JOINING THE TREND among vertical industries, 15 of the top U.S. electric and gas companies are starting an Internet exchange to buy goods and services.

   ADVERTISEMENT
  

Free IT resource

Virtualization Insights from Top Experts - Learn how virtualization gets real!

Sponsored by Dell

Free IT resource

TechNet: More ways to know it, share it, and keep it running.

Sponsored by Microsoft

RELATED LINKS
»  AT&T buys high-speed wireless spectrum for $2.5 billion
»  Update: Sprint chief Forsee resigns
»  IT trainer offers master's degree for hackers
»  Wireless RSS feed 

IDG ENTERPRISE NETWORK
• More Network LAN/WAN News...  (ComputerWorld)
• Wireless EV-DO on board  (ComputerWorld)

TOP NEWS 


IT SOLUTION SEARCH

The automotive, aerospace, and chemical industries recently announced similar b-to-b (business-to-business) plans. Such efforts are generally aimed at increasing the number of suppliers from whom to buy goods, as well as lowering costs.

The consortium, announced Wednesday by the companies, is expected to start an independent for-profit company by June to handle the Internet exchange, which initially will be owned by the founding firms. Online proposals, price quotes, and auctions will be among the first set of services offered by the exchange, which is open for membership.

"The electrical-utility industry is highly fragmented," said Pat Hemlepp, a spokesman for American Electric Power Co., one of the consortium founders. "We have a lot of companies, including small and medium (-sized) companies buying the same kinds of items."

Doing so through one outlet on the Internet will allow the companies to take bids for items from suppliers, Hemlepp said. It also will provide suppliers with a single place to go to place bids and to drum up business.

The consortium members have not publicly stated how much they believe they will save in costs because the process of setting up the Internet b-to-b exchange is as yet in its early stages. Members should have a clearer sense of expected savings within the next few weeks, Hemlepp said.

The group of companies decided to set up the exchange themselves rather than hiring an outside consultant or company to handle the work because "we know our industry better than anybody on the outside," Hemlepp said. He added that it didn't seem to make sense to pay someone else to do the work that the founding companies can handle themselves.

The 15 companies announcing the consortium are American Electric Power, Columbus, Ohio; Cinergy, Cincinnati; Consolidated Edison, N.Y; Duke Energy, Charlotte, N.C.; Edison International, Rosemead, Calif.; Entergy, New Orleans; First Energy, Akron, Ohio; FPL Group, Juno Beach, Fla.; PG&E, San Francisco; Public Service Enterprise Group, Newark, N.J.; Reliant Energy, Houston; Sempra Energy, San Diego; Southern Co., Atlanta; TXU, Dallas; and Unicom, Chicago.

The group has hired PricewaterhouseCoopers to help with both developing the exchange and choosing a technology vendor to set it up. The Internet exchange is expected to be operating by the end of the year, Hemlepp said.