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November 21, 2008
Upcoming NEM Meeting Dates

NEM's Winter Executive Committee Meeting will be held at Infinite Energy/Intelligent Energy headquarters at 7001 SW 24th Avenue in Gainesville, Florida. The meeting will take place January 20-21, 2009. Please register at this hotlink. A block of rooms has been reserved at the Hilton University of Florida Conference Center at 1714 SW 34th Street, Gainesville, Florida at a rate of $139 per night. Contact 352-371-3600 for reservations.

NEM's 12th Annual Global Energy Forum & Membership Meeting will be held April 28 & 29, 2009. The meeting will be held at the Embassy Suites Washington D.C. - Convention Center located at 900 10th Street, NW, Washington, DC. Please register at this hotlink. A block of rooms has been reserved for NEM members at the rate of $279 per night. Contact 202-719-1421 for reservations.

Order 712-A on Capacity Release Rules

FERC issued Order 712-A, resolving rehearing petitions on its capacity release rules. The Commission affirmed its prior decision to remove the rate ceiling on short-term capacity release transactions. FERC also clarified that: 1) Asset Management Agreements (AMAs) and retail unbundling releases are exempt from the prohibition on extension and rollovers for short-term releases; 2) the delivery purchase obligation under an AMA is five months for annual periods and five to twelve months for non-annual periods; and 3) open access LNG terminals can tie their connecting downstream pipeline with terminal capacity. The full text of Order 712-A will be posted on the NEM Website when made available electronically.

Pipeline Posting Requirements

FERC issued Order 720 on pipeline posting requirements. The rule requires major non-interestate pipelines (natural gas pipelines that deliver more than 50 million MMBtu per year) to post scheduled flow information and to post information for each receipt and delivery point with a design capacity greater than 15,000 MMBtu per day. Additionally, FERC required that interstate pipelines post information regarding no-notice service. The Commission declined to require the non-interstate and interstate pipelines to post actual flow information at this time.

The Commission also opened a Notice of Inquiry into posting requirements for section 311 intrastate pipelines and Hinshaw pipelines. Specifically, the Commission wants to examine whether these entities should be subject to comparable reporting requirements as the interstate pipelines because of a potential adverse competitive effect on interstate pipelines.

The full texts of Order 720 and the Notice of Inquiry are available on the NEM Website.

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Order on Interim Measures to Address Potential Capacity Shortfalls

Earlier this year the Commission initiated a proceeding to examine potential electricity shortfalls beginning in 2011, particularly if certain transmission line projects are not completed in the region in that timeframe. The Commission is investigating procedures by which the electric utilities might issue "Gap RFPs" to address the shortfall. As an interim step addressing the issue, the Commission decided to, "begin filling the gap by identifying and capturing any potentially available demand response and distributed generation resources before we order other steps." Accordingly, the electric utilities must issue RFPs for resources meeting the requirements of PJM's Emergency Load Response Program for the power planning years 2011-2016, to function as insurance against the delay in in-service dates for the TrAIL and PATH transmission projects. Additionally, Staff will form a working group for determining, "the scope of potentially available distributed generation resources and proposing a methodology to harness those resources that currently are not participating in PJM's Emergency Load Response Program and that do not respond to the RFP to be issued by each IOU." The full text of the Order is available on the NEM Website.

New York
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Comments Sought on Keyspan POR and Transportation and Balancing Proposals

The Commission is requesting comments on two Keyspan proposals. Keyspan filed a proposed agreement this fall entitled, "Billing Services, Purchase of Accounts Receivables and Assignment Agreement," developed through a stakeholder collaborative. Two issues associated with the agreement remain outstanding for which the Commission is requesting comment: first, the appropriate treatment of unbilled ESCO gas charges resulting from the flow of gas through the meter; and second, what is the appropriate calculation of the discount rate. Comments are due December 3, 2008, and requests to be added to the service list are due November 26, 2008. The full texts of the Proposed Agreement and Request for Comments are available from NEM headquarters.

As a result of a separate collaborative process, Keyspan also filed a report on transportation and balancing procedures. Keyspan proposed two balancing programs for transportation customers - Monthly Balancing and Daily Balancing. Monthly balancing would be mandatory for all firm core transportation customers and said customers would also receive a mandatory assignment of pipeline capacity. IT transportation customers and TC transportation customers may elect either Monthly or Daily Balancing. Keyspan's new Daily Balancing program will give marketers meter readings during the current gas day to permit intra-day adjustments. Participants in Daily Balancing must purchase and use Automatic Remote Meter equipment. The Commission requests comment on the recommendations in the report. Comments are due December 12, 2008, and requests to be added to the service list are due November 26, 2008. The full texts of the Transportation and Balancing Report and Request for Comments are available on the NEM Website.

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Stakeholder Comments on Gas POR Programs

The Commission opened a rulemaking to examine providing utilities with the ability to terminate customers for the non-payment of receivables as part of a Purchase of Receivables (POR) program. NEM and many members submitted comments and reply comments in support. The specific issue of utility termination of customers for nonpayment of receivables in POR programs arose in the most recent Columbia Gas rate case. The Commission recently rendered a decision in this case finding that, “POR programs that treat utility-supply and NGS-supply customers equally regarding termination rights remove barriers to the development of competition.” However, the Commission determined that, “past precedent” consisting of a 1999 Order on Customer Service Guidelines prevented it from approving Columbia’s termination of customers for nonpayment of receivables in a POR program at this time. This proceeding was initiated to receive comment on the impact of this outstanding 1999 Order.

The majority of stakeholders submitting initial comments to the Commission, including marketers and utilities, supported the concept of utility termination for customer non-payment in the context of POR programs. The Office of Consumer Advocate (OCA) opposed it based on two concepts: 1) that marketer rates have not been determined to be just and reasonable; and 2) that termination in this context would effect a diminution of consumer rights. In response, we argued that by adopting the measures included in the gas SEARCH report, amongst them POR, the Commission is enhancing the competitiveness of the market, and thereby ensuring that marketer rates are just and reasonable. We also noted that customers in POR programs would enjoy the same consumer protections as utility full service customers.

Additionally, the utilities requested that the Commission allow for a delay in the submission of POR program plans. We urged the Commission to reject the utilities request for delay, suggesting that the utilities submit their POR plans subject to and contingent on the Commission’s resolution of the instant case to enable them to meet the December POR program filing deadline.

The full text of Stakeholder Comments can be viewed at this hotlink.

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