Chairman Schisler tendered his resignation to Governor O'Malley effective this Friday. In a statement announcing his decision Schisler said, "During my tenure at the Commission I have endeavored to implement the policies enacted by the General Assembly in a fair, impartial and effective manner. My resignation will facilitate the ability of the Public Service Commission to move forward in the important work it must accomplish."

The Baltimore Sun reports that Governor O'Malley will act quickly to name a replacement for the seat, perhaps as early as the end of the week. The Sun noted that potential nominees could include Susanne Brogan, a former Commission member, and Michael J. Travieso, a former People's Counsel.

Governor Granholm had charged the Commission with developing a long-term, comprehensive plan for meeting Michigan's future energy needs. The Commission submitted its "21st Centuty Energy Plan" this week. Based on a projected average load growth of 1.2 percent per year over the next 20 years, and the aging of the existing generation fleet, it was estimated that a new baseload plant would be needed by no later than 2015. The plan recommends that utilities file plans detailing how renewable resources, energy efficiency measures, power available from external markets, and existing traditional generation can meet forecasted demand. To the extent the utility demonstrates a need for a new baseload plant in the plan, the Commission could approve the decision to build the plant by issuing a certificate of need. If the certificate is granted, the utility would seek competitive bids for the construction costs. All customers, including those who participate in energy choice, will be required to bear the expense of such generation.

The plan recommends that all retail electric energy suppliers be required to obtain at least 10 percent of their energy supplies from renewable resources by 2015. Furthermore, consumers participating in energy choice would be required to commit to a twenty-four-month minimum stay with a supplier as well as provide twenty four months notice of their intent to return to utility service. The full text of the 21st Century Energy Plan is available on the NEM Website.

Staff submitted initial testimony in the Keyspan-National Grid case. Staff reviewed Keyspan's cost of service and proposed unbundled rates. The utility proposed an unbundled supply rate of $0.22/dth, consisting of $0.169/dth for uncollectibles and working expenses and $0.049/dth (as a delivery rate backout credit) for gas procurement, collection, and promotional advertising expenses for Keyspan Long Island. The utility proposed an unbundled supply rate of $0.53/dth, consisting of $0.415/dth for uncollectibles and working capital expense and $0.113/dth (as a delivery rate backout credit) for gas procurement, collection, and promotional advertising expenses for Keyspan New York. The utility's proposed billing and payment processing credit is $0.65 per bill for Keypsan LI and $0.76 for Keyspan NY.

Staff proposed modifications to Keyspan's unbundling proposals. These include creation of a merchant function charge (MFC) to be included in the Gas Adjustment Charge (GAC), creation of multiple MFCs to reflect differing cost characteristics of different customer classes, and commodity costs proposed to be in the delivery rate backout credit should be included in the GAC. Staff recommended no changes to the billing credit. Staff did oppose Keyspan's proposal to delay unbundling its bills until after the merger is reviewed. Staff argues that now is the time for Keyspan to submit proposed unbundled bill formats and customer education plans so these features can be implemented as part of the initial installation of a new computing system and not as a incremental project later on.

Staff noted that Keyspan retains 20% of the revenue recovered from capacity releases and off-system sales transactions. Staff recommends that going forward the revenue sharing mechanisms for capacity releases, off-system or packaged sales and any streaming transaction be limited to the 85%/15% level established in prior Commission orders and that transactions currently excluded from revenue sharing continue to be excluded.

Staff also recommends that a stakeholder collaborative be convened to examine and identify necessary changes to Keyspan's transportation and balancing rules and procedures. The full text of Staff's Testimony is available at this hotlink.

The CPB also submitted testimony largely opposing implementation of Keyspan's proposals to implement Retail Policy Statement best practices. The CPB recommends that, "proposals that ratepayers fund customer Outreach and Education programs regarding retail competition and Market Expos, be rejected. Similarly, KEDNY’s [Keyspan NY] proposal to implement an ESCO Referral program should be rejected, as should its proposal that ratepayers fund information technology costs associated with its POR program. The projected costs of that program should be removed from KEDNY’s revenue requirement. We have no objection to KEDNY’s proposed POR program if the Company is able to recover all incremental costs, including information technology costs, from ESCOs, without subsidization or guarantee of recovery by ratepayers. We support KEDLI’s [Keyspan LI] proposal that it not implement a purchase of receivables program at this time." The full text of CPB's Testimony is available from NEM headquarters.

OCC submitted testimony in Columbia's 2004 and 2005 GCR cases recommending changes that would effect the gas choice program. CPB recommends that Columbia be ordered to, "procure the natural gas used to supply its GCR customers through a wholesale auction process similar to the one used for supplying DEO's GCR customers." Although, OCC recommends utilizing a weighted average RFP wholesale auction process rather than the descending clock auction used by DEO. OCC maintains that, "a wholesale auction procurement process would be more transparent than the current GCR process and would establish a more competitive benchmark for residential customers interested in participating in the Choice program, and for Marketers interested in serving those customers."

OCC recommends that the Commission terminate the 2003 Columbia settlement. OCC also recommends a change to Columbia's customer capacity cost allocation methodology that would be based on each customer's actual usage. OCC alleges that, under the current methodology, GCR customers unfairly pay for excess capacity costs. The full text of OCC's Testimony is available on the NEM Website.