SB14 has been introduced in the legislature with provisions pertaining to direct access. In particular, the bill would suspend the right of retail end-use customers to acquire service through a direct transaction until the legislature, by statute, lifts the direct access suspension or otherwise authorizes direct transactions. However, electric retailers may offer service to new customer locations if they already provide service to that customer.

In addition SB14 would: 1) require utilities and energy service providers to increase their purchases of renewable energy such that at least 33% of retail sales are procured from renewable energy resources by December 31, 2020; 2) replace the current residential rate freeze with a index based on an inflation rate; and 3) prohibit mandatory time-of-use rates for residential customers. The full text of SB14 is available on the NEM Website.

This takes place in the context of the current California Public Utilities Commission proceeding to examine lifting the suspension of direct access. The Commission previously adopted measures to expedite the phase-out of the Department of Water Resources (DWR) from its role of supplying electric power to retail customers. As part of Phase II of this proceeding, the Commission this week established a Working Group to develop protocols and strategies for negotiating replacement power contracts to substitute DWR with the utilities. The full text of the Ruling is available at this hotlink.

NYSEG and RGE filed electric and gas delivery rate cases seeking an increase in rates on an expedited basis. The ALJs will convene a procedural conference on February 11, 2009, beginning at 10:30AM in the 19th floor Boardroom of the Commission's Albany offices. The purpose of the conference is identify active parties and discuss scheduling, process and procedural matters.

NYSEG's Rate Case Filing is available at: http://www.nyseg.com/SuppliersAndPartners/pricingandtarrifs/ratefiling2009.html

RGE's Rate Case Filing is available at: http://www.rge.com/SuppliersAndPartners/pricingandtarrifs/ratefiling2009.html

As part of its continued transition from the merchant function, DEO filed proposed Standard Choice Offer (SCO) and Monthly Variable Rate (MVR) tariffs. The Commission previously approved DEO's plan to secure natural gas supplies for Standard Service Offer (SSO) and SCO customers beginning April 1, 2009, through an auction process. SCO service is to be provided by competitive suppliers. The price of SCO service will be determined as a function of NYMEX settlement price plus a Retail Price Adjustment. SCO customers will include those assigned by virtue of an auction process, new customers assigned to a competitive supplier after receiving SSO service for two consecutive billing periods, and customers assigned to a competitive supplier after receiving SSO service for two consecutive billing periods after termination of an opt-out aggregation program, energy choice or opt-in governmental aggregation program. DEO has requested that the Commission approve the tariffs by April 1, 2009. The full text of the DEO Filing is available on the NEM Website.

Staff submitted recommendations to the Commission in the proposed REP certification rulemaking. On the issue of the liquid capital requirement, which was the primary area of NEM's comments, Staff recommends that:

"As an alternative to proposed §25.107(f)(1)(B), Staff recommends that the Commission adopt an initial liquid capital level of $3 million for market entry, which is an amount that Staff believes is sufficient to fund and support the REP until the REP has sufficient revenue to fund its operations and growth internally. After the REP reports revenue from the sale of electricity in excess of $y, the REP's liquid capital requirement would be reduced to $1 million. When combined with the REP's ability to generate revenue, the $1 million liquid capital requirement should be sufficient to provide the liquidity needed to meet changes in market conditions. Additionally, Staff recommends that the Commission allow a REP to fall below the $1 million ongoing reserve requirement upon notice by affidavit to the Commission that the REP has fallen below the requirement. The rule would also provide that if a reduction in the reserve requirement is requested, the REP would not be listed on the Power to Choose website and would not be able to contract for new customers. The REP's affidavit would disclose the event or issue that caused the REP to fall below the requirement, and the REP would not be listed on the Power to Choose website or permitted to contract of new customers until the REP met the reserve requirement. The Commission rule should include an amount of time, perhaps six months, for the REP to rebuild the reserve requirement or begin an orderly exit from the market.

The Commission should consider whether or not liquid capital available from credit arrangements with a wholesale supplier can be used to satisfy the ongoing reserve requirement."

In the original proposal the Commission issued for comment, the initial $3 million requirement would step down to $2 million after 2 years of service and then $1 million after 3 years of service. This matter is on the Commission's meeting agenda for February 10th. The full text of Staff's Recommendations is available from NEM headquarters.