Altra faces a challenge, not only from other online energy trading companies such as Houston Street Exchange, but also from US energy services such as Enron Online. In additon, new entrants in commodity trading such as True-Quote and RedMeteor.com are offering more advanced technology and different business models. Top companies like BP Amoco and Dutch/Shell to US gas and power firms are responding to the industry by planning e-commerce ventures with their consortium. Altra’s strengh has lead them through this competitive atmosphere into a position maintaining over half of the country’s sport market natural gas liquids in 2000. Currently, Altra has 10% of the natural gas market.

Designed by and for power traders, Houston Street Exchange is a majority-owned subsidiary of BayCorp Holding, Ltd. Houston Street represents the first fully Web-based trading platform that serves as a portal for the power traders. This platform allows the traders easy access to critical weather energy news, global marketing, financial information and other direct links necessary for trading electricity. Traders use HoustonStreet.com to obtain real-time pricing and to receive the most informed deals over the Internet. HoustonStreet.com also tracks all the bidding processes, posts offers, and sets bids to time out to prevent any discrepancies.

Houston Street’s Crude trading platform is designed specifically for trading U.S. domestic crude oil. On the trading platform, the user can view grades, locations, delivery periods and price basis, with sharpest market bids and offers display side by side. A power trader can build on a trade and negotiate with any bid or offer, as well as create, modify, cancel or hold any positions. Their Refine Product trading platform allows users to customize and view trading activities, enhancing the focus on the locations and products most frequently traded. Houston Street has also designed a user loyalty program to reward traders based on their site usage.

Enron online is Enron’s B2B website. This website covers markets all over the world including gas, power, oil and refined products, plastics, petrochemicals, liquid petroleum gases, natural gas liquids, coal, emission allowances, bandwidth, pulp and paper, metals, weather derivatives, credit derivatives, and steel. Enron Online covers virtually every major energy market in the world. It offers not only real time pricing, but also fast, free, secured execution. Enron also provides market news and quotes, industry publications, weather information, including complete customization capabilities. Complete Customization allows the customer the ability create different page tabs for the products of interest. Through this design, customers are able to control which of their employees can access Enron Online, specify whether they can execute transactions, and, designate which commodities they're authorized to trade.

Designed by market participants, True-Quote offers comprehensive, real time trading information combined with online execution to enable energy professionals anywhere to know the current state of the market, and to act on it. The system provides current data and utilizes a "push" technology to ensure instantaneous updates. True-Quote's participants "paint the screen" so you can see the true picture of the entire market, and online trading on firm numbers. An open architecture allows anyone currently trading in the energy market to post bids and offers and to transact upon those orders directly (online trading) or to complete the transaction. The advanced technology behind True-Quote allows for easy customization between commodities. The suite of products will initially include True-Quote for Natural Gas, True-Quote for Power and True-Quote for Coal. Other commodities will soon follow. True-Quote provide a customized application, making it perfect for forward price curves and "at risk" calculations.

RedMeteor.com is the first energy-trading site to offer multiple commodity options, personalization, real time communications and universal data compatibility all on single neutral platform. It operates an integrated broke-enabled digital marketplace for energy industry and constructing digital marketplaces for third parties. RedMeteor markets crude oil, refined products, natural gas, natural gas liquid and power with more than two billion-dollar transactions each month. Technology and unsurpassed broker knowledge is the core focus for RedMeteor.

The company also licenses ReDEX, an internet-base exchange engine, and TRANSTORE, a private-commodity marketplace software. "Exchange Engine" targets companies seeking to create an anonymous online wholesale commodity marketplace. RedMetor’s "Branded Marketplace" targets companies that are active in commodity trading and seek to create private marketplace with their targeted customer. RedMeteor’s trading platform allows customers to select designed counter parties on a real-time basis to avoid transactions with high-risk companies.

The initial attempt in electronic trading system was Electronic Data Interchange, EDI. EDI runs through private communication networks or VANs among the larger players in the industry. With the adoption of Internet and the deregulation of energy, an electronic trading system is no longer the niche for these companies. Rusty Braziel saw the potential in Internet technology and initiated an online open exchange platform for energy trading, Altra® Market Place.

Altra enables buyers and sellers to bid and exchange energy commodities simultaneously, reducing acquisition time and costs, while remaining anonymous until a transaction is secured. Altra offers three initiatives: e-Gas for natural gas exchange, e-Liquids for trading natural gas liquids such as methane, propane and butane, and e-Power for electricity. In 2000 alone, Altra witnessed a 20 percent revenue increase in Altra Market Place. The company has received numerous designations from industry experts:

• AMR Research named the best B2B independent trading exchange across all industry categories in April 2000.
• Red Herring listed ALTRA as one of the top-50 private companies for a second straight year in May
• Honored as the best large-scale e-marketplace by VerticalZOOM in September 2000
• The Gartner Group in October named ALTRA the number one e-marketer based on its values of goods and services transacted for North America.

One distinct feature in Altra Market Place is anonymity. Altra allows participants to discreetly sell or buy without disturbing the market. The anonymity of trading parties enable a buyer who is acquiring a large quantity to break the demanded quantity into smaller procurements and trade under fair market price. Where as in the case of phone trades, the buyer is immediately identified and the supplier would have raised the price of the commodity in demand.

One major concern in the anonymous market environment is the participants’ credibility. Altra has enhanced consumer confidence by offering a software system to manage credit and risk exposure online, and provide insurance-based credit protection to the customers. When a user first enters Altra Market Place, he/she is prompted to set up the desired viewing criteria. The counter parties will then display on the screen based on his/her parameters. In addition, Altra takes responsibility for title and settlement of the shipment, in an effort to reduce perceived risk and to provide ownership for the completion of the process.

The exchange of energy does not end once the transaction is completed. Once completed, Altra provides additional services to facilitate the delivery process. Altra offers scheduling and aggregation facilities to most of the major energy hubs. This information is sent to the information systems of the seller and traders automatically, allowing the immediate transfer of resources.

Besides the online exchange portal, Altra offers software solutions and integration services to better the energy industry. Altra Market Tool, a suite of front, middle, and back-end software solutions. This software provides assistance from scheduling, risk management to invoicing. My Altra, a personalized content portal, enable customers to access industry specific information such as NYMEX pricing, news, and events to enhanced analysis decision making. The latest venture of Altra E-Business Solutions, a cooperation with Epicentric, creates proprietary, customer-branded portal applications for energy companies that help them enhance customer interaction and reduce operation cost.

Altra uses traditional-media based for advertisements. They consistently and continuously appeared in four to five trade and business publications that best target their audience, and, at the same time, offering them editorial opportunities. They also engage in annual industry trade shows, speak at industry conference, and sponsor local and national events and charity functions.

On the exchange, Altra assesses a transaction fee as well as subscription fee from the customers. In addition, a great portion of revenue comes from software license and e-business solution integration. The software and services together represent more than half of Altra ’s annual revenue. The initial software license fee average from $200,000 to $400,000.

Altra has formed several partnerships that have helped in establishing it as a leader in industry. Altra has partnered with Epicentric, Inc. to give companies a faster track for implementing e-business strategies, and improving operations. Through Altra and Epicentric’s partnership, a base for constructing EtoE solutions for Altra’s clientele will be provided.

Altra has alliances with two software distributors. One is Sema UK, which handles Western and Eastern Europe, the Middle East, and Africa, and the other is ITS Mexico, which covers all of Central and South America. Both provide installations, training, modifications, warranty, maintenance, and support services.

Epiko supplies support and maintenance for the TranEnergy products offered by Altra, currently assists in developing the EII compliant versions of the Altra Web product. Epiko also provides continuous development and maintenance of Altra Web Capacity Release products. In addition, Epiko collaborates with Altra engineering staff in efforts to provide optimal solutions.

Junot Systems provides Enterprise Integration Application solutions, which simplifies the process of connecting and integrating enterprise applications. In addition to working with Junot Systems, Altra is a Microsoft® Certified Solutions Provider and has a technological alliance with Microsoft® as well. This provides for technical assistance and direction on the development and deployment of applications using Microsoft® technology architecture.

Altra, Amerex, and Predon energy launched Altra de Power in an effort to provide the wholesale power industry with a single-point transaction liquidity. This organization is able to provide the tools necessary to compete in today’s ever moving and unstable marketplace.

Lastly, Pros Revenue Management provides revenue management applications for Altra. Pros is continually working on bringing together revenue management tools and Altra’s transaction management software suite.

eCommerce is progressing quickly in high-potential energy markets like natural gas and eletricity segments where total business trade exceeded $750 billion in 1998.

The Federal Energy Regulatory Commission (FERC) is forcing a separation between the sale of energy products and the capacity to move them from one location to another. As this action unlocks access to gas pipelines and electric grids, the market will open up for new online energy intermediaries.

The success factors for the energy online market are offering the customer more efficient, better customer service, and reduce processing cost. Today, the customer is choosing an energy provider other than utility, the choice to select a pricing and payment plan from a myriad of products created in a competitive marketplace. The energy industry can provide this choice by using the tools of electronic commerce for their maximum utility.

Energy marketing companies that survive, or even thrive, in this competitive environment recognize that energy marketing is an information business, a business whose basic assets are people, communications and information systems. As the energy business becomes increasingly dependent on efficient electronic commerce, the systems used to handle those transactions will singularly shape not only new opportunities evident in the evolutionary markets, but define each participant's competitive advantage in that market place. Electronic commerce has provided the opportunity for industry participants to conduct energy transactions more efficiently, rapidly and cost effectively. With transaction information being exchanged by computers in an aggregation of a second, energy marketing companies can now offer improved choices and greater selections for their customers.

Unpredictable factors like weather, plant capacity, and customer demand can cause dramatic imbalances between supply and demand in industries like energy and paper. A key component in the success of industry has been taken hold in these environments by maintaining real-time connections across a large population of ready buyer and sellers. Online markets like Altra Energy, for instance, will allow participants in Detroit to quickly purchase excess energy supply in Illinois when a cold snap hits Michigan.

Online intermediaries have flourished by automating transactions and simplifying information gathering. While these services have been sufficient to initiate early marketplaces on the net, They will quickly become commonplace.

Today utilities operate in a cost-plus world where margins are prescribed by regulators. As deregulation completes the cycle of separating energy sales from distribution, new online intermediaries will introduce marketing and branding into this flat landscape.