Utility companies buy wholesale electricity and natural gas routinely, shopping for the lowest bids they can find in online auctions to help them meet customers’ fluctuating energy demands.
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Utility companies buy wholesale electricity and natural gas routinely, shopping for the lowest bids they can find in online auctions to help them meet customers' fluctuating energy demands.
Though largely invisible to everyday ratepayers, the auctions are an important way for utilities to ensure they buy power at the fairest prices available. That purchasing activity is enabled by a competitive niche industry that offers auction software and related services.
Now, an East Windsor startup is hoping to break into that market with its own energy-auction software.
Bidwell Energy was founded late last year by Elisabeth Charnley Bottomley, Lorraine Alexander, Tim Lockwood and Russ Monroe, who all used to work for Worcester, Mass.-based World Energy Solutions, a pioneering company in the online-auction space. All four left not long after World Energy was acquired in 2014 for $77 million by Enernoc, which recently rebranded as Enel X and maintains a dominant presence in the auction market today.
Bidwell recently acquired a wholesale-energy auction platform called Pricelock from a now-defunct California company. It's changing Pricelock's name to Bidwell.
Charnley Bottomley said she was impressed by Pricelock when it hit the market years ago, seeking to compete with her then-employer World Energy.
She and Alexander had long discussed forming a business in the wholesale-auction space. Those talks took on momentum a year ago, when they learned the technology was for sale.
Now she and her team own it, and are developing new features with hopes of convincing utilities to use it. Their other customer targets are power generators, energy marketers and commodities traders, who pay commissions for the using the service.
The Bidwell partners, three of whom operate another local company called Yolon Energy, which is a retail energy supply broker for commercial and industrial clients, hope their expertise and industry relationships will allow them to take the Pricelock platform further than its prior owner could.
While Pricelock (now Bidwell) had eye-catching features when it came on the scene, it ultimately couldn't make the sales it needed, Charnley Bottomley said.
One advantage of the platform is that it can be customized, which Alexander said could help as Bidwell tries to win business in a competitive space.
“Earning the right to customize the live-streaming procurements for utilities is a tall order,” she said.
A normal auction involves a seller trying to get the highest price they can. But energy auctions turn that notion on its head, with a buyer trying to attract the lowest possible price.
Bidwell specializes in what's known as “Anglo-Dutch” auctions. It's a hybrid of two traditional auction formats. The “Anglo” portion means bidders are allowed to see other bids in close to real-time, but there's a “Dutch” auction component that includes sealed offers invisible to competing bidders.
“[Bidders] can see themselves getting underbid in real-time,” Alexander said. “It creates an anxiety through human nature. It drives the bidders to try to win.”
Editor's note: This story has been updated to clarify that Bidwell has renamed the Pricelock auction platform
