Power Engineering - OM initiates major industry study on how to improve capital efficiencies in the energy industry

New York, July 8, 2003 -- OM, a provider of transaction technology to the energy and financial services industries, announced that it has initiated an industry-wide study to assess how predictive and accelerated settlement solutions (PASS) can improve capital efficiencies in North American energy markets.

OM's U.S. office is conducting the study in cooperation with leading market participants. The results will be presented to National Energy Marketers Association (NEM) in late September.

The National Energy Marketers Association (NEM) is a national, non-profit trade association representing wholesale and retail marketers of energy, telecom and financial-related products, services, information and related technologies throughout the United States, Canada and the U.K.

"This study marks the first time in recent history that the energy industry has undertaken an overview of the positive impact PASS is expected to have on improving capital efficiencies," said Gary Lavey, vice president global risk management with Cinergy (NYSE: CIN). "We believe this study will prove, by implementing PASS, the capital efficiency of energy companies can be significantly increased - by up to 25 percent or more -- translating into substantial benefits for the industry and consumers."

OM has initiated the study under the guidance of the National Energy Marketers Association (NEM) and a group of leading utilities, including Cinergy.

"By improving the efficiency of capital in the marketplace, we believe PASS will dramatically change the way energy is traded," stated Gerry Vurciaga, OM's vice president of business development for energy markets, Americas and study director. "We are confident that this study will underscore the positive impact PASS can have on capital efficiency and liquidity and essentially allow the industry to do more with less."

The study will examine the benefits of PASS and the role it can play in today's evolving energy markets. The gap between forward and real time energy market settlements is typically six to eight weeks, resulting in longer than necessary market exposure and putting a burden on transaction capability.

To minimize risk and manage cash and credit more efficiently, settlement systems should have a daily predictive settlement function. PASS is designed to fill the gap between forward market settlement and real time market settlement by providing an estimate of credits and charges much sooner than real time actual measurements are available, increasing efficiency and mitigating risk.

"Real-Time, Predictive and Accelerated Settlement Solutions is a new and important tool for anyone participating in today's wholesale energy market," said Craig Goodman, President of NEM. "We plan to share the results of this study with our members and early indications are that this will become an invaluable tool for operating in today's face-paced restructured marketplace, said Goodman."

OM is a provider of transaction technology to the energy and financial services industries. Both a systems solutions developer and an exchange owner and operator, OM develops and markets trading, risk and settlement systems geared to central marketplaces and participants. An industry innovator, OM developed the first day ahead electricity spot exchange and the first commodities future exchange.

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