News Release
April 13, 2000

Large Energy Companies Forming Internet Trading Platform

KANSAS CITY, MO, April 13, 2000 - Six of the largest gas and electricity marketers in the U.S. today announced they have formed a new independent energy trading consortium, which will own and operate an Internet-based, business-to-business, over-the-counter energy trading platform. The new trading platform is expected to be in operation by the end of the year and will be open to all wholesale energy industry participants.

The consortium’s members are American Electric Power (NYSE: AEP), Aquila Energy, a subsidiary of UtiliCorp United (NYSE: UCU), Duke Energy (NYSE: DUK), El Paso Energy (NYSE: EPG), Reliant Energy (NYSE: REI) and Southern Company Energy Marketing, a unit of Southern Company (NYSE: SO). Each is among the top 10 U.S. marketers in either gas or electricity, or both.

"This Internet platform initially will offer an over-the-counter market place for natural gas and electricity in North America," said Paul Addis, President of AEP Energy Services, Inc. "But we expect to expand our business to include natural gas liquids, coal, weather derivatives, crude oil and other energy-related commodities and instruments as those markets develop."

The platform is expected to deliver a number of benefits to users compared to the smaller platforms, single dealer systems and phone brokers currently used for energy trading.

"We believe that online energy trading is the wave of the future. It may never fully replace the broker system, but we are hopeful its share of total trading will increase in the next few years, just as it has in foreign exchange and futures," according to Brad Karp, President of Duke Energy Merchants.

"Forrester Research’s estimates of the dollar volume by 2004 are $166 billion for natural gas and $101 billion for electricity, but the formation of a business-to-business platform of this scale and scope could accelerate the migration to on-line trading of energy and related products."

According to Forrester Research, only 2 percent of natural gas trading and 0.2 percent of electricity trading were conducted on-line in 1999. Forrester Research is forecasting these figures to increase up to 25 percent and 11 percent, respectively by 2004.

"Collectively we have the market presence and diversity of commercial transactions, both geographically and in terms of customers, to ensure that open, unbiased transactions are available to everyone," said Gary Morsches, President of Southern Company Energy Marketing. "We also believe this is the best opportunity for establishing standards for transaction settlements that will lower costs to the industry in general."

According to published sources, approximately 2.7 billion megawatt hours of electricity annually and 154 billion cubic feet of physical natural gas per day are traded in the U.S. In 1999, the six companies responsible for creating the new trading platform had combined annual electricity trading volumes of about 1 billion megawatt hours and physical gas trading volumes of about 42 billion cubic feet per day.

"The consortium members" trading volumes, coupled with their combined $61 billion in market capitalization, provide extreme liquidity and helps to ensure that the new platform will have the size and staying power that’s sometimes missing in a relatively new marketplace," noted Greg Jenkins, President of El Paso Merchant Energy

"We’re committed to making this an open and completely independent platform," noted Ed Mills, President of Aquila Energy Corporation. "This will allow the platform to provide the real-time price and data discovery that’s often missing in current trading systems. We expect other benefits will include enhanced liquidity, faster market execution and considerably lower transaction costs. "

"Formation of the trading platform provides an incentive for consortium members to transfer their current trading volumes from traditional sources to the on-line platform. It is also expected to attract others in the marketplace by creating a centralized, liquid platform offering greater market efficiency," stated Joe Bob Perkins, President of Reliant Energy Wholesale Group.

Initial discussions about the new platform were an outgrowth of the need to speed the resolution of problems related to insufficient liquidity, price discovery and transparency, the need for technological standards, greater communication and market efficiency. The consortium is involved in advanced discussions with several potential technology partners, including some of the leading trading technology vendors in North America.

This press release includes forward-looking statements, estimates and projections. Actual events and results may differ materially from statements, estimates and projections. Factors that could affect actual results include technology risks, market risks, business development/operating risks, and regulatory/legislative decisions and other factors.

Contact: Al Butkus
Phone: 1-800-491-1870
24 Hour Phone: 704-382-8333
Email: media_relations@duke-energy.com