Net Exchange Speaks at Eye for Energy Conference in Amsterdam

Net Exchange provides insight into evolution of energy trading

SAN DIEGO, CA, March 28, 2001 – Dr. Charles Polk, president and founder of Net Exchange, the leading deal optimization solutions company, led a panel at the Eye for Energy Europe conference in Amsterdam. Dr. Polk is an economist who specializes in designing marketplaces according to economic principles.

The panel gathered leaders from the European energy industry to discuss such issues as European deregulation, the future of European trading exchanges and what online business models best serve the needs of the European energy industry.

Net Exchange has pioneered the discipline of market architecture where economics is used to direct the application of technology so that markets are broader, tighter and superior networks of exchange than existing markets. Markets designed using Net Exchange's technology and economics-based approach enable long term contracting while accommodating secondary spot trading. Such a design is highly relevant to how power is traded both in the United States and Europe. Such applications could provide valuable solutions to the problem of balancing long-term contracting with immediate needs, not unlike the difficulties California faces in its deregulation.

"Precious few of the deregulated markets in the energy industry are geared toward accomplishing the purported goal of deregulation, the effective balancing of supply and demand through market forces," asserts Dr. Polk. "Based on what we have seen in Europe as well as California, deregulation requires, first and foremost, well-designed market mechanisms. Regardless of location or industry particulars, difficulties encountered in deregulation can be remedied by designing a market to, rather than attempting to control, the economic forces governing that industry."

At the conference, Dr. Polk led a discussion on the development of European energy trading. He comments, "Online energy trading, whether in Europe or the United States, has overlooked the need for a relevant matching process such as portfolio matching that enables parties to trade across multiple items, firms and time periods. Relying instead on linear bidding systems, current difficulties demonstrate that such processes are inadequate for the complex needs of power generators and consumers."

Net Exchange is uniquely qualified to address the evolution of the online energy market, having designed, engineered and built the first e-marketplace for trading emissions credits in Southern California. Since then, the company has designed markets for the transportation and financial services industries.

About Net Exchange

Net Exchange is the experienced provider of solutions that optimize the value, immediacy, and adaptability of transactions that comprise deals. Key to this capability is Net Exchange’s proprietary methods that deliver Total Deal Optimization across the lifetime of a deal. In May 1994, faculty from the California Institute of Technology formed Net Exchange to commercialize solutions based on advanced research in computational combinatorial deal-making (CCDM). These solutions marry planning optimization techniques with deal-making and help firms to increase the value of deals with their trading partners. Higher value deals result from superior transactions that lead to an expansion of commerce among firms. To date, Net Exchange has developed deal optimization solutions for logistics, financial, and derivatives trading. For more information about Net Exchange, visit www.nex.com, or call (858) 724-0390.