The Commission has opened a proceeding to review the utilities' applications to implement various default rate design proposals for large customers (over 200 kW). The Commission wanted a design that provides a critical peak price signal. The rates are expected to be implemented by June 2005. A prehearing conference was held February 24.

The Commission also issued a decision approving the 2005 Demand Response Goals, Programs and Budgets. The order was issued in response to the requests by the utilities for approval of their demand response programs and budgets for 2005-2008. The order specifically addresses summer 2005 day-ahead notification demand response programs and reliability-triggered programs.

PG&E recently filed a report on the cost effectiveness of its demand response programs and demand side management activities.

Connecticut Natural Gas, Yankee and Southern Connecticut Gas, along with the Consumer Counsel and 2 marketers, filed a proposed Year 4 Interim Settlement Agreement. Year 4 begins on November 1, 2005. The agreement provides for approximately 90% recovery of shifted costs and a temporary transition charge of 43 cents/Mcf for firm transportation customers (an increase from the current 34 cent/Mcf). An open season will be held by August 15 for Riders BAL and STB service, with Yankee also releasing long-haul capacity for 12 months via an open season. Suppliers also will purchase long-haul service from each utility via an open season.

The parties are still negotiating a long-term solution for shifted costs.

Although NEM has not yet reviewed the order, it is reported that the Commission has ordered Georgia Power to revise its formula for paying alternative/renewable power suppliers. Specifically, Georgia Power should be able to obtain alternative/renewable energy supply on a year-round basis, instead of only during peak summer demand times.

On and after March 1, utilities are required to refer to default supply service as “basic service”.

In ConEd's unbundling proceeding, ConEd filed reply comments that included new unbundled rates and tariff sheets. Comments on the new unbundled rate tariff sheets are due by March 4. Comments only are allowed on the new language proposed by ConEd.

In National Fuel's ongoing case regarding a proposed increase in rates and charges, National Fuel has again extended the suspension of prices. The prices will now take effect on August 31, 2005.

In its continuing settlement talks with the Commission and Staff, a chance of settlement has caused the hearing in the case to be delayed until March 21, 2005.

In the AEP rate stabilization case, the Commission issued an order on, among other things, AEP’s generation and distribution rates, default service, and rates for customers returning to default service for 2006 through 2008. AEP’s market design phase ends on December 31, 2005. Ohio Power will not charge the regulatory asset charge rider to the first 20% of residential customers that switch to suppliers; however, Columbus Southern’s shopping incentive ends on December 31, 2005. AEP’s fixed generation rates were increased and AEP will be the default service provider for 2006-2008.

Unfortunately, AEP is not required to do a competitive bid for 2006-2008; the minimum stay requirement for returning customers is long (up to one year); and shopping customers will not get a credit for PJM costs.

Requests for rehearing were due Friday, February 25. NEM was an active participant in this case and is considering whether to file a rehearing request.

In response to East Ohio’s proposal to waive the rules prohibiting the disconnection of customers for non-payment of supply charges, various suppliers have filed in support of East Ohio’s request. The proposal would treat customers of suppliers and customers of East Ohio the same regarding disconnection procedures. A similar waiver was granted to Columbia.

The Consumers’ Counsel has filed for rehearing of the Commission’s January order regarding FirstEnergy’s default rate for returning residential customers. Specifically, the Consumers’ Counsel challenged the standard offer rate plus 5% plus a surcharge.

CG&E filed proposed tariff sheets removing the minimum stay provisions. CG&E states that the residential minimum stay provisions are not effective until the Commission issues an order in the CG&E mminimum stay proceeding (which began in 2001).

Non-residential customers who want to buy generation service from a supplier may either submit to CG&E: (1) a one-page form of notice as proposed by Constellation; (2) the agreement proposed by CG&E, as modified by the Commission, or (3) a copy of the supplier contract. A copy of the Commission's order approving these 3 forms of notice is available on NEM's website.

The Commission issued its quarterly report on the status of competition in the energy markets. The report includes aggregated basic market data, customer shopping and load levels compared to other states, and a summary of important Commission decisions.

After receiving comments from the Demand Side Response Working Group, Commission Staff is developing a recommended policy statement on demand side responses issues. The Commission is expected to request comments before adopting a final policy statement. The proposed recommendations are expected to require utilities to have demand side response pilots implemented by June 1, 2006, with demand side response programs available to all customers by 2010.

With the case expected to be scheduled for hearing shortly, the Columbia Gas fixed price services proceeding has entered into settlement negotiations. The proposed services will not go into effect until August 2005.

Members should inform NEM headquarters of their company's position and let them know if you would like to participate in the settlement conference calls. NEM can also circulate to its members a copy of Columbia's confidential settlement proposal.