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November 3, 2017
NEM Western Energy Policy Summit and Upcoming Events

NEM convened its first Western Energy Policy Summit in Las Vegas, Nevada last week. The successful event featured a full agenda that examined all aspects of the burgeoning energy choice movement in the western states. Many thanks to the speakers and attendees for joining us. A special thanks as well to our generous sponsors – Argentum, Direct Energy, Infinite Energy, Stream, Ambit Energy, Clean Energy Project, Customized Energy Solutions, ESCO Advisors, Feller Law Group, Green-e, iSigma, Nodal Exchange, SFE Energy, and SourceLink as well as our media sponsors, Power Markets Today and, that made the Summit possible.

Upcoming NEM meetings include the Winter Executive Committee Meeting to be held on January 17-19, 2018, in Orlando, Florida and the 21st Annual National Energy Restructuring Conference to be held on April 30-May 2, 2018, in Washington, DC.

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Informal Public Workshop on Customer Choice

Following up on the retail choice en banc hearing held earlier this year, the Commission convened an informal public workshop this week in its California Customer Choice Project. President Picker began the workshop by listing the considerations that will go into examining market models and whether the models create an effective energy market - does the model support innovation, decarbonization, and consumer protection? does the model provide for affordability and reliability? is the model fair to all customers? does it honor past commitments? Commission Staff indicated the Commission will also be examining what it can do within existing law to improve the regulatory framework.

The Commission received market perspectives on New York, Illinois, the UK, and Texas as well as a California baseline case, intended to represent a spectrum of possible market frameworks. Chris Hendrix of Wal-Mart provided a customer perspective on U.S. electricity markets, explaining that competitive markets are integral to Wal-Mart's success and provide direct benefits to their stores and customers.

The Commission has issued a series of post-workshop questions for comment pertaining to its anticipated white paper and panelist remarks. Comments are due November 13, 2017. The questions for comment and panelist presentations are available at:

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Notice of Inquiry on Marketing Practices

The Commission opened a Notice of Inquiry on electric supplier marketing practices. The legislature passed a law on consumer protection provisions pertaining to electric supplier licensing and disclosures that necessitate revisions to the Commission regulations. The Commission is requesting comment on the following issues associated with implementing the new law:

"1. Given the Commission’s historical policy of providing residential and small commercial customers the same consumer protections under Chapter 305, the Commission anticipates applying the recently enacted consumer protections to both residential and small commercial customers, even though the legislation on its face refers only to residential consumers. 35-A M.R.S. §§ 3203(4-B), (4-C)
2. With regard to the new legislative requirement that CEPs provide prospective customers with information regarding the standard offer service, should CEPs be required to provide prospective customers with the actual standard offer prices, both current and, if available, for the next standard offer term? 35-A M.R.S. § 3203(4-B)(A).
3. The Commission preliminarily interprets the requirement that utility bills provide certain notices to be applicable regardless of whether customers are receiving one utility bill from the transmission and distribution (T&D) utility or a separate bill from the CEP. 35-A M.R.S. § 3203(4-C).
4. Pending adoption of amendments to Chapter 305 to conform to the recent legislative changes, should CEPs and T&D utilities be required to provide notice through utility bills of the website and telephone number of the Office of the Public Advocate, as set forth in the attached redline of Chapter 305, to comply with the requirements of 35-A M.R.S. § 3203(4-C)(A)?
5. With regard to the requirement that CEPs obtain express consent prior to renewing a Terms of Service at a fixed rate that is 20% or more above the rate of the expiring Terms of Service, the Commission preliminarily interprets the 20% to require a calculation of an average rate over the term of a Terms of Service that contained a variable rate. 35-A M.R.S. § 3203(4-B)(C)."

The Commission is also concerned about information it has received regarding door-to-door marketing practices and requests comments on the appropriate measures to respond spanning from a complete ban of door-to-door marketing to increased training, licensing and/or reporting requirements. Questions for comment on this issue include:

"1. Should additional regulatory requirements be put in place with regard to third – party marketing companies to ensure compliance with Chapter 305? For example, would express training requirements improve CEP compliance with residential consumer protection standards? If such regulatory requirements are put into place, should the Commission require formal verification of the training for each person that will be marketing for the CEP, whether employed by the CEP or by a third-party company?
2. Can or should the practice of selling electricity door-to-door be prohibited in Maine, either outright through rule or through the licensing process for CEPs? Does the Commission have the statutory authority to adopt such a prohibition?
3. Does the practice of third-party companies working on commission impact compliance with Chapter 305? If yes, can or should this practice be prohibited through the licensing process?
4. Should additional security be required as a prerequisite to CEPs engaging in door-to-door marketing practices?
5. Should CEPs who engage in door-to-door marketing practices be required to submit advance notice to the Commission as to the targeted geographical locations for door-to-door sales and/or submit quarterly reports detailing door-to-door activities? If yes, what specific information should be included in the reports?
6. Should third-party verification requirements be modified where customers have been contacted through door-to-door marketing? If so, how should it be modified?
7. Are there other types of marketing activities that the Commission should take note of that might require additional regulatory/reporting requirements?
8. To what extent could the Commission’s regulation of CEP marketing practices be informed by the statutory regulation of transient sales, 32 M.R.S. §§ 14701-14716, and consumer solicitation sales, 32 M.R.S. §§ 4661-4671. Explain whether similar provisions ought to be incorporated into the Commission’s regulation of CEPs.
9. Comments on other issues not identified above but relevant to customer protection standards are also requested."

Comments are due November 16, 2017. The full text of the NOI is available on the NEM Website.

New York
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Rebuttal Testimony Filed in Track I Proceeding

In response to NEM testimony on the inadequate utility delivery rate unbundling, Staff Rebuttal Testimony responded to this criticism "that Energy Service Company (ESCO) customers pay fees to cover some of the utilities’ commodity-supply costs, even though they are not purchasing supply from the utilities," by arguing that, "this is appropriate because of the system operator and provider of last resort function" of the utilities. Staff also conceded that electric delivery rates contain supply-related costs. Regarding certain utilities long term power purchase agreements Staff explained that, "for utilities that continue to have such contracts, the above or below market value of this power is flowed through delivery rates to all customers; the market value of the power is recovered through utilities’ supply charges. Several electric utilities continue to own generation facilities. The net plant associated with these facilities are part of the delivery rate base and their operation & maintenance costs are part of the utilities’ delivery expenses. The market value of electricity generated from these facilities are flowed through to delivery rates." The full text of Staff's Rebuttal Testimony is available on the NEM Website.

UIU/AG Testimony agreed with Staff's proposed prohibition on ESCO service to mass market customers. UIU/AG suggested that a formal waiver process be established in the UBP for ESCOs seeking a waiver on the service prohibition to offer a guaranteed savings product. Such waiver process should include: "(1) a requirement that ESCOs file their waiver petitions and discovery requests/responses on DPS’s Document and Matter Management System; (2) the opportunity for public comments; (3) a Commission review and approval process before any ESCO is deemed eligible for the waiver; and (4) a condition that any waivers granted should be reviewed on an annual basis to ensure the ESCO has complied with all terms of the UBP." The full text of UIU/AG's Rebuttal Testimony is available on the NEM Website.

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NEM Comments on Capacity Release ANOPR

The Commission issued an ANOPR on its capacity release regulations stemming from its 2014 retail natural gas market investigation. In the ANOPR the Commission proposes: 1) that all customers, regardless of shopping status, be charged the average system cost of capacity as a nonbypassable charge, rather than having NGSs pay for released capacity assets; 2) that NGSs be provided withvirtual access to capacity assets that the utility cannot release due to reliability or other constraints; 3) to allow daily imbalance trading between market participants at the utility level and between choice and transportation programs; and 4) to standardize the penalty mechanism during off-peak periods, to be based on local gas costs and incorporating a multiplier.

NEM filed comments noting its appreciation for the Commission's continued efforts to facilitate retail gas market competition. NEM reiterated its longstanding position on capacity release that assets should follow the customer, i.e., as individual customers leave a utility’s system supply for that of a competitive supplier, the customer should be assigned capacity, and it should be accomplished under the same terms and conditions as that customer would have received as a utility sales customer. NEM noted that it was unclear whether the proposed uniform capacity charge mechanism will include a change in the underlying capacity release program and whether NGSs will receive an allocation more closely approximating a true “slice of the pie” than they currently receive. While the intended purpose of the proposal to provide competitive suppliers with virtual access to reliability assets is meritorious, NEM suggested that increased detail and transparency is needed associated with what is or will be deemed a “reliability asset” by the utility. NEM supported the daily imbalance trading proposal as a source of flexibility for suppliers that affords them with a means to minimize the costs to deliver natural gas to consumers. NEM supported the proposal for market-based, off-peak penalties with a reasonable multiplier. The full text of NEM's Comments is available on the NEM Website.

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