring in the energy industry, based on its long-standing= =20 reputation as an expert on energy and telecommunications issues. Copyright 2000. SCIENTECH, Inc. If you do not wish to receive any further IssueAlerts from SCIENTECH, pleas= e=20 reply to this message and in the body of the email type "remove."
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