NEM is pleased to announce that Watts Marketing and Management Services, Inc. (WMS) has been nominated to NEM’s Executive Committee. WMS will be represented within NEM by CEO Otis Watts, Charles Dalphon, and William Siveter. WMS is a Baltimore, Maryland-based corporation that has been in existence for over 9 years. WMS is a customer acquisition company that provides a direct channel to customers through a door-to-door sales force with an expertise in the energy and telecom industries. WMS currently has over 20 clients nationwide and is one of the largest direct sales companies in the United States, focusing on the execution and management of successful customer acquisition campaigns. WMS has acquired over 500,000 customers for clients in the past 5 years.

NEM will hold its Winter Executive Committee and Policy Development Meeting on January 17 and 18, 2008, at the South Carolina Research Authority in Charleston, South Carolina for a third time. Please register at this hotlink. Hotel accommodations have been arranged at the rate of $109 per night at the Hilton Garden Inn, Charleston Airport, 5265 International Blvd., North Charleston, SC 29418. Please call (843) 308-9330 to make your reservations. An agenda for the meeting is forthcoming.

NEM booked the new Embassy Suites Hotel Washington D.C. Convention Center for the Annual Spring Membership Meeting and Restructuring Conference on April 29 and 30, 2008. Hotel accommodations have also been arranged at this facility located at 900 10th Street, NW, Washington, DC 20001. NEM has secured preferred hotel rates of $259.00 per night. Please call (202) 739-2001 to make your reservations.

Please call headquarters for sponsorship opportunities for the Spring Event as advertisements are currently being developed. Your attendance, participation and sponsorship of these events are needed and would be greatly appreciated as would your input on speaker invitations and discussion topics.

Congress is poised to take action on several points of energy legislation in the next several days. The House and Senate are looking to combine previous large bills and roll them together into H.R. 6 – The Energy Independence and Security Act of 2007 (caution: large file). Both chambers of Congress have passed various amended parts of the legislation, and the final energy bill is taking shape, including legislation topics of renewable fuels and energy, energy efficiency and conservation, grid modernization, and energy investment. Amongst the many issues included in the legislation, several issues merit special attention:

1. Renewable Electricity Standard: A modified version of the Renewable Portfolio Standard, the bill contains language that would implement a nationwide mandate that retail electric suppliers must use an increasing percentage of renewable electricity. Starting in 2010, the federal government would require 2.75% of retail electric supplier’s base amount be generated by renewable energy resources. The percentage increases yearly until 2020, where it is capped at 15% and will remain there until 2030. There is also a section that lays out a “program to verify and issue Federal Renewable Energy Credits to generators of renewable energy, track their sale, exchange and retirement and to enforce the requirements of the [Federal Renewable Electricity Standards Program.]"

The legislation defines a retail electric supplier as “a person that sells electric energy to electric consumers (other than consumers in Hawaii) that sold not less than 1,000,000 megawatt-hours of electric energy to electric consumers for purposes other than resale during the preceding calendar year. For purposes of this section, a person that sells electric energy to electric consumers that, in combination with the sales of any affiliate organized after the day of enactment of this section, sells not less that 1,000,000 megawatt hours of electric energy to consumers for purposes other than resale shall qualify as a retail electric supplier. For purposes of the paragraph, sales by any person to a parent company or to other affiliates of such person shall not be treated as sales to electric consumers.” The legislation is also clear that the Renewable Electricity Standard is meant to work in conjunction with the states and that each state may “adopt programs or requirements that exceed the required amount of renewable energy or energy efficiency in this program.”

2. Smart Grid: The Energy Independence and Security Act of 2007 sets forth a pronoucement that the Congress supports the development of a “smart grid,” complete with distributed generation, demand response, “smart” technologies and appliances, advanced metering and real-time pricing. Because of this, Congress is directing the Assistant Secretary of the Office of Electricity Delivery and Energy Reliability to develop and a Smart Grid Task Force. This Task Force would release a report within two years with a status update, “recommendations for State and Federal policies, and actions helpful to facilitate the transition to Smart Grid.” While preparing the report, the Task Force will solicit advice from FERC, the National Institute of Standards and Technology (NIST), the Department of Homeland Security, and a Smart Grid Advisory Committee (also created by the legislation). The Director of NIST will also be responsible for developing a “Smart Grid Interoperability Framework.”

3. Energy Security: The legislation would reorganize the State Department to include a Coordinator for International Energy Affairs to “ensure energy security is integrated into the core mission of the Department of State.” This section also requires the State Department to submit a report about placing energy experts in key US embassies and adds the Secretary of Energy to the National Security Council. The legislation would also require the President to submit to Congress at every State of the Union a “comprehensive report about the energy security of the United States.”

4. Increase in Taxes/Elimination of Some Tax Credits: On the natural gas side, the bill would eliminate several of the tax deductions and credits associated with the Energy Policy Act of 2005. One such provision is the elimination of the treatment of natural gas lines as 15-year depreciable property. The legislation also adds an estimated $15.3 billion of new taxes on the oil and natural gas production industry.

Timeline/Bill Track: The combined legislation is being offered as a substitute amendment for HR 6, but will include all of the elements of the original bills. The latest version (which is still subject to change) of what is likely to be passed in the House of Representatives later today can be found here (new H.R. 6 – The Energy Independence and Security Act of 2007). The Senate is reported to be picking up energy legislation next week. President Bush is expected to veto the legislation due to certain elements such as tax increases, CAFÉ Standards, and wage requirements.

Columbia Gas Transmission Corporation filed proposed revisions to its SIT Rate Schedule (“Storage in Transit”). Columbia maintained these changes were necessary, “to prevent customers from gaming the Rate Schedule to obtain longer term interruptible storage service in contravention of the intended use of that Rate Schedule as a short term balancing service.” The specific changes proposed by Columbia include: 1) an adjustment of Rate Schedule SIT eligibility requirements to exclude those shippers that obtain automatic balancing service through their firm no-notice storage service under Rate Schedules FSS/SST; 2) establishment of Imbalance Quantity cap for SIT shippers in an amount equal to 100,000 Dth; 3) imposition of a new Account Balance Charge against SIT shippers that exceed the Imbalance Quantity safe harbor; and 4) increasing the requirement that SIT shippers cross zero from twice every thirty days to once every ten days. NEM and Integrys Energy Services submitted comments urging the Commission to reject Columbia’s proposed revisions to its SIT Rate Schedule arguing that the changes are unnecessarily restrictive, have not been adequately justified and will significantly limit shipper flexibility on Columbia’s system.

The Commission has determined to suspend Columbia's filing to be effective May 7, 2008, pending the outcome of a technical conference to be convened by Staff. Columbia was instructed to be prepared to address the concerns raised in opposing parties' comments. The full text of the Order is available on the NEM Website. The full texts of Columbia's Filing and NEM/Integrys Energy Services' Comments are available on the NEM Website.