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February 28, 2020
NEM's 23rd Annual National Energy Restructuring Conference

NEM will convene its 23rd Annual National Energy Restructuring Conference on April 8-10, 2020, at the Hyatt Regency Washington on Capitol Hill in Washington, DC.

Confirmed meeting participants include:
Willie L. Phillips, District of Columbia PSC Chairman
Dallas Winslow, Delaware PSC Chairman
Bob Burns, Arizona CC Chairman
John W. Betkoski III, Connecticut PURA Vice Chairman
Odogwu Obi Linton, Maryland PSC Commissioner
Upendra Chivukula, New Jersey BPU Commissioner
Valerie Espinoza, New Mexico PRC Commissioner
Sadzi Martha Oliva, Illinois CC Commissioner
Angela O'Connor, Massachusetts DPU Chairman Emeritus
Betty Ann Kane, District of Columbia PSC Chairman Emeritus
John Quackenbush, Michigan PSC Chairman Emeritus
Erin O'Connell-Diaz, Illinois CC Commissioner Emeritus
Wayne Gardner, Pennsylvania PUC Commissioner Emeritus
Steven Lesser, Ohio PUC Commissioner Emeritus

You may use this link to register.

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Retail Electric Competition Workshop

The Commission convened a two-day retail electric competition workshop this week. At the meeting opening, Chairman Burns noted his opinion that retail competition is the wave of the future. Commissioner Olson was tasked with leading the meeting. He noted his support for retail competition, premised on twenty years of experience from other states, and in particular citing lower prices achieved in restructured states. Commissioner Olson noted that the Commission only needs three votes to pursue this path and that legislation has already been passed. Chairman Burns' and Commissioner Olson's offices had prepared a draft proposed rules package for consideration at the meeting.

Staff presented the results of its research on retail competition in other states. Staff said the data was inconclusive, pointing to jurisdiction-specific factors (resource base) that effect the results. Although Staff did opine that in most residential retail competition states the traditional providers have lower rates than competitors and that regulators receive a lot of complaints.

A number of consumer representatives from other jurisdictions and national organizations expressed their concerns with residential retail competition and urged the Commission not to proceed. The majority of the evidence they cited underlying that recommendation were flawed comparison studies to the artificially understated utility "price to compare" and competitive offerings.

NEM participated in the meeting as well. NEM refuted the claims made about high complaint rates, noting that 5,000 complaints received out of five million customers in Texas is an exceedingly low complaint rate and should be seen as a virtue. NEM stated that Commissions were founded to protect consumers against utility monopoly market power. NEM explained that the problems cited by the consumer groups are caused by a fundamental flaw in the market model - allowing a monopoly to compete in a competitive market with non-monopoly functions. NEM also stated its policy for zero tolerance for fraudulent practices. NEM expressed its support for Draft A in the proposed rules package because it provides for all consumers to be eligible to shop, requires competitively-provided POLR, and incorporates best practices from Texas and Pennsylvania. In response to NEM's presentation, Commissioner Olson asked about utility default provider's ability to shift competitive costs to transmission and distribution rates and charge a wholesale rate at no markup. Commissioner Olson pointed out the portion of NEM's filed comments on utility rate unbundling. Commissioner Olson also asked if NEM was aware of the practice of some states allowing the standard offer utility to true-up its rates, allowing the utility provider to understate the rate and make it up later, and therefore leading to an apples to oranges comparison.

In response to cautionary remarks from RUCO, Chairman Burns replied that "if you're looking for the perfect model, you're going to have a problem." Burns cited market model examples from other jurisdictions that could be studied and learned from. Commissioner Olson challenged the RUCO speaker to explain its argument against joining an RTO and what authority the Commission is ceding to FERC if the Commission doesn't currently have authority over interstate markets.

Both Commissioners Dunn and Marquez Peterson said they needed additional input and study of the issues. Citing Staff workload and resource constraints and incomplete information, Staff said the Commission should proceed with caution on retail competition.

Commissioner Olson said he thought the threshold question to resolve is whether to proceed with retail competition. They need to figure out what questions are remaining with the Commissioners that would need to be addressed in order to decide that question. Commissioner Olson said he has reached that point. After answering that question, technical issues could be explored. Commissioner Dunn suggested that Commissioners could convene roundtables or workshops on issues requiring more input so as not to overwhelm Staff resources. Subsequent to the workshop, Commissioner Kennedy filed a letter to the docket on convening a workshop on Community Choice Aggregation on issues to "include enabling legislation/regulation, creation and procurement best practices, and equity impacts of CCAs on rural, low-income communities, and communities of color."

The full texts of NEM's Presentation and Comments and Commissioner Kennedy's Letter Filing are available on the NEM Website.

New York
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NYPSC Staff Meeting on ESCO Financial Assurance Requirement

NYPSC Staff convened a meeting this week on entry level and ongoing financial assurance requirements for ESCOs as anticipated in the Commission’s December 2019 Order. Staff will be filing a report with its recommendations to the Commission on April 10th, subject to stakeholder comment.

NEM was in attendance at the meeting. Contrary to NEM’s recommendation that only the variable price offer product should be considered in assessing the ESCO financial assurance requirement, Staff argued it should also be applied to an ESCO’s offering of a fixed rate product and a renewable variable price product (which would relate to an ESCO’s failure to purchase the required RECs). NEM explained its approach to computing financial assurance related to a variable rate product. Meeting participants appeared to be favorable to this approach, but Staff requested informal stakeholder input on determining the amount of financial assurance required for the other two products within the next two weeks.

Meeting participants reviewed financial assurance requirements imposed in other jurisdictions. Meeting participants also considered the form of financial assurance, with extensive discussion related to the acceptance of surety bonds and cash, among other forms. The entity that holds the financial assurance was also explored, with parties largely agreeing that should be the role of the Commission, not the utilities.

Click here to view all past updates.
Commission Adopts Amendments to Electric Customer Information Disclosure Regulations

The Commission issued an Order adopting amendments to the electric customer disclosure regulations. The rulemaking on these changes was initiated in 2017.

Changes adopted by the Commission include:
1) Institution of an early termination fee ban period running from the date that the second options notice is sent to the customer. The second options notice is issued no later than thirty days prior to the expiration of the contract.
2) Generation charges must be disclosed according to actual prices per kilowatt hour if the customer will be billed under a price per kilowatt hour price structure. If not, the contract's terms must clearly explain the pricing structure and what the customer's price for generation charges will be for a given period of time.
3) Generation charges must include an estimate of all applicable taxes, except state sales and county tax.
4) Variable price product disclosures were changed to require disclosure of factors that a supplier will rely on to establish the variable price.
5) If a customer is not going to know its price until the time of billing, that must be disclosed to the customer and in a larger font size to increase its prominence.
5) For fixed monthly price products, suppliers must make a tabular disclosure of the average price per kwh for usages of 500, 1,000 and 2,000 kwh. For products for which the price varies based on when the customer uses electricity, suppliers must disclose the price per kwh for each time period in a tabular format.
6) Unnecessary references to the utility were removed from the EGS disclosure statement.
7) An explanation on price variability, penalties, fees or exceptions in the disclosure statement should at a minimum appear in twelve point font.
8) Disclosure statements for fixed duration contracts must include the following notification: "If you have a fixed duration contract that will be ending, or whenever *EGS name* wants to change the contract, you will receive two separate notices before the contract ends or the changes happen. You will receive the first notice 45-60 days before, and the second notice 30 days before the expiration date or the date the change become effective. These notices will explain your options.
9) Disclosure statements for non-fixed-duration contracts must include the following notification: "If *EGS name* wants to change the contract, you will receive two separate notices before the changes happen. You will receive the first notice 45-60 days before the change, and the second notice 30 days before the change. These notices will explain your options."
10) A supplier must disclose to a customer if its contract is assignable. Prior to assignment, customers must be provided notice, including the month and year the assignment can be expected.
11) The contract summary template is updated to reflect market changes and to bring it into alignment with the natural gas contract summary to the extent possible.

OCMO clarified that the "regulations must still be reviewed by the Independent Regulatory Review Commission (IRRC), the Legislative Standing Committees, the Office of Attorney General, and the Governor’s Budget Office. The final regulations shall then become effective 60 days after publication in the Pennsylvania Bulletin."

The full text of the Final Rulemaking Order is available on the NEM Website.

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