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October 8, 2010
NEM Upcoming Events

Please mark your calendar for NEM's Fall Leadership Roundtable on October 18-20, 2010, in Harrisburg, PA. The conference will take place at the Hilton Harrisburg on One North Second Street. You may register for the Fall Meeting in Harrisburg at this hotlink.

Our Annual Winter Executive Committee Meeting is scheduled for January 17-19, 2011, in Miami at the famous Doral Hotel and Resort. Many Thanks to Doug Marcille, Vice Chair of NEM’s Executive Committee and CEO of US Gas and Electric for hosting this upcoming Executive Committee Meeting.

FTC Issues Proposed Revisions to Green Guides

FTC issued proposed revisions to its Guides for the Use of Environmental Marketing Claims (Green Guides) for comment.

The proposed revisions would provide that:

"• Marketers should not make unqualified general environmental benefit claims. They are difficult, if not impossible, to substantiate. (The current Guides state that marketers can make unqualified claims if they can substantiate all express and implied claims. Otherwise, they should qualify the claim.)
• Qualifications should be clear and prominent, and should limit the claim to a specific benefit. Marketers should ensure the advertisement’s context does not imply deceptive environmental claims. (In the current Guides, this guidance appears only in examples.)

. . .

• Marketers should not make unqualified renewable energy claims if the power used to manufacture any part of the product was derived from fossil fuels.
• Marketers should qualify claims by specifying the source of renewable energy (e.g., wind or solar). Additionally, marketers should qualify claims if less than all, or virtually all, of the significant manufacturing processes involved in making the product/package were powered with renewable energy or conventional energy offset by renewable energy certificates (“RECs”).
• Marketers that generate renewable energy (e.g., by using solar panels), but sell RECs for all of the renewable energy they generate, should not represent that they use renewable energy.
Carbon Offsets
• Marketers should have competent and reliable scientific evidence to support their carbon offset claims, including using appropriate accounting methods to ensure they are properly quantifying emission reductions and are not selling those reductions more than once.
• Marketers should disclose if the offset purchase funds emission reductions that will not occur for two years or longer.
• Marketers should not advertise a carbon offset if the activity that forms the basis of the offset is already required by law."

FTC also requested comment on specific questions related to the Green Guide revisions:

"How, and under what circumstances, should marketers qualify “made with renewable energy” claims to avoid deception?
a. Does disclosing the source of the renewable energy adequately qualify the claim and prevent deceptive implications that the advertised product is made with renewable or recycled materials? Why or why not? Are there other disclosures that would adequately qualify a “made with renewable energy” claim? Please describe such disclosures. Please also provide any relevant consumer perception evidence.
b. Should the Commission advise marketers to qualify a “made with renewable energy” claim if the advertised product is not made entirely with renewable energy? If so, should marketers qualify such claims if all or virtually all significant processes used in making a product are powered by renewable energy? Why or why not? Please provide any relevant consumer perception evidence.
17. How do consumers understand “carbon offset” and “carbon neutral” claims? Is there any evidence of consumer confusion concerning the use of these claims? Please provide any relevant consumer perception evidence.
18. How should marketers qualify carbon offset claims, if at all, to avoid deception about the timing of emission reductions? Should marketers disclose if their offsets reflect emission reductions that are not scheduled to occur in two years? Should marketers make a disclosure if emission reductions are not scheduled to occur in some other time period? If so, what time period, and why? Would such a disclosure adequately qualify an offset claim to avoid deception? Please provide any relevant consumer perception evidence about this issue or on carbon offsets, generally."

Comments are due December 10, 2010. The full texts of the Proposed Green Guide Revisions and Summary of Proposed Revisions are available on the NEM Website.

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Proposed Order Issued in ComEd POR Case

In ComEd's POR case, the utility and certain other intervenors supported a fixed $0.50 per bill POR charge. Alternatively, Staff recommended the use of a percentage discount rate approach, arguing that a fixed charge would discourage suppliers from serving lower use customers in contravention of the intent of the law to increase retail competition.

The ALJ in the Proposed Order concluded that, "If retail electric suppliers passed on ComEd’s proffered $0.50 per-bill charge to their customers in the manner in which ComEd bills them, effectively, lower-end (in usage) PORCB customers would subsidize the higher-end users. No party has proffered anything to indicate that this was the intent of the General Assembly. In fact, the statement of legislative intent indicates the opposite, which is, that all Illinoisans should benefit from the services of retail electric suppliers. All Illinoisans, necessarily, includes those persons or entities that do not use much electricity. Therefore, we conclude that ComEd’s proffered $0.50 cent, per-bill, fixed charge is not in accord with the General Assembly’s articulated purpose, which is stated in 220 ILCS 5/16-118(a), and is stated above.

Thus, to aid in the sustained profitability of retail electric suppliers in ComEd’s territory, which could help to ensure that competition endures and thrives in Illinois, we decrease the discount rate in the manner that was proffered by Commission Staff as an alternative to Staff’s original proposal. We conclude that Staff’s alternative recovery charge of 0.44%, as opposed to 0.68%, should be imposed here. Also, it is in the best interests of Illinoisans in ComEd’s service territory if there were one single charge for uncollectibles, as opposed to one uncollectible charge for residential customers and a different uncollectible charge for commercial customers. ComEd shall amend its tariffs to reflect this charge, which is 1.727% (2.239% + 1.215% divided by two)."

Briefs on Exception are due October 22, 2010. The full text of the Proposed Order is available on the NEM Website.

New Jersey
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Order on BGS Retail Margin

The Board decided to eliminate the retail margin that had been applicable to BGS-CIEP customers. The stated rationale for eliminating the retail margin was that it, "has served its intended purpose. Currently, approximately 70% of Commercial and Industrial Electricity Pricing (“CIEP”) customers, which represent approximately 85% of the CIEP load, have switched to TPSs. In addition, according to monthly switching statistics provided to the Board by the utilities, more than 70% of the customers with peak loads between 750 and 999 kW – who are subject to the Retail Margin but not subject to CIEP’s hourly pricing – are buying their electricity from TPSs. Furthermore, the TPS market base in New Jersey is mature. The market is serving more than 5,600 MW of load in the state, an aggregate larger than the load served by many U.S. utilities. Moreover, large customers in New Jersey have 35 competitive TPSs to choose from." The Board also decided to lower the CIEP threshold from 1000 kw to 750 kw. Both of these changes will become effective June 1, 2011.

Stakeholder Meeting on Energy Competition Rules

The Board previously asked for comments in association with its readoption of the energy competition rules. Staff now plans to convene a stakeholder meeting on October 28, 2010, to receive informal input on the rules and comments previously filed, including those of NEM. Amongst the issues for consideration are consumer protection, energy aggregation programs, licensing and registration and anti-slamming provisions. Additional comments can be filed in advance of the meeting by October 15, 2010, to The full texts of the Notice of Stakeholder Meeting and NEM's Comments are available on the NEM Website.

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