ICE cool over EnronOnline’s revival

Atlanta-based trading portal IntercontinentalExchange (ICE) remains bullish about its prospects, despite the re-launch of a repackaged EnronOnline. The new version of the bankrupt Enron’s Web-based energy market was launched on February 11 by Swiss investment bank UBS Warburg, which acquired the system and traders for free but has an obligation to share proceeds with the collapsed energy firm’s administrators.

Since traders became unwilling to transact with Enron over its one-to-many market after credit doubts arose in November last year, ICE has reported greater volumes as online energy traders turned to other portals.

Rafael Pirutinsky, ICE's vice-president for sales and marketing, reacted coolly to suggestions that Enron has embarked on a PR campaign of which the aggressive old Enron would have been proud. “We should not be compared to EnronOnline,” he said. “If anything, the collapse of EnronOnline completely vindicates the many-to-many exchange model that ICE employs, and not the one-to-many system that Enron pursued.”

Pirutinsky does not feel that ICE is particularly threatened by the new exchange, UBSWenergy, which so far lists only nine contracts in US gas and power – a large difference to the 1,500 instruments offered by Enron at its peak.

ICE is confident that it can maintain its lead over UBS Warburg’s new portal through its matching system and a series of commercial initiatives to retain business and attract new clients. These ideas include offering straight-through-processing and near-instantaneous ‘e-confirmations’.

But ICE’s long-term strategy does not hinge on the traders, many of which have already naturally looked at UBS Warburg’s new system. “Traders are a fickle bunch,” said Pirutinsky. “They are looking out for interesting spreads and a good profit. But we’re not just after the buy-in from the traders – we need the buy-in from the companies they work for.”