Energy Exchange to Power Up

SAN MATEO (08/10/2000) - The founders of a new business-to-business exchange for the energy industry are laying the groundwork for a launch by the end of the year, and have tapped Commerce One Inc. and SAP AG as the infrastructure technology providers for the global, direct and indirect procurement e-marketplace.

The exchange, called Enporion, has the backing of Allegheny Energy, New Century Energies, Minnesota Power, Northern States Power, and PPL, said Joseph R.

Zelechoski, director of procurement at PPL, based in Allentown, Pa. With this initial set of power companies, "we have the liquidity to make this company a success," Zelechoski said.

The exchange promises buyers and sellers greater efficiencies that will lead to shorter cycle times, lower inventories, reduced transaction costs, and enhanced profitability, according to the exchange founders.

"We have been working together for four months," said Zelechoski, who is also a member of the temporary board for Enporion. "We went through a selection process and considered Ariba and Oracle [as technology infrastructure providers]."

But SAP and Commerce One were chosen because their forthcoming combined product represents a "best-in-class" offering that will capitalize on SAP's supply chain and back-office ERP (enterprise resource planning) suite integration capabilities, Zelechoski said.

Securing links between inventory and purchasing systems on the buy-side and order-taking platforms for suppliers will be necessary for the replacement of paper-based and EDI transactions, Zelechoski said. "This marketplace will be integrated," he said.

Direct materials such as line hardware, transformers, boiler tubes and valves, and turbine generators and associated services such as engineering expertise will be traded over the exchange, Zelechoski said. Office supplies and other indirect goods will also be available via the exchange.

The new exchange is the first combined effort of Walldorf, Germany-based SAP and Pleasanton, Calif.-based Commerce One, since the duo declared in June that they would be working together to integrate applications with the buy-side e-marketplace offerings of Commerce One, SAP officials said. Cap Gemini Ernst & Young will provide business consulting for Enporion.

Eugene Grygo is an InfoWorld senior editor.

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