April C. Murelio
Teaming up with the three largest brokers in the power and natural gas industries, PricewaterhouseCoopers plans to collate and market their power and natural gas transaction information through a new database system.
The three brokers-Amerex, Natsource and Prebon Yamane-account for about two-thirds of the brokered over-the-counter (OTC) transactions in the natural gas and electricity markets.
Marketed under the names PowerTrax and GasTrax, the databases provide access to OTC power and natural gas transaction data covering volumes, pricing, delivery points, and any basis trades for producers, generators, users, utilities, marketers, and traders.
“In the past, the only way electric and natural gas companies could access this type of data was through internally developed databases, many of which did not provide extensive or timely information,” said David Wilson, PricewaterhouseCoopers consulting partner.
As the industry continues to move toward a competitive marketplace, Wilson said access to accurate, transparent and comprehensive market pricing data becomes imperative.
Although all those involved with gas and electricity trading can access prices on regulated futures exchanges like the New York Mercantile Exchange and the Chicago Board of Trade, the PricewaterhouseCoopers database deals solely with the OTC market, where a good portion of the nation`s trading occurs.
PowerTrax consists of about 150,000 historical electricity transactions, with between 7,000 and 8,000 transactions added each month. GasTrax includes 185,000 historical gas trades, with monthly additions at about the same rate as the power database. Also, Wilson said PricewaterhouseCoopers plans to publish daily indices for the power and gas markets based on the information received from Amerex, Natsource and Prebon Yamane. The PowerTrax Index and GasTrax Index will be calculated on a volume-weighted average of each day`s power and gas trades at key delivery points.
“Every time brokers close deals, they take snapshots of the market, and that`s what these indices can provide,” said Mike Moore, a principal with Amerex in Houston. “Traders need access to the historical, so they can predict the future.”
PricewaterhouseCoopers plans to offer the databases, in whole or in part, to electric and gas companies, marketers, traders, banks and others.
Those interested can buy either the historical data with monthly or bi-monthly updates, or they can purchase daily data, which will be sent overnight. Prices vary on the amount of customization, which is entirely dependent on the client, said Mary Collins of PricewaterhouseCoopers.
The indices are calculated daily and published electronically on trade and business press web sites, including PennWell Publishing`s OGJ (Oil & Gas Journal) Online and Electric Light & Power sites. Site addresses are: (Insert at proofs) PennWell started posting PowerTrax in late April.
“The Midwest power market blow-up in June highlighted the critical need for comprehensive, readily available market data for power,” Wilson said. “Currently, there are many companies building new generating facilities, establishing marketing and trading operations, and in general, spending and exposing millions of dollars without adequate market pricing data.”