What’s next for big industrial power buyers?

Buying at wholesale, says Scott Helm, president of American PowerNet. “It’s the next logical step for large retail users,” Helm believes (www.americanpowernet.com). It’s a company that has been quietly finding sizable savings for five years for Fortune 500 companies and soon a major university. An industrial firm with at least a 10-mw load and good credit can save 5-10% over retail deals and find lots more suppliers.

One customer, he explained, got just two offers from retailers but at wholesale won 28 offers from eight wholesalers. Wholesale is a “whole vibrant market most customers don’t see,” he noted, because most retail customers don’t test the wholesale waters.
“They’re not going to come to you,” he added from his office in Wyomissing, Pa, a suburb of Reading.

Regulators and RTO administrators have been “generally supportive” of large users seeking wholesale buying licenses, Helm said, and his firm helps with the process. American PowerNet has been working with companies for several years, helping them apply for and negotiate member licensing, collect and aggregate account data, develop and award bids as well as negotiate and maintain supply contracts in several RTOs.

So far, PJM has been the easiest for retail customers buying wholesale, Helm told RT, but his firm has worked with clients in ERCOT, New York and NEPOOL and will operate in MISO when it opens. The company helps assemble a portfolio of short- and long-term supply contracts with spot buying then manages the back-office scheduling and balancing.

American PowerNet’s staff is made up of utility and power marketing veterans with decades of experience, said Helm, who himself has been with the firm for a dozen years, moving from retail energy management to what he sees as a potentially huge wholesale business. Customers often say: “Looks great. Prove it to us.” The concept does work, he said, and savings are considerable even with ISO/ RTO fees.

American PowerNet does most of the work. The wholesale market opens up a whole new world of price transparency and liquidity besides being the cheapest way to buy power (610-372-8500), he added.

Reproduced from the February 18, 2005 issue of Restructuring Today with the permission of the publisher, GHI LLC
(+1-202-351-6880, www.restructuringtoday.com).