ATLANTA/ALBANY, Calif. – Southern Company Energy Marketing, a seller of wholesale electricity, in March formed a partnership with Web-based electricity broker Utility.com Inc. to become the preferred supplier of electricity to Utility.com’s customers.
The partnership allows Southern Company to offer wholesale electricity and other utility services to individual customers and small businesses that wish to buy utilities online. In exchange, Utility.com can depend on Southern Company to provide wholesale electricity at competitive prices, as well as forecasting, scheduling and risk management services.
As the United States utilities industry becomes deregulated on a state-by-state basis, energy companies are being forced to operate in a competitive environment. Partnerships between traditional electricity suppliers and Internet ventures, mean that customers can pick and choose a distributor of their choice and not be restricted by the solitary local carrier (VCJ, January, page 40).
Poised to cash in on the deregulated utilities industry, venture capitalists are placing bets on technology companies that will differentiate one energy company from another. Utility.com nabbed the attention of idealab!, idealab Capital Partners, Primedia Ventures, TL Ventures and Moore Capital Management, investors in the company’s $6 million first round of financing, which took place in May 1999. All of the original backers are returning for the company’s second round and will be joined by some newcomers, including Southern Company, though no details about the second round financing have been released.
Utility.com, based in Albany, Calif., uses its proprietary technology to offer electricity purchases and Internet access, and eventually will offer gas, telephone and DSL services. The company is registered to provide electricity in Arizona, California, Massachusetts, Nevada and Pennsylvania and seeks licenses in 23 other states and the District of Columbia by the end of 2001.
Southern Company, jointly owned by Southern Energy and Vastar Resources Inc., provides energy marketing, risk management, trading and financial services, as well as other energy-related products and services to wholesale customers in North America.