With 6% of the U.S. natural gas market, Electric
Clearinghouse Inc. is ready to take the next step in becoming a total
energy marketer, and that is build a similar business in the power industry.
"Certainly, natural gas and electricity
are very much intertwined commodities and becoming more so," explained
Dan W. Ryser, vice president and general manager of Electric Clearinghouse.
"We say with the advent of more open and competitive markets in power
we should be in a position to provide products and services that add value
to those players much like we've done in the gas business."
Ryser moved to Clearinghouse in late 1993 after
a 22-year career with Enron Corp., including president of Enron Gas Processing
Co., president of Transwestern Pipeline Co., executive vice president
of Enron Gas Marketing, and president of Houston Pipe Line Co.
In marketing electricity, Clearing-house plans
to tap the expertise it gained in playing a major role in the deregulation
of natural gas. "We think we have an understanding of evolving, deregulating
markets,Ó Ryser said. "It should put us in a position where we can
be as effective adding value in power marketing as we are in gas."
The interdependency of gas and power means Clearinghouse
will have an advantage in managing financial risks for its customers over
the companies that are marketing just one commodity. There are a lot of
differences between the gas and electric industries, but there are some
similarities too," Ryser noted.
At this point, Electric Clearinghouse is buying
from utilities, independent power generators, municipals and coops as
well as selling to that same group of markets. "It just depends on
who has production and who needs it, or who needs something like price
management or protection against one sort of a risk or another,"
he said. As an independent marketer, Clearinghouse has the flexibility
not available to utility providers.
"I would anticipate that over time more
and more industrial customers in North America will have the opportunity
to choose their own power supplier," Ryser said. "As those situations
develop or as that market evolves, we intend to be a supplier to that
market."
Clearinghouse's experience with access transportation
of natural gas has proven beneficial in signing interchange agreements
with electric utilities. "It's just a case of understanding the markets
and knowing who has the transportation capacity and trying to get the
best priced transmission capacity to conduct your business"' Ryser
explained.
Because Clearinghouse buys and sells gas all
over the country, if gas has a particular value now or into the future
it can equate that value to electricity in many cases. "So we can
arbitrage the differentials in those commodities, and do that in such
a way that we can provide some value-added services to our customers,
whether they're gas or electric customers," he continued.
"We just needs to figure out a way to provide
good products and services to our customers, and if we can do that we'll
have customers interested in doing business with us."
Clearinghouse became Dynegy in July 1998 and
Dynegy is merging with Illinova in January 2000. The new combined company
will be $7.5 billion in assets.
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