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The uE: New Standard For Pricing.

What's the price of energy? That's the question on everyone's mind these days, from energy executives and regulators to the financial community and consumers.

As we've dramatically witnessed over the past year, the energy markets have become increasingly more integrated and dynamic, ushering in a new era of price volatility and consumer choice.

This new economy calls for a new tool for energy stakeholders to better measure, compare and manage the real `price of energy.' This type of tool already exists in the equity markets where the Dow Jones and NASDAQ averages have long served as "barometers" for the overall "price" of the market.

Now a similar "barometer" for the "price of energy" has been developed, tested and made readily available. It is the Williams uE, a single, reliable source for cross-commodity energy pricing and can be found on

Pronounced you-ee, it stands for "universal unit of energy" and equates to one million British thermal units (MMBtus). By converting diverse energy commodity pricing to Btu-equivalents, the Williams uE is able to aggregate and compare different energy units like megawatts, barrels and gallons into a single measure.

The uE is a composite, weighted average price of the major end-user energy commodity groups including electricity, natural gas, crude and refined products and natural gas liquids.

Together these commodities represent 84 percent of the total U.S. energy consumption from the residential, commercial, industrial and transportation sectors, making it an excellent proxy for the entire market.

The "uE" pricing model utilizes published EIA consumption data from the Department of Energy to weight and seasonally adjust commodity pricing. Prices are taken for the major regional liquidity trading points for each commodity and sourced from recognized industry-standard sources and indexes.

The uE model has been rigorously developed, beta-tested, reviewed by industry and refined over a two-year period. Additionally, an extensive daily price history database, dating back to 1997, exists for the uE.

The uE is in two useful forms: spot and forward. The National Spot uE is a snapshot of yesterday's national composite "spot" closing price for energy. Updated daily, the National Spot uE is also reported as four Regional Spot uEs: the Northeast, Gulf Coast, Midwest and West energy regions. These regional uEs are rolled up to calculate the National Spot uE and dramatically highlight the regional differences in the "price of energy."

The Forward uE is a real-time picture of where energy pricing is moving for future months. Calculated using real-time New York Mercantile Exchange (NYMEX) pricing for power, natural gas, unleaded gas and propane, the Forward uE is constantly updating market expectations for future composite energy pricing.

Williams premiered the uE on Oct. 23, 2000 on where daily commentary and historical price charting of the uE can be accessed. Plans are being made to broadly expand the uE's availability with other energy publishers and outlets. Circle #200

Bill Hobbs, President, Williams Energy Marketing & Trading, Tulsa, OK
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Comment:The uE: New Standard For Pricing.(
Author:Hobbs, Bill
Publication:Pipeline & Gas Journal
Article Type:Brief Article
Geographic Code:1USA
Date:Jul 1, 2001
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