NEM filed comments to the Commission in response to questions and information presented at its California Customer Choice Informal Public Workshop that was convened at the end of October. Stakeholders in the workshop provided information about regulatory frameworks to provide for enhanced energy competition and consumer participation in the retail marketplace for Commission consideration. NEM submitted comments supporting the market model in Texas, which has yielded significant benefits for consumers in terms of robust supplier participation, hundreds of products, an approximate 60% reduction in rates since the introduction of competition, robust customer shopping in all customer classes, extensive availability of price comparison information and consumer education resources, and an exceedingly low complaint rate. NEM suggested that when the Commission evaluates market models for California that it should also explicitly consider, "how does this choice model encourage consumer and competitive supplier participation in the market?.”

NEM suggested that market development difficulties identified during the workshop were attributable to various jurisdictions decision to retain the utility in the merchant function.

NEM recommended that the most compelling choice of regulatory framework involves the utilities exit from the merchant function and focus on its core function of ensuring reliable delivery infrastructure. In addition, NEM recommended that a regulatory framework include: market-based POLR pricing; reasonable consumer protection requirements, supplier certification and marketing standards; efficient and cost-effective means to enroll consumers; expeditious consumer switching timeframes; consolidated billing of utility delivery charges and competitive supplier charges; timely competitive supplier access to data; consumer education; requirements for prudent and aggressive management of stranded costs; provision of regulatory certainty to encourage supplier entry, investment and market participation; and compatibility of wholesale market design with retail choice. The full text of NEM's Comments is available on the NEM Website.

Act 341 passed by the legislature last year requires each electric utility and alternative electric suppliers (AES) to demonstrate to the Commission that it owns or has contractual rights to sufficient capacity to meet forward capacity obligations. If an AES does not make the required capacity showing, a state reliability mechanism (SRM) capacity charge will be assessed with the associated capacity for such AES customers provided by the incumbent utility. The Commission has adopted SRM capacity charges to be applicable in the Consumers Energy and DTE service territories beginning June 1, 2018. Consumers was ordered to implement a SRM capacity charge of $109,714 per megawatt year, or $300.59 per megawatt day, for full service customers and for customers of AESs, on a pro rata basis, that have not demonstrated compliance with forward capacity obligations. DTE was ordered to implement a SRM capacity charge of $97,527 per megawatt year, or $267.20 per megawatt day, for full service customers and for customers of AESs, on a pro rata basis, that have not demonstrated compliance with forward capacity obligations. The full texts of the Consumers Energy Order and DTE Order are available on the NEM Website.

The Board approved a process for procurement of Basic Generation Service (BGS) for the period beginning June 1, 2018. The Board found that the auction process it approved sixteen years ago has successfully served customers and appropriately balances the concerns and interests of varied stakeholders. For the next round of BGS procurement, the utilities will again conduct two descending clock auctions, one to procure service for C&I customers on hourly priced service, and the other to procure service for residential and small commercial customers. The BGS-CIEP auction will procure service for a twelve month period, and the BGS-RSCP auction will procure service representing one-third of the BGS-RSCP load for a thirty six month period.

The utilities had proposed a modification to the terms of Section 15.9 of the Supplier Master Agreement to permit Board approval of payment to BGS suppliers for PJM-implemented cost reallocations to take effect in advance of a final FERC Order. The Board declined to adopt that modification, noting the utilities may petition the Board for authority to collect and pay for such changes prior to a final FERC Order on an individual case basis.

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