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March 20, 2009
NEM's 12th Annual Global Energy Forum & Membership Meeting

NEM's 12th Annual Global Energy Forum & Membership Meeting will be held April 28 & 29, 2009. The meeting will be held at the Embassy Suites Washington D.C. - Convention Center located at 900 10th Street, NW, Washington, DC. The early-bird registration rates for members and non-members end on February 28, 2009. Please register at this hotlink. A block of rooms has been reserved for NEM members at the rate of $279 per night. Contact (202) 739-2001 for reservations and reference group code A-MN.

A number of U.S. and foreign officials have already confirmed their participation in the event. Those confirmed thus far include: James Clyburn, U.S. House Majority Whip; Marsha Blackburn, U.S. Congressman, House Energy and Commerce Committee; Gene Green, U.S. Congressman, House Energy and Commerce Committee; H.E. John Bruton, European Commission Ambassador; H.E. Andrejs Pildegovics, Latvian Ambassador; Aleksei Shishayev, Russian Embassy - Head of Economic Section; Marc Spitzer, FERC Commissioner; Philip Moeller, FERC Commissioner; Garry Brown, NYPSC Chairman; James Cawley, PAPUC Chairman; Alan Schriber, Ohio PUC Chairman; Orjiakor Isiogu, MIPSC Chairman; Donna Nelson, TX PUC Commissioner, Robert Curry, NYPSC Commissioner; Stan Wise, GAPSC Commissioner; Nicholas Asselta, NJBPU Commissioner; Erin O'Connell-Diaz, Illinois Commerce Commissioner; Steven Transeth, MIPSC Commissioner; James Kendall, EIA Natural Gas Division Director; Harris McDowell, Delaware Senate; Eric Matheson, PAPUC Energy Advisor; Calvin Timmerman, MDPSC Assistant Executive Director; and Chris Hendrix, General Manager, Competitive Energy - Wal-Mart Stores, Inc. The full text of the April Meeting Agenda is available on the NEM Website.

South Jersey Energy Solutions Joins NEM

NEM is pleased to announce that South Jersey Energy Solutions has joined the Association. South Jersey Energy Solutions (SJES) will be represented within NEM by Michael J. Renna, President; Joseph M. Scheufele, Asst. VP, Business Development; Louis DeCicco, General Manager; and Edward H. Peterson Jr., RCGC Manager Commercial Sales.

South Jersey Energy Solutions (SJES) assists residential, commercial and industrial facilities reduce their overall energy costs. They acquire and market natural gas and electricity to retail end users. They provide comprehensive energy management solutions. They believe that customization is key. Their team tailors energy solutions to your specific needs. SJES works to maximize your long-term savings without sacrificing the quality or reliability you need to get things done.

South Jersey Energy Solutions (SJES) market approach can immediately deliver your energy at the most-competitive rates while minimizing your risk from uncertain, volatile energy prices. Plus, SJES offers energy efficiency improvements with lighting retrofits, HVAC, cogeneration/distributed generation, management controls and asset management possibilities.

FERC Issues Proposed Smart Grid Policy Statement

FERC issued a proposed policy statement and action plan to address Smart Grid Policy. The purpose of the policy statement is to provide industry with priorities for development of key interoperability standards and to provide an interim rate policy by which jurisdictional utilities may seek cost recovery for smart grid deployments before standards are finally adopted through a rulemaking. The four key grid functionalities identified by the Commission are: 1) wide-area situational awareness, 2) demand response, 3) electric storage, and 4) electric transportation.

FERC proposed as an interim rate policy, "to accept single-issue rate filings submitted under FPA Section 205 by public utilities to recover the costs of Smart Grid deployments involving jurisdictional facilities provided that certain showings are made." These showings include: 1) the reliability and security of the bulk power system will not be adversely affected by the deployment; 2) minimization of the possiblity of stranded investment by allowing the ability for system upgrade; and 3) sharing information with DOE's Smart Grid Clearinghouse.

The full text of the Proposed Smart Grid Policy Statement is available on the NEM Website.

Southern Natural Gas Rate Case

Southern Natural Gas (SNG) filed a rate case proposing "an increase of approximately 36% over its currently effective rates." SNG proposes a "market adjustment" to reduce the size of the proposed rate increase. However, the unadjusted firm transportation reservation rates in the proposed tariffs constitute SNG's filed rates, and the company reserves its right to increase its rates during the course of the rate case proceeding up those unadjusted rates. SNG additionally proposes changes to its Park and Loan service and rate design, its Rate Schedule FT, and general terms and conditions of its tariff. A portion of the SNG Rate Filing is available on the NEM Website.

Click here to view all past updates.
Hedging Required for Gas Utilities

Earlier this year the Commission opened an inquiry as to why the gas utilities summer storage injections in Spring 2009 should not be hedged to reflect current gas futures prices. As a result, the majority of the gas utilities indicated that they did not intend to change their procurement practices in response to current lower natural gas prices. In a subsequent hearing before the Commission, the parties recommended that gas utilities not alter their procurement programs (i.e., gradually purchase gas for injection and storage between April and October) premised on the belief that natural gas prices will continue to decrease over the spring and summer, and therefore, utilities should not be precluded from buying at expected lower prices. Despite this recommendation, the Commission decided to require BGE, Columbia, Chesapeake, WGL and Easton Utilities to, "take the action(s) (other than options) necessary to assure that 40% of its summer natural gas injection volumes, for delivery between April 2009 and October 2009, will reflect pricing that reflects a Henry Hub price of $4.32 or less per mmBTU plus basis cost to deliver gas to [the utility's] delivery point prevailing between the date of this Order and March 31, 2009 and obtain the lowest final cost to ratepayers." The utilities must report back to the Commission by April 15, 2009, as to what actions were taken as well as the price paid, or that will be paid, for the gas and associated transactional costs.

Click here to view all past updates.
MetEd and Penelec Proposed Default Service Plans

MetEd and Penelec filed proposed default service plans for the period of January 1, 2011, through May 31, 2013. The Companies propose different procurement plans for residential, commercial and industrial customers.

For residential customers, multiple 50 MW tranches comprised of a 95% fixed price portion and a 5% variable spot price portion will be procured over the course of ten procurement dates from 2010 to 2012. The residential class will be served with a mix of one-year, two-year and four-year tranche products. The residential rate will be a single kWh-based charge that is adjusted quarterly to reflect changes in supply cost and account for a quarterly rate reconciliation component.

For commercial customers, multiple 50 MW tranches comprised of a 100% fixed priced product will be procured for an initial 5-month delivery term and subsequent 12-month delivery terms. The commercial rate will be a single kWh-based charge that is adjusted quarterly to reflect changes in supply cost and account for a quarterly rate reconciliation adjustment.

Industrial customers will be served under Hourly Pricing Service - the PJM Zonal real-time hourly LMP and the auction clearing price for capacity, AEPS and ancillary services. Procurements for these customers will take place in January 2010, January 2011 and March 2012. The industrial rate will consist of an HP Energy Charge per kWh.

MetEd/Penelec propose to use a descending clock auction for procurement. Alternatively, the companies would use a RFP method. They will also conduct a separate solar RFP to obtain solar credits over a ten-year period.

The companies propose to implement a nonbypassable NUG Rider to collect above-market NUG costs and to credit customers above-market NUG costs on a quarterly basis.

MetEd/Penelec will file proposed default service Supplier Master Agreements, auction and RFP rules, tariff changes and supporting testimony in late March. The full text of the MetEd and Penelec Filing is available on the NEM Website.

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