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SCIENTECH IssueAlert, November 29, 2000
Peace Software Lands MidAmerican Energy Account
By: Will McNamara, Director, Electric Industry Analysis
===============================================================

Peace Software, a global provider of leading e-business solutions for retail
energy companies, announced that MidAmerican Energy Company, a supplier
of energy in the Midwest's deregulating market, has selected Peace's Energy
software suite for a rapid entry into multiple deregulated markets. "Peace
Energy is a better system for serving our unregulated electric and gas
customers since we now have the capability to bill for multiple fuels,
services and locations on a single statement," said Todd Raba, vice president
of market and sales at MidAmerican Energy.

ANALYSIS: This could materialize into a very strategic alliance for both
companies. On the national or international stage, Des Moines, Iowa-based
MidAmerican may not be considered a major player. Yet, within the Midwest,
it is a recognizable brand name and sizeable presence. The company and
its subsidiaries manage and own interests in more than 10,000 MW of 
diversified
power generation facilities around the world, providing both regulated
and unregulated electric and natural-gas services to more than 1.3 million
customers in six states and the United Kingdom (through its Northern Electric
& Gas subsidiary). In August, MidAmerican made its move into Ohio, the
fourth largest U.S. market in terms of customers (behind California, Texas
and Florida), indicating that the utility intends to aggressively grow
in the retail sector and gain a corner on the increasingly competitive
Midwest market. Just last Monday, MidAmerican became the first energy company
to become registered as a certified retail electric supplier (CRES) in
the Cincinnati Gas & Electric Co. territory in southwest Ohio.

An essential element to the utility's growth is a comprehensive billing
software system, which is where the value of Peace Software comes in. 
According
to MidAmerican, it aims to be able to provide customers with online energy
usage and billing data on a 24/7 basis. Also important to MidAmerican as
it enters different states is the elimination of "several automated and
manual processes required by our current system." This can result in a
real cost savings for an energy company as it can eliminate back office
functions such as taking calls for final reads and address changes, all
of which can be handled directly by the customer through online software.
In this particular case, Peace's Energy software will provide to MidAmerican
customers several self-serve features, including customer enrollment, summary
billing, more flexible due dates and electronic payment options. The Energy
System was developed for retail energy companies and is capable of handling
many functions required by retailers, from enrollment and registration
to billing to settlement and load forecasting. The last two features are
particularly noteworthy as, up to this point, they have been rarely found
in billing software. Many systems in the United States today are building
this competency or are "bolting on" the technology; Peace already offers
it in a "one-stop-shop" tool.

Peace Software is a growing company and had secured some key utility contracts
prior to this one with MidAmerican, including Enron, BC Gas, Dominion Retail,
Nordic Electric, Exelon Energy, and Pepco Services. The company is based
in Atlanta and maintains a large presence in its country of origin, New
Zealand, the first country to deregulate its electric utilities.

I spoke with Brian Peace, CEO of Peace Software, last June and he gave
an overview of how the Energy System functions. First, the Energy System
is centered around the UNIX operating system and thus can be moved and
upgraded from one hardware platform to another. Since its start in 1988,
Peace Software has designed the Energy System around a multiple-product
architecture that has enabled the company to encapsulate water, gas and
electricity into one product suite. Currently, the system handles not only
those three commodities, but also can consolidate billing information related
to telecommunications, home security, home mortgaging and other value-added
commodities and services. The end result is that an energy service provider
can group all of its services into one bill stating one cost, which is
a market edge against competitors that only provide multiple billing.

At the time of our discussion, Peace said, "ESPs can no longer just rely
on a commodity margin anymore. They've got to be able to buy it at the
right price, combine it with the right services and then deliver it in
a very convenient way to the customers. This is the path to being competitive
and profitable."

Over the last decade, Peace Software gained a real lock on the New Zealand
market, and began selling its technology in the United States in 1997.
That same year the company secured a contract with Enron, which at the
time owned Portland General and was attempting to penetrate the California
retail market. Of course, Enron ultimately extinguished its retail marketing
efforts in California, but still uses the Peace Energy software as it 
continues
to penetrate other markets. Peace Software's alliance with InSITE*a New
York-based application service provider*has led to providing the software
for the billing needs of Exelon. Brian Peace has said that for all of these
utilities the key value of the software is the added convenience that they
can market to new customers.

Of course, although Peace Software's contract with MidAmerican certainly
elevates the company and gives it additional stature in the Midwest market,
the billing software business presents stiff competition. Perhaps the two
greatest competitors for Peace Software are SCT and Excelergy. SCT offers
the SCT Banner product, which was originally created to bill multiple 
commodity
customers in the utility environment and has done quite well. ENLOGIX uses
the SCT Banner system to support multi-services across its client base
including gas, financing, ancillary products, electricity, water, and solid
waste. Excelergy was incubated in the deregulating states of the Northeast
while Peace was incubated in the deregulating markets of New Zealand and
Australia. Peace Software and Excelergy also have recently made their own
inroads into the gas markets. Peace has entered the Canadian gas market
by implementing its Energy software product at BC Gas, headquartered in
Vancouver, which serves about 750,000 customers. Excelergy has implemented
its billing product at Boston Gas, which serves about 535,000 customers.


As competitive ESPs attempt to secure new customers in deregulating markets,
one of the key advantages will be a convenient and multi-faceted billing
and customer care system. Facing a cloud of rather similar pricing offers,
customers may be more enticed to select an ESP that offers the value-added
service offerings found in software developed by Peace and its competitors.
MidAmerican has branded itself with the tag line "Obsessively, Relentlessly
At Your Service." The company is obviously making customer service a 
centerpiece
of its competitive strategy by adopting the Peace Energy software suite
to support its entry into new markets.
==============================================================
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Sincerely,

Will McNamara
Director, Electric Industry Analysis
wmcnamara@scientech.com
===============================================================
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