An impressive group of US utilities is forming an Internet-based exchange to coordinate the purchase of goods and services.

The intention is to use the Internet to broaden the base of suppliers and negotiate lower prices.

The list of partners involved in the venture reads like a Who’s Who of US utilities: American Electric Power; Cinergy; Consolidated Edison; Duke Energy; Edison International; Entergy; FirstEnergy; FPL; PG&E; Public Service Enterprise Group; Reliant Energy; Sempra Energy; Southern; TXU; and Unicom.

The business-business exchange will function as a clearing house where energy companies will post information on their procurement needs and where suppliers can respond with bids.

There is no reliable estimate of the amount of business that might be carried out through this exchange, but some participants are expecting it to be worth “billions of dollars” to be carried out. One executive estimated that procurement savings could reach 10-30 per cent.