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January 7, 2011
NEM Winter Executive Committee Meeting

NEM's Winter Executive Committee will take place January 17-19, 2011, at the Doral Hotel and Resort in Miami, Florida. The Agenda is available at this hotlink. Many thanks to Doug Marcille and U.S. Gas and Electric for hosting the Winter Meeting. Hotel reservations should be made at this hotlink.

You may register for the Winter Executive Committee Meeting at:

Oxxford Utility Customer Information Services, LLC Joins NEM

NEM is pleased to announce that Oxxford Utility Customer Information Services, LLC (UCIS) has joined the Association. Stephen Monseu, President, will represent Oxxford UCIS within NEM.

Oxxford Utility Customer Information Services, LLC began as a strategic business unit of the Oxxford Information Technology Ltd., (OIT) Corporate family in 1993. Since 1980, Oxxford IT and UCIS, have housed one of the industry's largest compiled commercial and consumer files for appending to client's customer databases and creating prospect databases.

Additionally, Oxxford is a recognized leader in the application of advanced technology and analytical techniques to achieve “practical and actionable information-based solutions” for its client’s marketing initiatives utilizing internal or national commercial and consumer databases (i.e., D&B, Experian, TRW, Compass, Equifax, and Oxxford's proprietary businesses database of over 8 million businesses) .

Building upon Oxxford IT’s achievements and blending energy industry-specific know-how and qualifications, Oxxford UCIS personnel provide the business community with the tools needed to survive and prosper in what is and will continue to be a fiercely competitive economic arena. Oxxford provides products and services to the energy, financial, telecom, and insurance industries.

CFTC NOPRs on Swap Dealers and End User Exemption

CFTC issued the formal proposed rulemakings on the definition of "swap dealer" and the end user exemption as part of its efforts to implement the Dodd Frank Act.

With respect to the definition of "swap dealer" CFTC intends to closely follow the statutory language in Dodd Frank but also distinguishing them as follows:
"• swap dealers tend to accommodate demand for swaps from other parties;
• swap dealers are generally available to enter into swaps to facilitate other parties’ interest in entering into swaps;
• swap dealers tend not to request that other parties propose the terms of swaps; rather, they tend to enter into swaps on their own standard terms or on terms they arrange in response to other parties’ interest; and
• swap dealers tend to be able to arrange customized terms for swaps upon request, or to create new types of swaps at their own initiative."

The de minimis exemption from the definition of "swap dealer" would apply to those: 1) whose aggregate effective notional amount of swaps over the past 12 months does not exceed $100 million; 2) whose aggregate effective notional amount of swaps with special entities over the past 12 months does not exceed $25 million; 3) who does not deal with more than 15 counterparties, other than security-based swap dealers, over the 12 month period; and 4) who do not enter more than 20 swaps as a dealer over the past 12 months.

CFTC also issued proposed language on the end-user exemption to the mandatory clearing requirement for swaps when at least one party to the swap is not a “financial entity,” the swap is being used to hedge or mitigate commercial risk, and a notice is provided regarding how it generally meets its financial obligations associated with entering into non-cleared swaps. In determining whether a swap hedges or mitigates commercial risk, factors will include:

"• qualifies as bona fide hedging under CEA rules;
• qualifies for hedging treatment under Financial Accounting Standards Board Accounting Standards Codification Topic 815, Derivatives and Hedging (formerly known as Statement No. 133); or
• is economically appropriate to the reduction of risks in the conduct and management of a commercial enterprise, where the risks arise in the ordinary course of business from:
o a potential change in the value of (i) assets that a person owns, produces, manufactures, processes, or merchandises, (ii) liabilities that a person incurs, or (iii) services that a person provides or purchases;
o a potential change in value related to any of the foregoing arising from foreign exchange rate movements; or
o a fluctuation in interest, currency, or foreign exchange rate exposures arising from a person’s assets or liabilities."

Comments on both of the NOPRs are due February 22, 2011.

The full texts of the Swap Dealer NOPR and the End-User Exemption NOPR are available on the NEM Website.

Click here to view all past updates.
Rulemaking on Electric ABC Licensing Rules

The Commission has initiated a rulemaking to consider changes to its regulations on the licensing of retail electric agents, brokers and consultants (ABCs). The proposed rule changes would implement statutory changes. The rules would explicitly exempt from licensing, "Any person acting exclusively on behalf of a retail electric supplier on condition that exclusivity is disclosed to the customer." The proposed rules would also require licensed ABCs to make disclosures that they: are not employed by the electric utility; price per kwh and total anticipated cost over the proposed customer contract; and, if applicable, that the licensee will be receiving compensation from the supplier. The full texts of the Notice Order and Proposed Rule Changes are available on the NEM Website.

Click here to view all past updates.
Commission Report on Retail Gas Competition

The Commission submitted its report on retail gas competition to the Legislative Reserach Commission as directed by legislature. The Report states that, "the Commission can only conclude that retail natural gas competition programs that include residential and the smallest non-residential consumers can be craffed to provide opportunities for consumers to benefit based on their unique circumstances. Furthermore, the Commission finds that consumers can be protected against deceptive marketing practices and loss of gas service if the necessary legislation and regulations are in place. Certainly, there is no assurance of savings on the cost of gas, but the incurrence of stranded costs, transition costs, and additional regulatory costs is virtually guaranteed."

The Commission did additionally conclude that, "As for expanded transportation services to commercial and industrial consumers, and governmental and other public entities that do not currently qualify for existing transportation services, the Commission finds it appropriate to encourage Atmos, Delta, Duke Kentucky, and LG&E to evaluate their existing transportation tariffs within the context of the operation of their distribution systems and the maintenance of system integrity. The EIA data on marketer and LDC prices for commercial customers, contrary to the data on prices for residential customers, reflects that the average marketer price was lower than the average LDC price in the majority of states. See Appendix C. Therefore, the Commission will review the reasonableness of the existing transportation tariffs of each of the above-named LDCs and any proposed changes in rate design and product and service availability in their next individual general rate proceeding. While the Commission does not advocate mandating or legislating volumetric thresholds for gas transportation service, as we believe the LDCs are best equipped to propose and implement their own systems’ products and programs, we are committed to ensuring the reasonableness of transportation tariffs by reviewing them in the LDCs’ next rate cases."

The full text of the Report is available on the NEM Website.

Click here to view all past updates.
Hearing on Licensing of Curtailment Service Providers

The Commission announced it will hold a legislative type hearing, "to consider whether curtailment service providers (“CSPs”) operating in Maryland should be subject to licensing as electricity suppliers pursuant to § 7-507 of the Public Utilities Article, Annotated Code of Maryland. Further, the Commission also will consider whether to require periodic reports from the CSPs in the event that the Commission determines that the CSPs are subject to licensing by the Commission." The hearing will take place on February 10, 2011, at 10AM in the Commission's 16th floor hearing room. The full text of the Notice of Hearing is available on the NEM Website.

Request for Comment on RFP for New Generation Facilities

The Commission is requesting comment on a draft RFP for the new generation facilities in Maryland. The Commission stated in the Notice for Comments that it, "anticipates that it will order the EDCs to submit proposals to construct, acquire, or lease, and operate new generation capacity resources in or around Maryland that meet the requirements of the RFP issued in this matter. Prior to issuing the RFP, the Commission is setting a comment period to allow parties to the proceeding and interested persons to review the draft and provide any comments on, or suggested edits or revisions to, the draft RFP. The fact that the Commission issued this Notice or has prepared a draft RFP should not be construed as a finding by the Commission that new generation is required or that the Commission has decided to order any party to construct, acquire, lease or operate new capacity resources in or around Maryland." Comments are due January 28, 2011. The full text of the Notice for Comment is available on the NEM Website.

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