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April 21, 2006
NEM Annual Membership Meeting and National Energy Restructuring Conference

Please mark your calendars for NEM's Annual Membership Meeting and National Restructuring Conference on April 25-26, 2006, in Washington, DC at the Marriott Metro Center focused on "Adding Value and Winning Customers with Innovation, Technology and Service." To view the agenda, use the following hotlink: http://www.energymarketers.com/agenda/2006/April/April2006.htm

We have already confirmed the following to attend: U.S. Congressman Ralph Hall, Chair, House Energy and Air Quality Subcommittee, U.S. Congressman Tim Murphy, Member, House Energy Committee, Nora Brownell, Commissioner, FERC, Stan Wise, Chair, Georgia Public Service Commission, Alan Schriber, Chair, Public Utilities Commission of Ohio, James Cawley, Vice Chair, Pennsylvania Public Utility Commission, Monica Martinez, Commissioner, Michigan Public Service Commission, Kevin Wright, Commissioner, Illinois Commerce Commission, Ron Cerniglia, Director, NYPSC's Office of Retail Market Development and Calvin Timmerman, Senior Commission Advisor, Maryland Public Service Commission, and John McMahon, President & CEO, Orange and Rockland.

In addition, we will conduct new Mission Critical Workshops. These will include "How to Deal with the Media When they Knock on Your During Price Spikes - Crisis Communications Workshop for Energy Marketers" conducted by Rasky Baerlein Strategic Communications. An additional workshop will focus on "New Market Entry 101 - Significant Compliance, Reporting and Certification Requirements and Political, Legal and Regulatory Framework for Entering New Retail Markets (MI, MD, NY, OH)" to be led by John Dempsey of Dickinson Wright, Joelle Ogg of Brunenkant & Cross, Steven Sherman of Krieg DeVault and Lisa Bradley of Hiscock & Barclay. Another workshop will examine "Expanding Market Share and Winning New Customers with Innovation and Technology."

EIA Issues Annual Report on Natural Gas Residential Choice Programs

EIA released its annual report on Natural Gas Residential Choice Programs. The Report reveals that 3.9 million (11%) of the 34 million residential gas customers eligible for choice received service from a competitive supplier in 2005. This is 107,900 fewer choice customers than the previous year. Migration is highest in Georgia (1.4 million customers), where Atlanta Gas Light has exited the merchant function, and in Ohio (1.1 million customers). New York's adoption of the PowerSwitch program is among the factors contributing to increased migration levels in 2005. Other notable developments include the extension of pilot programs in Kentucky and Indiana and the Nebraska Commission's commencement of a proceeding to investigate terms of a choice program at Kinder Morgan. The full text of EIA's Report on Natural Gas Residential Choice Programs is available on the NEM Website.

NYPSC, PAPUC Complaint Against NFG

On April 7, 2006, the New York Public Service Commission, the Pennsylvania Public Utility Commission and the Pennsylvania Office of Consumer Advocate filed a Complaint against National Fuel Gas Supply Corporation (NFG) that: 1) alleged that NFG’s existing rates are unjust and unreasonable and requested the Commission to determine and set the just and reasonable rates that NFG shall be permitted to charge prospectively; 2) alleged that the amount of gas that NFG retains from shippers for transportation and storage compressor fuel, losses and company use gas is excessive and requested the Commission to fix the Company’s fuel and loss retention at a just and reasonable level; and 3) requested a Commission determination as to whether NFG had authority under its tariff to make significant sales of gas retained from shippers for fuel and loss, and, if the Commission concludes that NFG did not possess such authority, requested that the Commission direct NFG to show cause why the it should not be required to disgorge the profits associated with such unauthorized sales. Interventions are due April 27, 2006. NEM will be intervening. Members interested in participating in this case should contact headquarters. The full text of the Complaint is available on the NEM Website.

New York
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Central Hudson Rate Proposal Filed

An electric and natural gas rate proposal has been filed for Central Hudson. The term of the proposal is three years to commence July 1, 2006, and end June 30, 2009. The proposal provides for the implementation of a new gas balancing approach to be effective April 1, 2007, for interruptible, firm transportation and aggregated transportation customers. The proposal provides for the continuation of the Market Match, Market Expo and ESCO ombudsman and the conduct of Energy Fairs.

Current electric and natural gas backout credits will remain in effect through June 30, 2007. On July 1, 2007, they will replaced by Merchant Function Charges (MFCs). The MFCs will be divided into two tiers, MFC-A and MFC-B. MFC-A is to include "the allocated portion of credit and collection function costs and 50% of procurement-related call center function costs, plus A&G and rate base items associated with each of the above." MFC-B is to include "commodity purchasing function costs, allocated portions of advertising & promotions function costs and 50% of procurement-related call center function costs, plus A&G and rate base items associated with each of the above." Central Hudson's full service customers will be billed for MFC-T, the sum of MFC-A and MFC-B. Choice customers that choose to purchase their commodity service from an ESCO that is participating in the Purchase of Receivables (POR) Program will be billed by Central Hudson for MFC-A only. "The discount rate charged ESCOs that participate in Central Hudson's POR Program will be the same for all service classifications and will consist of an amount reflecting commodity-related uncollectibles costs and a time value of money factor of 0.25%." Customers that choose to purchase their commodity service from an ESCO that is not participating in the POR Program will not be billed a MFC by Central Hudson. The full texts of the Joint Proposal, Appendix C (Electric Rates) and Appendix F (Natural Gas Rates) are available on the NEM Website.

Pennsylvania
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Commission Approves Pike County Retail Aggregation Program

The Commission approved a retail aggregation bidding program for Pike County. An auction will be held next week to determine who will administer the program. Participating bidders must demonstrate the capability to serve residential consumers by indicating adequate staffing at service centers to field questions from residential consumers. After reviewing the bids, the Commission may name a winning Electric Generation Supplier (EGS) on April 28.

The program will be conducted on an opt-out basis - all Pike County customers will be automatically enrolled with the winning EGS. Consumers can opt-out at any time. Consumers will start receiving service from the winning EGS in the beginning of June. The full text of the Order will be posted on the NEM Website when made available electronically.

Natural Gas Stakeholders Customer Interface Subgroup Meeting

Staff has scheduled the next meeting of the Natural Gas Stakeholders Customer Interface Sub-Group. The meeting will be May 8, 2006, at 1:30PM in the Executive Chambers, 3rd floor of the Commonwealth Keystone Building in Harrisburg. An agenda and teleconferencing information will be forthcoming.



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