MichCon filed an application requesting ex parte approval of the sale of excess system gas supply and related accounting changes resulting from enhancements made to its gas storage system. As a result of storage facility enhancements, MichCon states it will be able to access previously unavailable Native Base Gas for which it “proposes to make, in total, a 17 Bcf decrement to its system-wide gas storage accounts.” As part of the proposal, MichCon proposes to sell 4 Bcf of Native Base Gas to “non-GCR customers at market prices” and “keep the entire financial benefit of these sales,” which it projects as $41.2 million dollars. Furthermore, MichCon states it would pass on the financial benefit of the remaining 13 Bcf decrement to its GCR customers, which it projected could provide gas cost savings to said customers of approximately $28 million dollars. MichCon also notes an $11.8 million annual revenue requirement reduction for implementation in its next rate case. MichCon states that the increased storage space could also provide the opportunity to sell gas storage service to third parties.

NEM intervened in the case noting its concern about the fairness and competitive neutrality associated with MichCon’s proposal to limit the benefit of the 13 Bcf decrement to only its GCR customers when there is a likelihood that all customers contributed to the base gas in their rates. Furthermore, by limiting benefits to gas cost reductions to be realized only by sales customers, MichCon will be distorting pricing signals in a manner that interferes with the functioning of the competitive market. An artificially-depressed GCR rate will not provide MichCon consumers with accurate market-based information from which they can draw comparisons to competitive offerings. Finally, given the nature of the MichCon Choice system, additional available working storage should mean that alternative suppliers can deliver even greater quantities throughout the injection season, since there will be significantly greater deliverability in the heating season based upon the increased working storage available. Under the current structure, this may be difficult to quantify given the flat nature of storage deliveries. As such, all customers, including Choice customers, should be compensated in some manner for the additional storage that will be made available to MichCon. The full texts of MichCon's Application and NEM's Intervention are available on the NEM Website.

Staff will convene a technical workshop on supply procurement practices of electric utilities in New York and other states. The Workshop will be held October 20, 2006, at 10AM in the 19th floor board room of the Commission's Albany offices. The workshop will consist of Staff discussion of the background and purpose of the meeting, followed by a panel on supply procurement practices in neighboring states. Another panel, with representatives from ConEd/O&R, National Grid, Central Hudson and Energy East will talk about New York utility supply procurement practices, including the cost elements that comprise utility customer commodity charges and elements of the supply portfolio that can be made public. The meeting will conclude with a discussion of next steps. The full text of the Meeting Notice and Agenda are available on the NEM Website.

A request has made for an extension of the due dates for initial and reply comments to November 17, 2006, and December 11, 2006, respectively.

As a result of the Ohio Supreme Court decision and subsequent Commission Order, AEP was directed to file a plan to provide customers the ability to purchase electric service at a price determined through a competitive bid process (CBP). AEP filed a CBP plan providing for a "standard power service" option and a green power option. AEP would send customers a mailing in which they would indicate their willingness to opt-in to the standard power service option or green power option from a range of pricing levels, including below, at or above AEP's Rate Stabilization Plan rates. Subsequent to the competitive bid, customers would be offered another 21 day window in which they could opt-in to one of the final offerings. The RFP would seek wholesale bids for all the two supply options and the differing price levels. For each option, the total load for a price level will include the load for all higher price levels. Customers participating in the plan will be billed all of AEP's same standard service rates and riders applicable to non-participants. Participating customers base generation billings will be adjusted up or down in conformance with the option and price level under which they receive service. Administrative costs of the program will be collected from all customers through a non-bypassable charge. Metering requirements applicable to switching customers (customers with maximum monthly billing demands of 200 kw or greater for the most recent twelve months must have interval meters) will also apply to customers participating in the CBP program.

A technical conference will be convened on October 16, 2006, at 1PM in Hearing Room E of the Commission's offices for potential suppliers to ask questions and raise issues about AEP's proposal. Those wishing to participate by phone may call 614-644-1099.

The full text of AEP's Competitive Bid Process Plan is available on the NEM Website.