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March 25, 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.

NOI on Horizontal Market Power Review

FERC issued a Notice of Inquiry to request comments as to whether, and if so, how, it should revise its approach for examining horizontal market power concerns in transactions under § 203 of the Federal Power Act (FPA) to reflect the Horizontal Merger Guidelines issued by the Department of Justice and Federal Trade Commission in 2010, and what impact those Guidelines should have, if any, on FERC’s analysis of horizontal market power in its electric market-based rate program under § 205 of the FPA. FERC notes that the 2010 Guidelines put less emphasis on market definition and the use of a prescribed formula for considering the effects of a merger than the 1992 Guidelines. Additionally, the 2010 Guidelines raise the HHI threshold for an unconcentrated market and classify a market where the post-merger HHI is below 1,500 as unconcentrated. FERC requests comment on the appropriateness of adopting these changes for the purposes of its review process. Comments are due sixty days after publication in the Federal Register. The full text of the Notice of Inquiry is available on the NEM Website.

Click here to view all past updates.
Proposed Order on Electric Marketing Standards

The ALJ issued a revised Proposed Order (PO) and proposed regulations on electric marketing standards. The proposed rules adopt a definitions section for applying the marketing standards. Marketers would be required to provide consumers with a Uniform Disclosure Statement. The PO and proposed regulations set forth requirements for door-to-door sales, telemarketing, inbound enrollment calls, direct mail, online marketing, training of sales agents and record retention.

The PO provides that residential customers would have 10 calendar days to rescind a contract from the date the utility processes their enrollment request, and the PO rejected the proposal to provide a three day rescission period.

The PO and proposed regulations address early termination fees in a confusing and possibly contradictory manner. The PO provides that, "We find that a once per 12-month early termination fee waiver is not reasonable under the circumstances. There are many other variables which would cause the amount billed to differ from the amount charged on the contract, some of which cannot be directly attributed to the RES. The Commission will not adopt language that allows the consumer to terminate their contract, at great expense to the remaining consumers in the form of higher costs. We find the opportunity for the consumer to rescind their contract within 10 days of enrollment is already present in Section 412.210. In addition, the parties have not introduced any data to support a finding that capping the early termination fee at $50 is reasonable. Although the parties have alluded to a formula to calculate the early termination fee, no actual calculations were provided for the Commission to consider. Thus, we find the early termination fee should be reasonable given the relative cost to the RES. Finally, we find that full disclosure of the terms and conditions of the contract should be provided to each customer." However the proposed regulation would read as follows: "Any contract agreement that contains an early termination fee shall provide the customer the opportunity to contact the RES to terminate the contract agreement without any termination fee or penalty within 10 business days after the date of the first bill issued to the customer for products or services provided by the RES one time per 12-month period."

The dates for filing exceptions and replies to the Proposed Order are April 8, 2011, and April 18, 2011, respectively. The full texts of the Proposed Order and Proposed Regulations are available on the NEM Website.

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