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January 15, 2010
Winter Executive Committee Meeting

January 2010 Executive Committee Meeting - NEM’s Annual Winter Executive Committee Policy and Planning Meeting will be held January 19 & 20, 2010, at the headquarters of South Carolina Research Authority in Charleston, South Carolina. NEM’s room rate has been secured at $129.00 per room per night at the Hilton Garden Inn Charleston Airport, 5265 International Blvd., N. Charleston, SC 29418. The Executive Committee sets the course for NEM’s advocacy in the coming year at this meeting. The Meeting Agenda is hotlinked here. Many thanks to Bill Mahoney and South Carolina Research Authority for the generous offer to host this meeting. Please use this hotlink to register.

Supreme Court Decision on Mobile Sierra Doctrine

In a case stemming from a FERC-approved settlement agreement that established a forward capacity market in New England, the Supreme Court examined the application of the Mobile Sierra doctrine to third party challenges to contracts. Under Mobile Sierra, there is a FERC presumption that the just and reasonable rate requirement is satisfied under an arms length wholesale energy contract. Parties challenging the New England settlement argued that the Mobile Sierra standard did not apply to non-contracting parties. The Supreme Court disagreed and held that, "To retain vitality, the [Mobile Sierra] doctrine must control FERC itself, and, we hold, challenges to contract rates brought by noncontracting as well as contracting parties." In other words, "the Mobile Sierra presumption does not depend on the identity of the complainant who seeks FERC investigation. The presumption is not limited to challenges to contract rates brought by contracting parties. It applies, as well, to challenges initiated by third parties." The full text of the Decision is available on the NEM Website.

New York
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NFG Proposed Tariff Revisions on Capacity

NFG filed proposed tariff revisions with the Commission on capacity. Specifically, NFG would add a section to notify supplier that it, "may from time-to-time post advisory or mandatory instructions on its web site regarding minimum flow requirements applicable to Mandatory Upstream Transmission Capacity (MUTC) delivery points." NFG suggests that in "directing deliveries to specific receipt points, the Company will be better able to match upstream deliveries with location-specific dispatching requirements, a functionality that will become increasingly important to maintaining reliability as customers migrate to ESCO service in greater numbers." NFG also proposes to, "update the Grandfathered Upstream Transmission Capacity (GUTC) threshold to the currently available quantity based upon the most recent capacity demonstration." The full text of NFG's Filing is available on the NEM Website.

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Commission Approves Vectren Auction Results

This week the Commission approved the results of Vectren's standard choice offer (SCO) auction, procuring gas supplies for utility customers from April 1, 2010, through March 31, 2011. The auction yielded a retail price adjustment of $1.55 per Mcf. The SCO rate is equal to the retail price adjustment plus the NYMEX month end settlement price. Chairman Schriber remarked that the, "auction netted positive results for Vectren customers," and, "the new retail price adjustment demonstrates that the natural gas market provides a better commodity price for Vectren customers than the gas cost recovery mechanism did in the past." The full text of the Order is available on the NEM Website.

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Commission Proposes Change to Electric Default Service Regulations and Policy Statement

The Commission decided to issue proposed revisions to the policy statement and regulations on electric default service to incorporate the requirements of Act 129 of 2008. Specifically, the revisions include amendments to the definitions and terminology of default service provider, that default service supply be procured using a "lowest cost" approach, and alternative energy portfolio standards. The rulemaking pertains to:
1) default service procurement and implementation plans;
2) default service rate design and recovery of reasonable costs;
3) Commission review of default service programs and rates; and
4) default service customers.

Comments are due thirty days after publication of the proposed policy statement and rulemaking in the Pennsylvania Bulletin. The full text of the Proposed Policy Statement and Rulemaking will be posted on the NEM Website when made available electronically.

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