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March 18, 2011
NEM Annual Meeting

NEM's 14th Annual Conference will be held April 25-27, 2011, at the Embassy Suites Hotel, Washington DC Convention Center. An outstanding group of Public Officials have already confirmed for this event. The Agenda is available at this hotlink. You may register at this hotlink.

Order on Demand Response Compensation

The Commission adopted a final rule on the compensation of demand response resources in wholesale electric markets. The Commission decided, "that when a demand response resource participating in an organized wholesale energy market administered by an RTO or ISO has the capability to balance supply and demand as an alternative to a generation resource and when dispatch of that demand response resource is cost-effective as determined by the net benefits test described herein, that demand response resource must be compensated for the service it provides to the energy market at the market price for energy, referred to as the locational marginal price (LMP)." The Commission found that this method of DR compensation would result in just and reasonable rates in the wholesale energy markets. RTO/ISO tariff changes required to implement the rule must be made by July 22, 2011. The full text of the Order is available on the NEM Website.

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Order on Guidelines for Marketing and Sales Practices for Electric Suppliers and Aggregators

The Department issued an Order setting forth Guidelines for Marketing and Sales Practices for Electric Suppliers and Aggregators. The Guidelines are applicable to service to customers with monthly demand of less than 50kw. The Guidelines pertain to training and monitoring, promotional and marketing materials, customer enrollments, and sales and marketing practices. The Department noted that it, "is mindful that the Legislature may wish to consider a Code of Conduct for Suppliers and Aggregators during the 2011 Legislative Session. Therefore, during the pendency of the 2011 Legislative Session, the Department strongly urges all Suppliers and Aggregators to voluntarily comply with the intent and sprit of the Guidelines. At the conclusion of the 2011 session, the Department will promulgate regulations, if necessary, to adopt these Guidelines as modified or revised to conform with any laws enacted by the General Assembly."

The Order affirms previous Department decisions that aggregators are agents of customers and cannot represent suppliers in any capacity. With respect to the referral program, the Department concluded that it, "has achieved the Legislature’s goal of educating customers about the opportunity to choose a Supplier, fostering the growth of a competitive market. The Department finds that the Amended Referral Program has outlived its usefulness, and at this point, adds customer confusion and unnecessary operating expenses to the EDCs. The Department will ask the Legislature for guidance on possible modification of the statute to reflect the evolution of the marketplace." The Department also decided that suppliers must now post all residential and business offers (except negotiated rates) on the Department Rate Board. Suppliers may offer customers direct billing, choose not to offer direct billing, or offer both options. A stakeholder Working Group is to be formed for the purpose of collaboratively addressing market issues.

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

New York
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Comments Sought on Draft Scope for the 2013 New York State Energy Plan

Comments have been requested on the Draft Scope of the 2013 State Energy Plan. The State Energy Plan is intended to provide policy direction pertaining to energy-related decisionmaking in the public and private sectors in the State. Topics identified for inclusion in the Draft Scope include: overview of state energy systems; meeting state energy needs and goals with energy efficiency and renewable resources; meeting state energy needs and goals for electricity, natural gas, petroleum, coal, nuclear, other and alternate energy sources; growing the state's clean energy economy; climate change and environmental impacts; investing in resilient energy infrastructure, an efficient transportation system and smart growth; health and environmental justice; and local, regional and federal action and collaboration. Comments may address any aspect of the Draft Scope including how to conduct the technical and policy analyses described, as well as any additional issues that should be addressed. Comments are due April 29, 2011. The full text of the Draft Scope for the 2013 New York State Energy Plan is available on the NEM Website.

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Order on Municipal Aggregation

The Commission issued a declaratory Order to answer the questions of whether municipal aggregation programs can be authorized under the Public Utility Code, and if so, whether the Commission should authorize municipal aggregation programs at this time. The scope of issues addressed in the Order was limited to a review to the authority of electric suppliers and utilities to participate in municipal aggregation programs. The Commission found that opt-out municipal aggregation programs violate the Pennsylvania Public Utility Code and Commission regulations that prohibit consumer slamming. The Commission stated that, "EGSs and EDCs are clearly subject to Commission oversight and regulations, including customer switching (anti-slamming) protections. Contracting with a home rule municipality to provide electric generation supply services to municipal residents does not exempt an EGS from Commission oversight and the requirements of the Public Utility Code and the Commission’s Regulations." The Commission further reasoned that, "Given the anti-slamming provisions in the Public Utility Code, opt-out aggregation programs should be authorized only in unique circumstances where it is clearly in the public interest to do so, such as in Pike County. In Pike County, the consumers of a single, small EDC were facing default service rate increases of over 70% and had no shopping options. In comparison, all, or nearly all, residential customers in Pennsylvania currently have multiple competitive offers or reasonably-priced default service options or both; therefore the unique and exigent circumstances that led to the Commission’s approval of an aggregation program in Pike County do not currently exist." The full text of the Order is available on the NEM Website.

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