The Commission issued proposed consumer protection regulations applicable to residential and small commercial customers. The proposed regulations would require utilities to provide suppliers with customer lists including account name, billing address, service address, utility account number, utility rate class and utility Standard Offer Service type. Utilities would be permitted to charge supplier's a fee for the list. Customers would participate on an opt-out basis.

The proposed regulations also provide that utilities offering consolidated billing must either purchase receivables or prorate customer payments between the utility and supplier. If the utility elects the POR approach then "supplier receivables shall be purchased with full and timely cost recovery for the utility under terms and conditions approved by the Commission." If the utility elects pro-ration then "a payment shall be allocated between the utility, supplier, and any other party in proportion to the percentage of the combined charges on the customer's total bill." Also notable, if the utility purchases receivables, the supplier receivables are to be treated as utility charges for service termination purposes.

The proposed rules also discuss authorized methods of customer enrollment, required customer contract provisions and disclosures and supplier-utility electronic transaction processes. Comments are due October 30, 2006. The full text of the Proposed Regulations is available on the NEM Website.

Staff submitted testimony in the Commission's inquiry on an optimal electric market structure. Notable Staff conclusions include: 1) residential and small commercial SOS rates should be designed as time of use rates to promote energy efficiency and conservation; 2) the Commission's oversight of the SOS process should not interfere with prevailing market rates through rejection of valid competitive bids or bid tranches based on price; 3) legislative requirements of low prices and low volatility should be satisfied through a stakeholder-developed plan to transition from the current full requirements procurement method of utility-provided SOS to a robust competitive market for all customer classes. This would be an "electricity road map" for retirement of the SOS obligation of the utilities for each customer class; 4) regulation that administratively controls the price of electricity should be avoided; and 5) small commercial customers have not benefited from SOS under current market conditions. A significant Staff observation is that, "I do not accept that customers would be better off if they could buy SOS at below market rates because that could encourage over consumption (driving up overall demand costs) and prevent customers from making informed choices regarding energy efficiency and conservation measures. The divergence of SOS rates and the market also creates an acute problem if the correction occurs suddenly, as happened with BGE's, Pepco's and DPL's rates this past year." The full text of Staff's Testimony is available on the NEM Website.

Keyspan submitted a proposed rate filing. It requested that its rate case be consolidated with the pending National Grid merger proceeding. As part of its filing, Keyspan proposes to implement revised merchant function and billing credits. Keyspan NY's current merchant function backout credit is $.21/dth, and its current billing and payment processing credit is $.78 per account per month. Keyspan NY's filing proposed an unbundled supply rate of $.53/dth, which is comprised of $.113/dth attributable to gas procurement costs, credit and collection costs and promotional advertising expense, as well as $.415/dth attributable to the Rate Year projection of gas cost-related uncollectible expense and the return requirement on working capital related to purchased gas. Keyspan NY's proposed unbundled billing and payment processing rate is $.76 per account per month.

Keyspan LI's current merchant function backout credit is $.19/dth, and its current billing and payment processing credit is $.78 per account per month. Keyspan NY's filing proposed an unbundled supply rate of $.22/dth, which is comprised of $.049/dth attributable to gas procurement costs, credit and collection costs and promotional advertising expense, as well as $.169/dth attributable to the Rate Year projection of gas cost-related uncollectible expense and the return requirement on working capital related to purchased gas. Keyspan NY's proposed unbundled billing and payment processing rate is $.65 per account per month.

Keyspan NY proposed to purchase receivables without recourse. The program would be limited to firm, core transportation customers, using utility consolidated billing. The applicable discount rate would 2.02% for receivables less than 90 days old and 4.9% for receivables greater than 90 days old. Keyspan NY would implement the POR program within 90 days of the Rate Effective Date and would implement an ESCO Referral Program within 9 months of full implementation of the POR program. Because of constraints on its existing billing system and pending integration with National Grid, Keyspan LI is not presently proposing to utilize purchase of receivables or an ESCO Referral Program.

Keyspan NY and Keyspan LI both propose: 1) a daily penalty cash out provision for daily volumes delivered that differ from daily volume set by the utility; 2) designation of an ESCO ombudsman; 3) use of a Market Expo; and 4) use of customer education and outreach for retail choice. The full text of the Keyspan Rate Filing is available from NEM headquarters.

In accordance with its recent rate Order, Central Hudson filed an unbundled bill format proposal. The new format would be implemented no sooner than July 1, 2007. The change in format is part of the transition from back-out credits to Merchant Function Charges (MFCs). Central Hudson proposes to include a new "Supply Related Charges" section on the bill. This section would include the MFC and the MFC Adjustment. Additionally, this section on electric bills would include the Miscellaneous Charge and Purchased Power Adjustment. This new section on gas bills would include the Transportation Demand Adjustment Charge. Other bill sections would include Electric Delivery Charges, Electric Supply Charges, NYS and Local Taxes and Surcharges and Sales Tax. The full text of Central Hudson's Proposal is available on the NEM Website.

FirstEnergy submitted its competitive bid process (CBP) proposal. The CBP would be an RFP process soliciting retail prices and quantity of supply separately for Ohio Edison, Toledo Edison and Cleveland Electric. "The lowest price submitted by a competitive supplier will become the price that will form the basis for the price offered to customers. . . Other competitive suppliers that bid higher than the lowest price will then have the opportunity to match the lowest price up to the quantity they bid." The supplier is responsible for applicable transmission/MISO charges. Once the RFP process is finished, FirstEnergy customers will receive notice of the opportunity to receive service under the program. Shopping credits will be those established in the RSP and subsequent RCP proceedings. The full text of FirstEnergy's CBP Proposal is available on the NEM Website.

The Commission directed AEP to convene a technical conference to explain its proposed competitive bid proposal. The conference will be held October 16, 2006, at 1PM at the Commission's Hearing Room E on the 11th floor.