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February 21, 2014
NEM Annual National Energy Restructuring Conference

Please mark your calendars and plan to attend NEM’s Annual National Energy Restructuring Conference to be held April 29th-May 1st, 2014. This Conference is NEM’s premier event in which we host top energy industry regulators and legislators to share their views on the cutting edge issues in competitive energy markets. Registration is available at this hotlink. Accommodations are available at the Embassy Suites Washington, DC - Convention Center at this hotlink.

Click here to view all past updates.
Bills Introduced on Energy Choice

Two significant bills have been introduced in the legislature this session pertaining to energy choice. SB894 would amend current law to explicitly require electric suppliers to obtain a customer's written permission to change electric suppliers, or to add a new charge for a new or existing service or option. A hearing on SB894 is scheduled for March 4th.

HB928 would require the Commission to submit a report to the General Assembly on consumer protection issues related to the competitive electric and natural gas markets. An initial hearing on HB928 was held this week. Issues to be addressed in the report would include:
"(1) the adequacy of the Commission’s current retail electricity and gas customer choice consumer protection regulations;
(2) the adequacy of the Commission’s enforcement of current electricity and gas customer choice consumer protection laws and regulations;
(3) whether to require further safeguards in connection with the verification of retail electricity or gas contracts;
(4) whether to require further safeguards in connection with consumer comprehension of retail electricity or gas contracts;
(5) whether to require licensing of individuals who sell or facilitate the sale of retail electricity or gas contracts;
(6) any other issues the Commission considers relevant to these issues; and
(7) whether legislation is necessary to further any recommendations in the report, and if so, shall include draft legislation of any necessary statutory changes."

The full texts of SB894 and HB928 are available on the NEM Website.

New York
Click here to view all past updates.
Commission Acts on Retail Market Investigation

At its agenda meeting this week, the Commission took long-awaited action in the retail market investigation initiated in 2012. The Commission directed that the following changes be made in the residential and small commercial retail energy markets:

• “Utilities will be required to implement on-line bill calculators for ESCO customers to enable customers to compare historically what they were charged by their ESCO as compared to what they would have paid if commodity service was obtained from the utility;
• ESCOs will be required to file historic pricing information for products without energy related value-added services for the Department to compile and publish; and
• ESCOs can only enroll customers who participate in utility low-income assistance programs in ESCO services that guarantee savings over what the customer would have been charged by the utility, or that provide energy-related services designed to reduce a customer’s overall energy bill.”

The Commission decided to revise rules on ESCO marketing and consumer enrollment by:

• “Requiring that ESCOs conducting door-to-door and telephone marketing of energy services to conduct independent third-party verification of those sales, and to use a specific introductory statement identifying the company representative.
• Ensuring that ESCOs are held accountable for any instances in which their marketing and enrollment activities fail to satisfy requirements of the rules governing business procedures for ESCOs and utilities, known as Uniform Business Practices (UBP), regardless of whether the customer was solicited by an ESCO employee, contractor or third party.”

Finally, the Commission noted that it will investigate ways that ESCOs can facilitate the development of energy-related value-added product and services for residential and small commercial customers. Issues to be examined in the investigation include:

• “Identifying ways for ESCOs to provide value-added services, rather than just provide reduced costs.
• Identifying changes to data access, billing policies and practices to facilitate development of value-added services.
• Identifying ways to streamline processing of ESCO enrollment requests.”

The full text of the Order will be posted on the NEM Website when made available electronically.

Click here to view all past updates.
Review of Variable Electric Rate Products

At its agenda meeting this week, the Commission voted to open a proceeding to review the rules, policies and consumer education measures regarding variable rate retail electric products. This is in response to a significant number of high bill complaints recently received by the Commission, that appear to have been caused by wholesale market volatility in recent weeks. The Commission noted that suppliers are required to provide consumers with disclosure statements that are to include the price to be charged. With respect to variable rate products, the Commission noted that, “It appears that some customer contracts had no ceiling on the variable rate that could be charged by the EGS.” The Commission noted a number of measures they have taken to educate consumers about variable rate products, including press releases and additional website information. It is also noted that OCMO is currently studying potential revisions to the disclosure statements, including, “whether, for variable rates, disclosure statements should include some form of pricing history and whether these statements should expressly state that uncapped variable rates may be increased without limitation.” The Commission will also continue its efforts to accelerate customer switching timeframes.

As a first step in the proceeding, comment is sought on the following questions:

“In response to the recent volatility that has occurred with variable rate electric supply products, interested stakeholders are asked to respond to the following questions regarding variable-priced contracts:

For variable-priced contracts without explicit formulaic pricing parameters
• Should EGSs be required to provide advance notice of price changes to customers?
• Should the advance notice requirement be waived for minor contract price changes, within a certain bounds? If so, what bounds are appropriate?
• If advance notice is required, how far in advance of the meter read date should notice be provided and how can this notice be provided?
• Do variable rate contracts without explicit pricing parameters provide consumers with the information needed to make informed decisions? If not, what is the remedy?

For variable-priced contracts with explicit formulaic pricing parameters
• Should EGSs be required to provide a historical pricing history for this formulaic rate structure?
• If so, how many months should be provided, and where should this information be provided so as to be available to all participating customers?

For daily recorded ad automatic meter reading capable electric utilities
• Under current plans, when will mid-cycle EGS switches be implemented?
• How much can these plans be accelerated, and at what additional cost?"

The full text of the Joint Motion of Vice Chairman Coleman and Commissioner Cawley is hotlinked here and the Order will be posted on the NEM Website when available electronically.

In addition, a Secretarial Letter was issued from OCMO requesting that electric generation suppliers, “that provided variable-priced service to residential and small business customers in Pennsylvania during the time period starting December 1, 2013 and ending February 20, 2014 send copies of the relevant disclosure statements to the OCMO email inbox.” OCMO requests that the disclosure statements be submitted by March 3, 2014. The full text of the Secretarial Letter is available on the NEM Website.

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