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May 23, 2008
NEM Summer Executive Committee Meeting

Proliance and their law firm, Krieg Devault LLP, have generously offered to host our Summer Executive Committee Meeting and Policy Leadership Elections on July 29 and 30, 2008 in downtown Indianapolis, Indiana.

NEM has a courtesy room block until July 5, 2008, at the Embassy Suites at a discounted rate of $139/night. You must make your reservations by dialing them directly at (317) 236-1923 at your earliest convenience as they will release the rooms after the July 5 date, and the costs may increase. The location of the hotel is 110 West Washington Street in downtown Indy, 3 blocks from the meeting place.

There is no charge to attend this meeting. Please help us thank John Talley, President, and Kyle Hupfer, General Counsel, of Proliance as well as Steve Sherman, Proliance's outside counsel and founding member of NEM for their generosity in hosting this meeting.

The Meeting will start between 9 and 10AM on Tuesday morning, July 29th, and adjourn before noon on Wednesday, July 30, 2008. An agenda and draft leadership nominations will be circulated, and each member is requested to forward nominations for policy leadership positions as well as issues that NEM must address and prioritize for the coming year.

The Summer Executive Committee Meeting is where the Executive Committee members agree on mid course corrections on the priorities for NEM advocacy for the remainder of 2008 and members who wish to sponsor upcoming events give us an indication so we may start planning the meetings and events for the remainder of 2008 and 2009.

If you have questions or would like to help plan or co-sponsor an event for the members, please contact headquarters. The upcoming meeting should be very substantive, and your participation is encouraged and would be appreciated.

Job Posting

Colorado Springs Utilities is seeking an Instrumentation and Controls Technician (IE&C Specialist Sr.) to assist in meeting the Preventative and Predictive maintenance needs at Nixon Power Plant. This includes installing, calibrating, maintaining, testing, troubleshooting, tuning and repairing electronic, hydraulic, electro-mechanical, mechanical, telemetry, communications, and control systems and components associated with a coal fired steam power plant, gas fired combustion turbine and water treatment facility. Use this hotlink for an application. Further details on the position can be obtained from headquarters.

D.C. Metro Sales Opportunity

Member opportunity to serve a commercial customer located in the D.C. metro area, with approximately $20,000 in monthly bills. Please contact headquarters for further details.

FERC Review of Wholesale Electric Markets

FERC announced a conference to undertake a review of the current and future state of the wholesale electric markets. Participants will include senior management and market monitors from the RTOs/ISOs. Staff will give an overview of wholesale electric markets outside of RTOs/ISOs. The conference will be held July 1, 2008, from 9:30AM to 4PM. A detailed conference notice is forthcoming. The full text of the Notice of Conference is available on the NEM Website.

FERC Staff Form 552 Follow-Up Conference

Earlier this week, FERC Staff convened a follow-up conference on Form 552 on wholesale gas reporting. Staff further clarified its recommended approach, subject to the disclaimer that Staff's positions are not binding on the Commission. Procedurally, Staff again noted that it may be appropriate for FERC to extend the commencement date of Form 552 reporting given outstanding rehearing petitions etc. Staff also suggested that a pilot reporting project may be appropriate in the interim.

On the subject of reporting NYMEX plus transactions, Staff further clarified its position from the previous conference. Staff indicated that the relevant inquiry for reporting purposes is whether the transaction can "contribute to" an index during bid week. If, for example, NYMEX plus transactions are executed in the middle of the month outside of bid week they would not be reportable (because they would not contribute to an index). The theme of reportable transactions that "contribute to" an index was repeated throughout Staff's presentation.

An issue raised at the previous conference was Staff's contention that large end-users purchases did not fall within the retail reporting exemption. Staff noted inconsistencies in language in Order 704 and the rule language. However, for these transactions to be reportable they would have to meet the de minimis criteria and the "contribute to" a price index criteria. This Staff interpretation was questioned by many of the conference participants who interpreted the Commission Order to exclude reporting these end user transactions. Staff noted that (assuming this was addressed in the rehearing order) if the Commission changed its decision, there would be another opportunity for rehearing.

Staff suggested that utility cash outs to retail choice providers could be reportable, but this would be informed by whether the transaction "contributed to" a price index. The full text of Staff's Presentation is available on the NEM Website.

NERC Revises Plan to Register Retail Marketers as LSEs

NERC filed a status report with FERC pertaining to its previous proposal to require retail marketers to be registered with it as LSEs and be responsible for applicable reliability standards in order to address a perceived "reliability gap." NERC noted that as a result of its comment process, it has proposed a new approach by which Distribution Providers to whose system the electric loads in retail choice areas are connected would be required to be registered as the LSE for all loads connected to its system for the purpose of compliance with NERC's reliability standards applicable to LSEs. Comments on this proposal are due to NERC by May 30, 2008. The full text of NERC's Status Report is available on the NEM Website.

Vectren Ohio Seeks Waivers In Support of Merhcant Function Exit

In support of its planned transitional exit of the gas merchant function, and to enhance its retail unbundling and open access program, Vectren Ohio has filed a petition with FERC requesting waiver of certain regulations and policy. Vectren is requesting a waiver of FERC's notification and bidding requirements to permit it to consummate short-term, pre-arranged capacity release transactions with gas suppliers/asset managers participating in its auction program. Vectren has also asked for waiver of FERC policy disfavoring broad authorizations that allow shippers to link storage capacity releases to extraneous conditions, like taking gas inventory, in all situations. Vectren suggests the policy not apply to the limited situation in which the initial transfer of storage inventory volumes to gas suppliers/asset managers step into the utility's shoes as part of its retail access program. The full text of Vectren's Petition is available on the NEM Website.

New York
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NEM Reply Comments on Marketing Standards Rulemaking

NEM filed reply comments in the Commission's inquiry into marketing standards and their incorporation into the UBP. In NEM's reply comments it was suggested that: 1) overly prescriptive disclosure format requirements will inhibit market innovation; 2) the proposal that sales force/contractor training materials be submitted to the Commission could be impossible to comply with; 3) early termination fees serve a valid purpose in the retail marketplace; 4)ESCOs must be given adequate notice of prohibited behaviors and compliance penalties; 5) the scope of oversight of the UBP marketing principles should be limited to the Commission; 6) customers seeking to return to full utility service should continue to be required to contact their ESCO about their decision; and 7) marketing standards should be implemented on a prospective basis that permits timely ESCO compliance. The full text of NEM's Reply Comments is available on the NEM Website.

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Gas Stakeholder Report

The Commission was required by law to determine, "whether effective competition for natural gas supply services exists on the natural gas distribution companies' systems in this Commonwealth." Upon its review, the Commission concluded that there is not effective competition in the retail natural gas supply market at this time. The Commission submitted a report to the General Assembly making this finding and recommending that it convene stakeholders to examine measures, including legislative, to increase competition in Pennsylvania’s retail natural gas supply service market. The stakeholder process commenced in Spring 2006. A report generated as a result of the stakeholder process has been filed with the Commission. The report covers twenty-five issues impacting competition and possible resolutions. These issues include: utilities exit from the merchant function, price to compare, rate unbundling, off-system sales and capacity release, standardization of utility system operations, POR, creditworthiness requirements, operational rules, seamless moves, marketer referral programs, and Commission and utility choice ombudsmen. The full text of the Report is available on the NEM Website.

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