A power exchange is a sales forum or marketplace used by energy producers that works for participants in much the same way as a stock exchange works for participants in the financial industry, and is usually owned and operated by the parties who use it. A POOLCO is a privatized power exchange, an independent organization that operates auctions, hosts spot market sales, serves as a trading center for futures and other derivatives, and generally functions as a privately-owned marketplace for energy sales in the wholesale marketplace.

A POOLCO may have an actual trading floor or centrally-located headquarters, or it may function solely as a computer network, similarly to the way the NASDAQ exchange functions. It is subject to federal regulations which enforce open access and permit cost recovery, and may also be subject to state regulations in US states where a POOLCO's customers are primarily within a single state.

In addition to managing an energy market, a POOLCO might also handle the sale and supply of ancillary services such as load following, back-up supply, reactive power, and possibly demand-side management services. As an independent body it can also act as a forum for arbitrating disputes between buyers and sellers.

POOLCOs are only beginning to emerge as a separate sector of the energy industry. Power exchanges still handle most of the duties that POOLCOs are expected to perform in the future. Under deregulation, it is hoped that POOLCOs will eventually act as centralized supply pools for all commercial energy sales and work with independent system operators or TRANSCOs to insure that sales made through POOLCOs can be delivered within existing transmission capacity

POOLCO may also be spelled Poolco, PoolCo, or poolco.

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