Today’s electricity traders buy and sell power based solely on supply side alternatives: power plants and transmission line loadings. Tomorrow’s traders will include the demand side: the customer’s choice of curtailing, shifting, storing electricity and/or running their on-site generation. An exchange that includes the demand side as a power option does not yet exist – yet.

Utility companies historically attempted to interest customers in load management for system reliability considerations: concerns over power supply and/or delivery across their system. Incentives were offered based upon traditional costs and regulated tariffs. Customers were only called upon during system emergencies (at least in theory). In the future, the economic signals will primarily come from the day-ahead wholesale spot market for electricity. Utilities that are net purchasers during the on-peak period will look to the demand side to reduce their purchases, while utilities that are net sellers of capacity will do the same to maximize export potentials.

It is also already clear that the new market price signals will not come from generation alone. Constraints in the transmission and distribution system, along with potentially costly system losses due to high line loadings, will increasingly push for demand side alternatives. However, today’s energy traders do not consider the demand side in their positions. And, customers do not yet know how to bid their willingness to participate in the market. Nor do customers understand how to interpret wholesale electricity markets and rationally monetize their alternatives.

Traders also want to plan and play these alternatives against supply side options. These plays are based upon the cost and flexibility they provide in planning a least-cost energy supply portfolio. That is why we also call the concept "Integrated Resource Trading." It is valuable to the wires companies because it maximizes throughput while minimizing concerns over system reliability. This is also valuable to the energy producer because it delivers energy to the end use customer at a lowest total cost, and it permits the producer to sell a higher total value of energy.