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November 20, 2009
Winter Executive Committee Meeting

January 2010 Executive Committee Meeting - NEM’s Annual Winter Executive Committee Policy and Planning Meeting will be held January 19 & 20, 2010, at the headquarters of South Carolina Research Authority in Charleston, South Carolina. NEM’s room rate has been secured at $129.00 per room per night at the Hilton Garden Inn Charleston Airport, 5265 International Blvd., N. Charleston, SC 29418. The Executive Committee sets the course for NEM’s advocacy in the coming year at this meeting. A Draft Agenda is hotlinked here. Many thanks to Bill Mahoney and South Carolina Research Authority for the generous offer to host this meeting. Please use this hotlink to register.

Technical Conference on Demand Response National Action Plan

FERC Staff convened a technical conference this week to review its draft Demand Response National Action Plan. The conference was convened to focus on whether the strategies set forth in the draft Plan are appropriate and effective; whether potential activities in the draft plan should be excluded or were omitted; whether the strategy of using a coalition to carry out the Plan objectives is consistent with the Energy Independence and Security Act; and how a coalition can best facilitate the implementation of the Plan. Participants included state regulators, utilities, retail energy marketers, large consumers, cooperatives, and demand response technologists. The participants were largely supportive of the substance of the draft Plan, with suggestions that the Plan make specific provision for the participation of retail energy marketers and large consumers in demand response offerings. Participants differed on the extent to which a demand response communications program could and should be national, regional or local in scope, and how within those parameters, it should be managed. Additionally, the need to translate the concept of "demand response" into a consumer friendly term was discussed. FERC's possible role in monitoring and oversight of a coalition was explored as well as potential funding sources (government, private sources, ratepayers) to effectuate the Plan.

NYISO Order 719 Compliance Filing

The Commission issued an Order finding that NYISO's compliance filing, with certain modifications, is consistent with Order 719 requirements regarding: 1)demand response and pricing during periods of operating reserve shortage, 2) long-term power contracting, and 3) market-monitoring policies. On the issue of ISO/RTO responsiveness to stakeholders, the Commission made no finding on the NYISO compliance filing. The Commission explained it will be convening a technical conference to discuss that issue and will then issue a separate Order. The full text of the Order is available on the NEM Website.

New Jersey
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Board Requests Comments on Phase Out of BGS Retail Margin

Last week, the Board requested comments on the electric utilities' proposal to phase-out the retail margin currently applicable to BGE-FP and BGS-CIEP customers with peak usage of over 750kw. The issue is expected to considered at the Board's December 1, 2009, Agenda meeting.

NEM submitted comments opposing the reduction, phase-out or elimination of the Retail Margin. NEM noted that in the utilities’ Joint Filing of June 30, 2009, they suggested that the Retail Margin could be eliminated because, in their view, its “incubating purpose” had been satisfied because a significant percentage of BGS-CIEP load has migrated to competitive suppliers. NEM disagreed with the utilities assessment of the purpose and effect of the Retail Margin. The Retail Margin was intended to be a proxy for marketing and administrative expenses incurred by competitive marketers to serve migrating customers. These, by their very nature, are on-going costs and should continue to be included in Basic Generation Service (BGS) pricing. In the neighboring jurisdiction of New York, a Merchant Function Charge works similarly to provide consumers with a basis to compare utility default service and competitive market offerings. Moreover, NEM also disagreed with the utilities that the market has reached a point of maturation that would justify the discontinuation of the Retail Margin. The full text of NEM's Comments is available on the NEM Website.

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Order on PPL POR Program

The Commission approved a settlement pertaining to a POR program and Merchant Function Charge for PPL. The settlement is limited to 2010. The POR discount rate for residential customers under the program will be 1.37% comprised of an uncollectible accounts expense factor of 1.32% and a POR administrative factor of .05%. Participating suppliers must use consolidated billing. Suppliers participating in the residential POR Program will agree not to reject for enrollment a new residential customer covered by the residential POR Program based on credit-related issues and agree not to require a deposit for providing service.

The discount rate for small C&I customers under the POR program will be 0.17% comprised of an uncollectible accounts expense factor of 0.12% and a POR administrative factor of 0.05%. A supplier choosing PPL’s consolidated billing option for all or part of its small C&I accounts will be required to sell its accounts receivables to PPL Electric for those small C&I customers for whom PPL issues a consolidated bill. An EGS may continue to issue its own bills for all or a part of its small C&I customers, but it will not be eligible to participate in the POR Program for those small C&I customers that receive dual billing.

PPL will unbundle its generation related uncollectible accounts expense from distribution rates to be collected through an MFC charge effective January 1, 2010. The MFC charge for residential customers will be 1.32%, and the MFC charge for small C&I customers will be 0.12%.

The Commission also determined that, “PPL may commence service termination actions with respect to any shopping customer whose account has been purchased by PPL, if PPL is not paid by the shopping customer, in the same manner as is permissible under current Commission regulations.”

The full text of the Order is available from NEM headquarters.

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