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February 11, 2011
NEM Annual Meeting

NEM's 14th Annual Conference will be held April 25-27, 2011, at the Embassy Suites Hotel, Washington DC Convention Center. We have already begun the process of inviting officials to participate. An outstanding group of Public Officials have already confirmed for this event. The Agenda is available at this hotlink. Member and Sponsor input on additional potential invitees are strongly encouraged. You may register at this hotlink.

Click here to view all past updates.
OPC Petition on Electric Utilities Presentation of PTC Information

OPC filed a petition with the Commission with respect to its previous Order on the electric utilities presentation of Price to Compare information. Specifically, OPC requests: "1) clarification of the Commission’s earlier order in this matter, 2) an order directing the investor-owned utilities to correct erroneous standard offer service (“SOS”)pricing information on bills and websites, and 3)expedited review of this petition." In its Petition, OPC argues that notwithstanding the PTC Order, "some of the utilities’ bills are still not providing updated and accurate information on SOS prices. Further, information on some of the utility websites is also not accurate and does not clearly relay SOS pricing information to customers." OPC offered a proposed timeline for the utilities to update their webpostings and bill presentation of PTC information. The full text of the Petition is available on the NEM Website.

Proposed Order on Elimination of SOS Administrative Charge

A Proposed Decision was issued by the Hearing Examiner in cases to examine Pepco and Delmarva's Standard Offer Service-related cash working capital requirement. The Hearing Examiner found that, "the Administrative Charge shall be eliminated; that the return component shall be eliminated; that all SOS costs and revenues will be considered as part of the Companies' standard operations in the next rate case; and that until the next rate case, CWC costs shall be recovered dollar for dollar for cost recovery and shall earn a rate of return set at the authorized rate of return as set in each Company's last rate case and shall be subject to an annual review proceeding for true-up purposes. No additional return is ordered as using the overall cost of capital is a generous level of return and is a reasonable rate of return based upon the risk level of providing SOS."

The Hearing Examiner further found that, "since all customers must use distribution services, there is no overcharge of non-SOS customers by having some costs embedded in distribution rates. I further find that continuing the Administrative Charge causes the rate paid for SOS to be artificially too high. Since the market is fully mature and functional, there is no need to have any adjustments to try to keep SOS rates too high and no need in a competitive market to try to benefit suppliers. Since all customers pay the same distribution rates, suppliers who can operate efficiently will still be able to be profitable. It is the utilities who must accept customers that suppliers reject as not worthy or as too high a business risk to take on as a customer. It is time to see if the end game objectives of the move toward competition will present themselves or whether the experiment is a failure."

The Proposed Order will go into effect as a final Order on March 8, 2011, unless the Commission takes other action or an appeal is filed. The full text of the Proposed Order is available on the NEM Website.

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Proposed Rulemaking on Marketing and Sales Practices

The Commission issued a proposed rulemaking on marketing and sales practices for electric and natural gas suppliers. The proposed rulemaking, "covers a wide range of topics and recommends best practices for direct (door-to-door) marketing, telemarketing and sales. . . . The proposed guidelines will apply to both EGSs and NGSs and to any entity conducting marketing and sales activities on their behalf. The proposed regulations are based on the interim guidelines on marketing and sales practices that the Commission adopted in its final order on Nov. 5, 2010."

Vice Chairman Christy issued a separate statement requesting comment on whether, "door-to-door is a valid marketing strategy" and, "whether the Commission should continue to allow door-to-door sales of electricity and gas to residential customers." Christy also requested that the electric utilities provides statistics on the complaints and phone calls they have received from customers about door-to-door marketers. The full text of Christy's Statement is available on the NEM Website.

Comments on the proposed rules are due 60 days after publication in the Pennsylvania Bulletin. The full text of the Proposed Rules will be posted on the NEM Website when made available electronically.

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