Please mark your calendars for NEM's Winter 2007 Executive Committee Meeting. It will be held January 18-19, 2007, in Charleston, South Carolina. Please register for the event using this hotlink. The agenda is also available online.

A room block has been set aside at the Hilton Garden Inn (843-308-9330) for the January meeting at the rate of $92 per night. Reference the "NEM" block when calling. Alternately, you may also book online at www.charlestonairport.stayhgi.com and when it asks for group/convention code, enter "NEM" and the rate will be $92.

Many thanks to the South Carolina Research Authority for offering to host the meeting again this year.

Senator Reid introduced S.6, the "National Energy and Environment Security Act of 2007." It is a "message bill" identifying issues and goals for the 110th Congress to address. S.6 provides that,

"It is the sense of Congress that Congress should enact, and the President should sign, legislation to enhance the security of the United States by reducing the dependence of the United States on foreign and unsustainable energy sources and the risks of global warming by
(1) requiring reductions in emissions of greenhouse gases;
(2) diversifying and expanding the use of secure, efficient, and environmentally-friendly energy supplies and technologies;
(3) reducing the burdens on consumers of rising energy prices;
(4) eliminating tax giveaways to large energy companies; and
(5) preventing energy price gouging, profiteering, and market manipulation."

The full text of S.6 is available on the NEM Website.

Because of the D.C. Circuit's recent decision in NFG v. FERC on FERC's standards of conduct pertaining to interstate gas pipelines, FERC has issued interim rules to govern pipeline affiliate relations while the Commission considers its reaction to the Court decision. The D.C. Circuit found that FERC had failed to justify its expansion of the definition of energy affiliate beyond marketing affiliates to include non-marketing affiliates such as producers, gatherers, and LDCs. The interim rules retain the Order 2004 rules that were not challenged in the D.C. Circuit, and the challenged provisions are temporarily replaced with Order 497 standards of conduct, as a result "the standards of conduct for natural gas transmission providers will only govern the relationship between a transmission provider and its marketing affiliates."

Other issues were raised on appeal with the D.C. Circuit but were not ultimately addressed by the Court. However, FERC's interim rules reflect changes based on these issues as well. With respect to natural gas transmission providers, the interim rules: 1) omit restrictions on shared risk management activities and employees; and 2) revise the requirement to post all discretionary acts. Also, the Commission will permit natural gas transmission providers to treat lawyers as permissible shared employees and will not require newly certificated pipeline transmission providers to adhere to the standards of conduct until they begin transmission service.

The interim rules are effective as of January 9, 2007. A rulemaking is expected to be issued soon. The full text of the Interim Rules are available on the NEM Website.

NYISO has filed proposed changes to its OATT and Services Tariff pertaining to its customer prepayment program. Under the existing program, customers are able to reduce collateral requirements by agreeing to prepay for estimated purchases of energy and ancillary services on a weekly basis. NYISO proposes changes to the program that it argues are necessary to reduce NYISO's credit risk. The proposed revisions include: "i) requiring that weekly prepayments be made on the first business day of the week, rather than the last; ii) reducing the applicable cure period should a customer fail to make a prepayment when required; and iii) modifying the calculation used to determine the reduced amount of collateral that must be provided by a prepayment customer." NYISO proposes that the changes become effective as of March 10, 2007. The full text of NYISO's Filing is available on the NEM Website.