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December 16, 2011
Upcoming NEM Meetings

January 2012 Executive Committee Meeting - NEM’s Annual Winter Executive Committee Meeting will be held at the headquarters of SCRA in Charleston, South Carolina on January 24-25, 2012. The Winter Executive Committee Meeting is where Executive Committee members set NEM's course for the coming year. Many thanks to Bill Mahoney and SCRA for hosting the Winter Executive Committee meeting.

You may register for the meeting at this hotlink. NEM has a room block at the Hilton Garden Inn Charleston Airport, 5265 International Blvd in North Charleston, SC. You may register for the hotel at this hotlink or call the reservation number 843-308-9330 or 1-800-HILTONS and reference group code NLL.

Order on Rehearing on Demand Response Compensation

FERC's Order 745 required each RTO/ISO with a tariff provision permitting demand response resources to participate as a resource in the energy market to pay to those demand response resources the market price when the demand response resource has the capability to balance supply and demand and when payment is cost-effective under a net benefits test. On rehearing FERC, "continues to find that the barriers to demand participation in the wholesale market, such as the lack of a direct connection between wholesale and retail prices, lack of dynamic retail prices (retail prices that vary with changes in marginal wholesale costs), lack of real-time information sharing, and the relative lack of sufficient retail metering technology, demonstrate that customers do not have the ability to respond to the often volatile price changes in the wholesale market and demonstrate the need for including demand response as part of wholesale market design. If the price responsiveness of demand is not fully reflected in the wholesale market, the price, a fortiori, will be higher than it would be in a competitive market. To establish just and reasonable prices under such circumstances, we find that the demand response that can participate in the wholesale market should be paid the marginal value of its contribution." The full text of the Order on Rehearing is available on the NEM Website.

Click here to view all past updates.
NEM Comments on Accelerated Switching Timeframe

The Commission issued a Tentative Order setting forth interim guidelines on standards for changing a customer’s electricity generation supplier. The proposals are intended to facilitate the more timely transfer of the switch of a customer’s account from the utility to a competitive supplier or between competitive suppliers. The main elements of the proposal are to: 1) eliminate the ten-day confirmation waiting period within which the utility holds a customer enrollment request; 2) adoption of certain measures by electric generation suppliers (EGSs) regarding the communication to customers of the start date of service and to promote the timely submission of enrollment transactions to the utilities; and 3) provision of consumer education by EGSs, utilities and the Commission on switching timeframes.

In its comments, NEM supported the elimination of the ten day confirmation waiting period and corresponding utility confirmation letter to be replaced with a utility account transfer letter. NEM noted that there is a significant increased burden associated with including specific dates in EGS marketing and the disclosure statement. NEM suggested that consumers would be just as well served by the EGS providing a generalized explanation in marketing communications and the disclosure statement that their service will commence on the next utility meter read date coupled with the inclusion of the next meter read date in the account transfer letter. NEM supported the application of the Interim Guidelines, or an appropriate subset of the Interim Guidelines, to the natural gas industry, but suggested that the stakeholders may want to collaboratively consider the impact of the guidelines on the different switching process and operational standards that are in place at the gas utilities. The full text of NEM's Comments is available on the NEM Website.

Recommendations on Electric Utilities Default Service Plans

The Commission issued recommendations and guidelines with respect to the format and structure of the electric utilities' upcoming default service plans, which it said should be viewed, "as the starting point in developing the next phase of default service plans."

The recommendations are as follows:
1) the next phase of default service plans should run for two years;
2) with respect to energy contract durations: a) utilities should file plans limiting or eliminating the existence of short-term energy contracts extending past the end date of the upcoming default service plan time period; and b) utilities should limit the proportion of long-term contracts that make up their default service plan energy portfolios, and consider using already existing long-term contracts from previous or presently effective default service plans;
3)utilities should include an opt-in auction program in their upcoming default service plans;
4) utilities should include a customer referral program in their upcoming default service plans;
5) utilities should consider contracting with an EGS in order to satisfy their TOU rate requirement;
6) utilities should consider the incorporation of quarterly, semi-annual and/or annual default service rate over/under collection reconciliations within their next default service plans, and include more detailed information on how supply charges will be calculated for default service customers; and
7) utilities should file default service plans that create separate procurement groups for medium C&I customers.

The full text of the Order is available on the NEM Website.

Proposed Intermediate Work Plan in Retail Electricity Markets Investigation

The Commission issued a proposed intermediate work plan for comment in the Retail Electricity Markets Investigation. The proposed work plan sets forth the following recommendations:

"Expansion of consumer education to drive electric customers to, the PUC’s website dedicated to helping consumers shop for electricity, and to increase general awareness of competitive markets and how to shop;

Acceleration of the switching timeframe when a customer shops for an alternative supplier;

Initiation of a customer referral program;

Initiation of a retail opt-in auction program;

Inclusion of the EDCs’ price to compare on customer bills; and

Increase in coordination between EDCs and EGSs."

Comments will be due thirty days after entry of the Order. The full text of the Proposed Intermediate Work Plan will be posted on the NEM Website when made available electronically.

Secretarial Letter on Shopping Postcards for Electric Consumers

The Commission issued a Secretarial Letter directing electric utilities to produce and mail a Commission-endorsed postcard encouraging customers to shop for a competitive electric generation supplier as well as promoting the Commission’s PAPowerSwitch website. The utilities mailing should be completed no later than February 29, 2012. The full text of the Secretarial Letter is available on the NEM Website.

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