Pantellos members save $40 million in first three quarters of 2001

THE WOODLANDS, Texas, October 16, 2001 – Today Pantellos announced that in its first three quarters of live operations it has exceeded $280 million in deal flow, with members reporting approximately $40 million in savings.

Pantellos is a supply chain solutions company for the utility and energy services industries.

“These results demonstrate how members of the Pantellos trading community are meeting the challenges of a more demanding market,” said Graham Collins, CEO of Pantellos. “We are extremely pleased to be able to deliver these kinds of results in less than a year.”

Pantellos differentiates itself by providing the utility and energy services industries with a diverse range of tools and services that improve the entire supply chain, rather than forcing down prices. Working closely with its members, Pantellos combines its utility and energy expertise with supply chain insights and enabling technology to improve processes, create efficiencies and reduce costs. Some of these tools include forward and reverse auctions, Pantellos Collaborative Agreements, and workforce and project management solutions.

“As Pantellos grows, we are further tailoring our capabilities to the distinctive demands of the generation, transmission and distribution, corporate and non-regulated sectors of this rapidly changing industry,” continued Collins.

Examples of recent Pantellos events include: * PG&E Corporation’s National Energy Group (NEG) has held seven reverse auctions since March 2001, purchasing $130 million in materials and services with a total savings of $20 million. NEG’s first reverse auction was a purchase of 21 miles of steel pipe that involved suppliers in six countries. On this transaction, NEG saved 15 percent in total costs while reducing purchasing time from weeks to days. “We work with Pantellos to find new cost savings, widen our circle of trading partners and dramatically streamline our buying process,” said Curt McGee, director of business process integration for PG&E Corporation.

* Software House International (SHI), a minority-owned business, recently landed a large new customer with the help of a Pantellos Collaborative Agreement. Reliant Energy selected SHI to upgrade Microsoft products and help the utility choose the best option for its software licensing needs. Reliant was pleased with the supplier’s service and was able to increase its business with diversity suppliers, a Reliant Energy priority. “Working with Pantellos increases our ability to compete on a national and international basis,” said Jesse Evans, utility account manager of SHI.

* Cinergy Services and Cinergy Investments, both subsidiaries of Cinergy Corp., had similar needs for power transformers and had approached Pantellos separately. Pantellos recommended the two companies combine their requirements in a single reverse auction event that would deliver cost savings by leveraging their combined budgets. Both companies were able to realize a combined savings of 15 percent, as well as strengthen their relationships with new and existing suppliers. “We are finding it is smarter to use Pantellos’ Dynamic Solutions for one time purchases or infrequent buys, not only for the time and cost savings but also because it allows us to develop relationships with suppliers who may be beneficial in future projects,” said Donald Faris, manager, strategic sourcing, Cinergy Corp.

According to analyst firm IDC, worldwide purchasing through e-marketplaces will rise to $54.7 billion in 2001, a 269.2% increase over the past year. While analysts expect this trend to continue, IDC believes a marketplace’s success increasingly will be dependent on the ability to offer a broader and more innovative suite of services.

“The utility and energy services industries are going through a major transformation and are using this opportunity to review their current processes and capture savings at every link in the supply chain,” said Richard Villars, vice president of Internet and eCommerce at IDC. “The success of companies like Pantellos is a consequence of their efforts to deliver more than just the simple buying and selling found in a typical e-marketplace.”

About Pantellos

Pantellos is the supply chain solutions company for the utility and energy services industries. Built by the industry, for the industry, Pantellos offers members access to deep industry and supply chain expertise, a broad suite of supply chain solutions, an active trading community and -edge technologies. Pantellos is based near Houston, Texas, USA. For more information visit www.pantellos.com.

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