NEM's 13th Annual National Energy Restructuring Conference - NEM will convene its 13th Annual National Energy Restructuring Conference at the Embassy Suites Hotel Washington D.C. Convention Center on April 27th & 28th, 2010. This year’s theme is “Renaissance in Energy Markets.” Topics of discussion will include Competitive Energy Supply, Demand, Prices and Economic Opportunities. Please use this hotlink to register for the event. We have already confirmed a number of key regulators and legislators and this promises to be a "can't miss" event.

Confirmed participants include: Jon Wellinghoff, FERC Chairman; James Cawley, PAPUC Chairman; Alan Schriber, OH PUC Chairman; Douglas Nazarian, MDPSC Chairman; Manuel Flores, ICC Chairman; Orjiakor Osiogu, MIPSC Chairman; David Armstrong, KYPSC Chairman; Sharon Reishus, ME PUC Chairman; Betty Ann Kane, DCPSC Chairman; Erin O'Connell Diaz, ICC Commissioner; Robert Curry, NYPSC Commissioner; Catherine Pugh, MD State Senator; Jess Totten, TX PUC Director; and Eric Matheson, PAPUC Energy Advisor.

Coincident with NEM's sponsorship of and participation in NARUC's winter meeting this week, in which the topic du jour was smart grid and demand response, NEM released a policy paper on "Achieving Significant, Near-Term Demand Response by Residential and Small Commercial Customers." NEM explained that Demand Response (DR) should be "jump started" now through the use of already proven DR strategies and the development of associated transitional, DR load profiles for residential and small commercial customers by drawing from the utilities' 40 years of experience and extant, statistically reliable usage data plus new smart grid pilot programs. NEM and its members are uniquely situated to provide the benefits of load shifting and demand reduction to millions of mass market retail consumers nationwide utilizing current metering practices at the utility and ISO level.

NEM envisions working with the various state PUCs and the related utilities and ISOs in defining the demand response strategies for retail marketers to deliver in that area. Moreover, NEM envisions jointly defining the statistical load profile data necessary based on the data available with the utilities and national DR organizations. The full text of "Achieving Significant, Near-Term Demand Response by Residential and Small Commercial Customers" is available on the NEM Website.

NARUC held its Winter Meeting this week in Washington, DC. NEM sponsored and received an excellent reception at the event. Many thanks to our members that sponsored and attended the NARUC reception and meeting.

NARUC's electricity committee received stakeholder commentary on pending federal OTC derivatives legislation. It was argued that the potential costs of the increased margining requirement that would be associated with mandatory central clearing could run a typical utility in the range of $250 to $400 million in additional cash margin which would of course end up being passed on to ratepayers. With respect to CFTC versus FERC jurisdiction in the OTC derivatives bill, FERC stated its position that FERC jurisdiction should be preserved over those things it clearly currently regulates (it does not take a position on that which they do not currently regulate). For example, FERC jurisdiction over FTRs should be retained. The legislation should not define RTOs/ISOs as DCOs subject to CFTC jurisdiction. The legislative definition of "swap" should not be so broad as to include capacity markets and day ahead markets.

The NARUC Board of Directors passed a resolution on the pending OTC Derivatives legislation that provides in relevant part:
"RESOLVED, That new financial legislation being considered by Congress should weigh the costs of potential end-user utility rate increases versus the benefits of new standards for the clearing of OTC risk management contracts used by natural gas and electric utilities for legitimate hedging purposes; and be it further
RESOLVED, That any federal legislation addressing OTC risk management products should provide for an exemption from mandatory clearing requirements for legitimate hedging activity in natural gas and electricity markets; and be it further
RESOLVED, That any exemption to the mandatory clearing requirement for OTC derivatives be narrowly tailored as to not allow excessive speculation in natural gas and electricity markets; and be it further
RESOLVED, That the FERC, and the PUCT for Texas/ERCOT, charged with the statutory obligation to protect the public interest and consumers, should continue to be the exclusive Federal regulators with authority to oversee any agreement, contract, transaction, product, market mechanism or service offered or provided pursuant to a tariff or rate schedule filed and accepted by the FERC, or the PUCT for Texas/ERCOT."

Also of note, the FERC/NARUC Smart Grid and Demand Response (DR) Collaboratives met again at the meeting. Various groups involved in smart grid/dr gave updates on the status of their efforts. FCC noted that it will release a Broadband Plan in March 2010 that will focus on energy. FCC argued that competition should be allowed in DR with the utilities to unlock innovation. Energy data should be made available to consumers and authorized third parties. FERC with DOE must submit a DR National Action Plan Implementation Proposal to Congress by the end of the year. Prior to that, FERC will publish a final DR National Plan in June 2010. It will also be continuing its biannual DR and advanced metering surveys. NIST is also developing DR standards. Additionally, a smart grid information clearinghouse that will serve as a public smart grid web portal will be made available on the web at www.smartgridinformation.org.