Procter & Gamble Plans Big Online Energy Buy

BOSTON (06/12/2000) - Cincinnati-based Procter & Gamble Co. plans to use online marketplace LLC to solicit bids for more than $100 million worth of natural gas for its manufacturing plants over the next year, the two companies announced today.

The one-year bid period starts July 1 for natural gas needs at 59 P&G plants in North America, said CEO Mark Jergens in an interview. To see P&G's bidding requirements, he added, utilities and other natural-gas providers have to become members of, which charges a standard monthly fee of $495 for large companies and also takes 1% of each transaction that it processes for buyers and sellers.

P&G decided to buy energy over the Internet in order to get greater efficiencies and to "bring savings to our vendors, customers and employees," said Michele Kidd, a purchasing manager at the $38 billion consumer goods manufacturer, as part of the announcement.

Large companies such as P&G for years have sought outside providers to help them aggregate large purchases such as natural gas. But this is probably the first example of such a large request for bids being made over the Internet, said Ethan Cohen, an analyst at Aberdeen Group Inc. in Boston. "This idea has been floated, but I've not seen it done at this scale," Cohen said., launched in September, currently has 11 employees, Jergens said. The company conducts bidding for natural gas now and plans to add additional services for electricity bidding later this year, he said. The P&G bid is the largest single request for proposals that has received so far, although Jergens said the online marketplace has a total of about 100 customers.

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