Public Service Co. of Colorado (PSCC) and IBM have announced a strategic alliance. IBM's subsidiary, Integrated Systems Solutions Corp. (ISSC), and a new PSCC subsidiary, e prime, will develop and deliver new information technology applications to improve utility customer service. E prime's first project will be to help IBM develop a natural gas procurement strategy to reduce energy costs and improve the quality and reliability of its energy services. ISSC will manage most of PSCC's information technology systems and network infrastructure. That agreement should be worth about $500 million to ISSC over the next 10 years; PSCC could save $190 million over the same period. ISSC plans to hire 400 PSCC employees to help implement the agreement.
Moody's Investor Service sees no immediate credit implications, but feels the alliance's strategic potential could be significant in the long term. PSCC has secured a share of the undeveloped market for value-added services in the electric sector, while positioning itself for a more competitive future. Moody's believes the ability to unbundle and innovatively rebundle electric product and service offerings will not only provide revenue protection, but a means of leveraging into new core service markets. (em LB
Articles found on this page are available to Internet subscribers only. For more information about obtaining a username and password, please call our Customer Service Department at 1-800-368-5001.