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December 13, 2013
NEM Winter Executive Committee Meeting

Please mark your calendar and plan to join us for our Winter Executive Committee Meeting on January 27-29, 2014. The meeting will be held at SCRA headquarters located at 5300 International Blvd., Charleston, South Carolina. Many thanks to Bill Mahoney and SCRA for once again hosting this important meeting. Please REGISTER at your earliest convenience so that we can plan for an appropriate amount of meeting materials. NEM has a block of rooms available at the Hilton Garden Inn for meeting attendees.

NEM Annual National Energy Restructuring Conference

Please mark your calendars and plan to attend NEM’s Annual National Energy Restructuring Conference to be held April 29th-May 1st, 2014. This Conference is NEM’s premier event in which we host top energy industry regulators and legislators to share their views on the cutting edge issues in competitive energy markets. Registration is available at this hotlink. Accommodations are available at the Embassy Suites Washington, DC - Convention Center at this hotlink.

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Pepco Files Proposed Dynamic Pricing Plan

The Commission is seeking comments on a proposal filed by Pepco to implement a residential dynamic pricing plan. Under the proposal, "all District of Columbia residential distribution customers will be automatically enrolled in dynamic pricing regardless of whether they purchase their energy supply through Pepco's Standard Offer Service (SOS) rate or through a competitive supplier." "Customers who participate in a supplier's or a curtailment service provider's demand response program that is bid into the PJM demand response market will not be able to participate in Pepco's CPR program to prevent duplicate bidding of the resource into the PJM market." The plan is enabled by Pepco's AMI system. Customers will receive a critical peak rebate for energy reductions that will be reflected as a credit to their distribution rate. The credit will be calculated as $1.25 per kWh multiplied by the difference between actual kWh consumption and a Customer Base Line level of consumption during the peak savings event. "All energy use, including the kWh actually consumed during Peak Savings periods, will be priced at the normally applicable distribution and generation rates." The proposed dynamic pricing plan will be supported by a multimillion dollar customer education campaign. The full texts of the Commission's Request for Comments and Pepco's Dynamic Pricing Plan Proposal (Part 1) are available on the NEM Website.

New York
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Tax Commissions and Legislative Leaders Looking at Energy Tax Changes

Governor Cuomo established two commissions to look at tax reform in New York. Tax reform legislation is likely to be a big issue in the 2014 election year. The first, the New York State Tax Reform and Fairness Commission issued a report in mid-November recommending an end to the sales tax exemption on delivery for ESCO customers as well as a study of the taxation of all “utilities,” which appears to include ESCOs. It also recommended accelerated phase-out of the 18a assessment. The second, the New York State Tax Relief Commission, released its report this week. It recommended an accelerated phase-out of the 18a assessment, starting with large industrial consumers.

In addition to this, NY Senate Republican Leader Skelos recently released a report on tax reform. On the energy side, the Skelos report recommends accelerated elimination of the 18a assessment. The report noted that it had been asked to consider ending the sales tax exemption but it does not appear to be endorsing such a change.

Assembly Minority Leader Kolb sent a letter to the Tax Relief Commission recommending tax changes. With respect to energy, his recommendations were limited to the early phase out of the 18a assessment.

The full texts of the Reports are available on the NEM Website.

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NEM Comments on Retail Gas Market Investigation

The Commission opened an investigation, “to assess whether effective competition exists and make recommendations for improvements to ensure that a properly functioning and workable competitive retail natural gas market operates in the state.” In its comments, NEM noted that the Commission's investigation proactively identified the Marcellus Shale resource as a potential impetus for restructuring the current utility-rendered Supplier of Last Resort (SOLR) service model. NEM urged the Commission to capitalize on this opportunity to enhance retail gas market competition. By transitioning the utilities out of the commodity merchant function and allowing the utilities to focus their resources on the core utility monopoly competency of upgrading and maintaining delivery infrastructure, the Commission will accomplish the related goals of enhancing retail market competition and facilitating access to Marcellus gas. In the interim while the utilities still perform the SOLR role, in order to enhance competition in the retail gas market, consumers should be permitted to see and respond to improved market-based pricing signals, and the full retail costs of providing SOLR service should be unbundled from delivery rates and included in the price to compare. NEM noted the general lack of mass market gas customer shopping. NEM supported the extentsion of a number of electric market measures to enhance gas shopping including, seamless moves, accelerated switching timeframes, standard offer programs, low income consumer shopping, expanded consumer education, and a joint branded utility-supplier bill. The full text of NEM's Comments is available on the NEM Website.

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