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December 19, 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.

CFTC Proposed Rulemaking on Significant Price Discovery Contracts on Exempt Commercial Markets

CFTC opened a proposed rulemaking to implement the provisions of the CFTC Reauthorization Act of 2008 providing for increased oversight of exempt commercial markets (ECMs). Specifically, the law created a new regulatory category "ECMs with significant price discovery contracts [SPDCs]" that are subject to increased regulatory and reporting requirements. The proposed rulemaking seeks to implement this change by: revising ECM information submission requirements; establishing procedures and standards by which an ECM contract will be deemed to perform a "significant price discovery" function; and providing compliance guidance for ECMs with SPDCs. Comments on the proposed rules are due February 10, 2009. The full text of the Proposed Rulemaking is available on the NEM Website.

FERC Order 704-B on Gas Market Reporting

FERC issued Order 704-B on gas market reporting. NEM had requested that the Commission explicitly list in the Definitions section of Form 552, Section VII, in the volumes to be excluded from reporting, “sales to and purchases by retail consumers pursuant to a state-approved retail access program.” The Commission had previously explicitly recognized a reporting exclusion for LDC bundled sales.

The Commission clarified the extent of the reporting obligation for retail access transactions as follows: "Form No. 552 requires reporting of volumes associated with transactions that utilize, contribute to, or could contribute to a price index. Transactions made by marketers under state-sponsored retail access programs may or may not be reportable, depending on the terms of the transactions at issue. If a particular retail marketer transaction does not utilize a price index, is not reported to an index publisher, and could not contribute to a price index even if reported to a publisher, then the transaction would not be reportable on Form No. 552. However, not all retail marketer transactions are structured in such a manner. We therefore decline to modify Form No. 552 to provide a blanket exclusion for all retail marketer transactions to end-users as suggested by NEM and Gas South. We urge all potential Respondents to review the terms of Form No. 552 and our orders to determine whether specific transactions are reportable. As we discussed in Order No. 704-A, Respondents may contact our new compliance help desk for direction regarding specific transactions once they begin to complete Form No. 552. Alternately, Respondents may contact Commission staff by electronic mail with questions regarding Form No. 552." The full text of Order 704-B is available on the NEM Website.

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Proposed Competitive Natural Gas and Electric Supplier Rules

Proposed natural gas and electric consumer protection and supplier-utility interaction rules have been published in the Maryland Register for comment. With respect to the retail natural gas market, the proposed rules pertain to pre-enrollment information, transfers of service, supplier-utlity coordination, utility consolidated billing, POR or prorated payments, and residential and non-residential consumer protections. With respect to the electric market, the proposed rules pertain to utility consolidated billing, utility responsibilities in the event of supplier default, and POR or prorated payments. Comments on the natural gas and electric rules are due January 20, 2009. The full text of the Proposed Rules can be viewed in the Maryland Register at:

New York
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Utility Filings on Referral Programs

NYSEG/RG&E and O&R made filings with the Commission on ESCO referral programs, in addition to the utility filings discussed in last week's update.

NYSEG/RG&E note that they have had referral program filings pending before the Commission. NYSEG/RG&E submitted program implementation proposals, costs of program implementation and on-going maintenance, and sample calculations of marketer charges for the incremental program costs. NYSEG/RG&E propose to use the "ESCO Service" approach in their programs and to incorporate a seven percent discount rate. Customers would be assigned to participating ESCOs and could not choose an ESCO. To take part in the referral program, marketers must use the utility's consolidated billing and POR service. Participating ESCOs must take part in the program for a minimum two year term, and there must be at least three gas marketers and three electric marketers at all times during the program. The full text of NYSEG/RG&E's Filing is available on the NEM Website.

O&R also filed a projected budget for the continuation of its referral program. Since O&R's program has been in place since 1999, it will experience no costs to establish the program. The costs of continuing the program are marketing costs (i.e., bill inserts) and program administration costs (enrolling customers, calculation and input of the discount price in the billing system, monitoring the price during the introductory period). O&R projects that administrative costs would be approximately $20,000 per year. Marketers would be assessed a pro rata share of these costs annually, and the charges would be netted against monthly POR disbursements. Marketing costs vary by number of bill inserts or advertising done during the year. O&R would develop a marketing plan with participating ESCOs on an annual basis, and the marketing charges would be netted against POR disbursements. The full text of O&R's Filing is available on the NEM Website.

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Commission Issuances on Gas POR Programs

The Commission issued interim guidelines for the design and operation of POR programs by the gas utilities. The guidelines are meant to retain a degree of flexibility in utility implementation to reflect their unique circumstances. The deadline for gas utilities to voluntarily file a POR program is March 31, 2009. The Commission has stated that POR programs, "are perhaps the best chance to increase effective competition in Pennsylvania's retail natural gas supply services market." The full text of the Interim Guidelines will be posted on the NEM Website when made available electronically.

The Commission previously determined to modify the Customer Service Guidelines to allow gas utilities to terminate service for customer non-payment in POR programs. The Commission specifically decided, "we will revise Guideline 6(a)(2) to allow NGDCs to terminate service to a customer for non-payment of NGS charges related to natural gas supply service charges as that term is defined in 52 Pa. Code 62.72 where the charges have been purchased by the NGDC as an account receivable in a Commission-approved POR program." The Commission made the revision to, "permit NGDCs to implement and operate POR programs and [] ensure that all customers, regardless of whether they purchase natural gas supply service from the NGDC or the NGS, will receive the same consumer protection afforded by the termination procedures now in place." The full text of the Order is available on the NEM Website.

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