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	10/27/2000 06:33 AM
		 
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		 Subject: Toronto Hydro, Ontario Power Generation Launch EBT Express

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SCIENTECH IssueAlert, October 27, 2000
Toronto Hydro, Ontario Power Generation Launch EBT Express
By: Will McNamara, Director, Electric Industry Analysis
===============================================================

Toronto Hydro Corporation and Ontario Power Generation announced that they 
have launched an electronic business transaction (EBT) "hub" that will 
provide centralized electronic data management and transaction services 
to local distribution companies (LDCs) and energy retailers in Ontario. 
Called EBT Express, the exchange will become operational when Ontario's 
new competitive electricity market opens next spring. Excelergy eXACTv, 
developed by energy software solutions company Excelergy Corporation, will 
provide the technology infrastructure for EBT Express.

ANALYSIS: This is a significant development, as EBT Express represents 
the first hub in Canada for retail energy transactions. The site will serve 
as the central clearinghouse for immediate communication of customer data 
among hundreds of LDCs and energy retailers in Ontario, and possibly 
throughout 
Canada.  I spoke yesterday afternoon with George Caraghiaur, Exelergy's 
vice president, Canada, about EBT Express. Caraghiaur believes that the 
site "will provide the essential technology for opening Ontario's electricity 
market in an efficient manner." That is no small undertaking as there are 
an expected 300 players that will need to communicate with each other in 
Ontario once competition begins.

Deregulation is happening in Canada on a province-by-province basis (much 
like it is happening state-by-state in the U.S.). Thus far, only Ontario 
and Alberta have set dates when electric customers will be able to select 
a new energy supplier. Ontario is scheduled to become competitive next 
spring, and presently is the only region in which EBT Express will be 
operational. 
Alberta uses a point-to-point transaction process, which represents a very 
complex model. Caraghiaur believes that the value of EBT Express will be 
clearly seen, and there will be many opportunities for the hub in Alberta 
and elsewhere.

The Ontario Energy Board (OEB), which is the equivalent of a state PUC, 
mandated the use of electronic business transactions (EBTs). The EBTs work 
as follows: Once a customer selects a new energy supplier, the energy 
supplier 
and the local distribution company (LDC) must continue to share information 
about that customer. This proprietary data, shared strictly on a one-to-one 
basis between the energy supplier and the LDC only, will include billing, 
usage and payment information. Essentially, an LDC will read the meter 
and send usage information to the energy supplier, who will calculate its 
portion of a customer's bill and in turn send this data back to the LDC, 
which will submit the customer bill. This represents a common way for billing 
in Ontario, although there are other options including consolidated billing 
that originates from the energy supplier and split billing coming from 
both the LDC and energy supplier. No customer information will be exchanged 
until competition officially begins in Ontario, which now appears to be 
in the spring of 2001, although the technology infrastructure supplied 
by Excelergy is already in place.

In response to the OEB's mandate, Toronto Hydro Corp. and Ontario Power 
Generation*the largest players in electricity distribution and generation 
in Ontario* became equity partners in the $7.7 million joint venture to 
create EBT Express. All customer data will be contained within EBT Express, 
which is supported by the eXACT technology. Excelergy eXACT is a software 
solution that translates, validates, manages and delivers data exchanged 
among users. The functionality of eXACT has been used in several U.S. states, 
including Pennsylvania and New Jersey. In fact, eXACT was introduced to 
gas and electricity retailers in the United States in 1999 as a component 
of Excelergy ABPv, a billing and customer information solution. Allegheny 
Energy Supply, a subsidiary of Allegheny Energy, was one U.S. utility that 
I know of that used the Excelergy technology. 

Caraghiaur contends that EBT Express will play an important role in enhancing 
the competitive market in Ontario. "There are presently 37 licensed retailers 
in Ontario, 15 pending retailers and 246 LDCs," Caraghiaur told me. "You 
can imagine the cloud of communication pathways that would occur between 
all these players without a centralized hub such as EBT Express." The number 
of LDCs seemed awfully high to me, but Caraghiaur explained that in Ontario 
many LDCs serve only a small number of customers, often 100 customers or 
less. This should change as consolidation reduces the number of LDCs in 
Ontario but, when compared to the United States, Ontario still will have 
a comparatively high number of distribution companies. 

Caraghiaur cited Pennsylvania as an example of a market that has tried 
to assimilate communication among many market participants. Pennsylvania, 
along with most other U.S. states, still uses electronic data interchange 
(EDI) as its standard, wherein every LDC has a slightly different 
interpretation 
of data that is shared through the EDI. This can often cause communication 
inconsistencies and retailers may have a difficult time in getting ready 
for deregulation. "EBT Express will be in the position to enforce standards," 
says Caraghiaur. "The use of XML in particular will enhance communication 
between market participants."

In fact, XML (extensible market language) is the cornerstone of eXACT as 
it constructs a standardized language so that data can be exchanged but 
still understood by different applications. Caraghiaur claims that Excelergy 
is on the forefront of XML technology, which was expressly stipulated in 
the EBT standards developed by the Advisory Committee to the Ontario Energy 
Board. XML is a common language used on the Internet that makes it easier 
and more cost-effective for buyers and sellers to exchange data between 
applications and data sources that otherwise might have been incompatible. 
In addition, Excelergy's eXACT software is object-oriented, allowing for 
easy and rapid change from one program to another. 

Clearinghouse exchanges are definitely a trend in the energy industry. 
Whereas states that previously deregulated, such as California and 
Pennsylvania, 
did not use a centralized clearinghouse for customer information, states 
and provinces now formulating their restructuring plans often mandate them. 
For instance, Excelergy's competitor Logica has a market data clearinghouse 
built for the Midwest market. Also, the ERCOT-ISO has teamed with Andersen 
Consulting on a similar market data clearinghouse for the Texas unbundling, 
scheduled for pilot in the summer of 2001 and full market opening in January 
2002.

One concern that market participants may have is the sharing of customer 
data through EBT Express, especially when it is backed by potential 
competitors 
in the Ontario market such as Toronto Hydro and Ontario Power. Caraghiaur 
responded to this by saying that the OEB mandated the exchange of customer 
information through an EBT structure. However, market participants are 
not mandated to participate in EBT Express. They could opt to still exchange 
information on a point-to-point basis, although Caraghiaur believes that 
EBT Express offers a much more efficient forum for the transfer of customer 
data. In addition, Caraghiaur reiterated that no proprietary or competitive 
information would be accessible between any parties other than the LDC 
and energy supplier involved in the exchange.

Interestingly, Toronto Hydro and Ontario Power may be competitors when 
the Ontario market opens next year. Toronto Hydro Corp. owns Toronto 
Hydro-Electric 
System Limited, a regulated electricity distribution system, and Toronto 
Hydro Energy Services, a competitive energy service company. Ontario Power 
Generation is an electricity generating company, so Toronto Hydro and Ontario 
Power will be competing on the retail level to acquire energy supply 
contracts 
with lucrative customers. And rumor has it that venerable retail giant 
Sears is also taking a look into becoming an energy retailer in Canada 
next year. As Canada continues to deregulate and attract energy suppliers, 
Excelergy anticipates that the EBT Express could serve a national market.

===============================================================
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Sincerely,

Will McNamara
Director, Electric Industry Analysis
wmcnamara@scientech.com
===============================================================
Feedback regarding SCIENTECH's IssueAlert should be sent to 
wmcnamara@scientech.com
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