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May 30, 2014
Upcoming NEM Events

NEM Summer Leadership Roundtable - NEM’s Summer Policy Leadership Roundtable will be held at the University Club in Chicago, IL on August 5-7, 2014. Chairman Doug Scott of the ICC has confirmed his participation and has invited the other Commissioners, key staff, and the Governor’s office to attend. Registration is now available on the NEM website at this hotlink. Please contact Catalina to secure a hotel room at the University Club.

NEM Mid-Atlantic Energy Summit - Please also plan to attend the NEM Mid-Atlantic Energy Summit to be held at The Center Club in Baltimore, MD on October 21-23, 2014. Registration is now available on the NEM website at this hotlink. Hotel Rooms are available at the NEM Rate of $160 at the Embassy Suites Inner Harbor Hotel in Baltimore, MD.

Please contact headquarters if you are interested in sponsoring either of these events.

Click here to view all past updates.
Authority Initiates New Proceeding on Electric Supplier Marketing Practices

The Authority has opened two new proceedings to investigate electric supplier compliance with statutory contract and renewal requirements. Specifically, the Authority will examine: 1) supplier compliance with the written contract requirement for customers with a demand of less than one hundred kilowatts; and 2) supplier compliance with the requirement to provide residential customers with an expiration notice, thirty to sixty days prior to expiration, of a fixed price term. The Authority intends the proceedings to also examine appropriate remedies for customers and penalties for suppliers that failed to comply with the requirements.

New Jersey
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2015 Basic Generation Service Proceeding

The Board has initiated a proceeding to examine how to procure the remaining one-third of the Basic Generation Service Fixed Price (FP) and Commercial & Industrial Energy Pricing (CIEP) requirements for the period beginning June 1, 2015. The electric utilities and other interested parties are to file proposals by July 1, 2014. The Board also adopted a preliminary procedural schedule for the proceeding as follows:

7/1/2014 - Filing of BGS Proposals
7/22/2014 - Discovery Request Deadline
8/5/2014 - Discovery Response Deadline
9/3/2014 - Deadline for Initial Comments on Proposals
TBD - Legislative-Type Hearing
TBD - Public Hearings
10/1/2014 - Deadline for Final Comments
11/2014 - Expected Board Decision on BGS Proposals
November/December - Utilities Compliance Filing
12/2014 - Exepcted Board Decision on Compliance Filing
1/2015 - Rockland RFP for BGS Supply Requirements
2/2015 - Procurement Process for BGS Supply Requirements

The full text of 2015 BGS Proceeding Order is available on the NEM Website.

New York
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Commission Requests Comments on Issues Raised at Winter Price Spike Conference

Following the technical conference convened by the Commission two weeks ago to examine the issues associated with this winter's energy price spikes, the Commission has issued a series of questions for comment.

Of particular importance to the retail energy markets, the Commission raised the following issues:

"5) Some expressed the view that utilities could hedge more than they did last winter and do today to reduce their electric supply portfolio price volatility.
a) If so, should utilities increase the amount of their residential and small commercial and industrial supply customers load that is hedged during the summer and winter months?
b) What criteria should be used to determine the appropriate amount of such hedging?
c) Please comment on the use of physical vs. financial hedges in this context.

6) A concern was expressed that there do not seem to be adequate fixed price options available for consumers to lock in their electric prices and avoid the volatility of prices.
a) Should utilities be required to offer a fixed priced electric supply option to their residential customers and/or to their small non-demand metered commercial and industrial customers?
b) If so, for what duration(s) should the supply prices be fixed?
c) Should these fixed price products be available to customers continuously or only at certain intervals, and what terms and conditions (i.e., early termination charges) should apply to these products?
d) Should energy service companies be required to offer fixed price electric supply products to residential and small customers as a condition for being certified to provide commodity in New York?
e) How might budget billing programs be better used to reduce customer bill volatility?
f) Are there changes to the utilities‟ budget billing programs that might enhance their effectiveness in mitigating customer bill volatility?

7) Remarks by several participants focused on the impact of the winter on natural gas customers.
a) Were adequate quantities of firm gas available to customers for home heating throughout this winter?
b) Should gas utilities increase the amount of their heating supply customers‟ load that is hedged during winter months?
c) What criteria should be used to determine the appropriate amount of such hedging?
d) Should gas utilities be required to offer a fixed priced supply option to gas heating customers?
e) Should energy service companies be required to offer fixed price gas supply products to gas heating as a condition for being certified to provide commodity in New York?

8) Comments were made that customer education should be enhanced so customers understand the reasons for price volatility and options available to address their concerns if they want to reduce price volatility.
a) Should utilities be required to periodically provide explanations of the variability of their commodity prices to help customers make informed decisions about their supply purchase options? How often should this information be provided?"

Additional issues raised for comment include:
* the need to add gas transportation capacity and electric transmission infrastructure and who should bear the costs of these investments;
* how to ensure the adequacy of natural gas and alternate fuels available for dual-fuel generators; and
* whether exports of electricity to New England exacerbated the electric price increases in the NYISO.

The Commission indicated that based on the technical conference and comments received that it may initiate a more detailed inquiry on some or all of these issues. Comments are due June 23, 2014. The full text of the Notice Seeking Comments is available on the NEM Website.

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ANOPR on Automatic Adjustment Clauses for Electric Default Service

The Commission issued an ANOPR on reform of the automatic adjustment clauses for electric default service. Automatic adjustment clauses allow utilities to increase or decrease rates to reflect changes in specific costs, including for example, default service, without having to file a base rate case. The Commission noted that the current utility practice of collecting asymmetrical interest rates for over/under-collections, "create[s] an incentive for the utilities to under project or under collect in order to avoid over collection penalties and to receive an interest rate higher than that which can be found in the market. This practice can lead to an understated price-to-compare (PTC). An understated PTC undermines the competitive marketbecause electric generation suppliers (EGSs) cannot under collect and then make-up that under collection later as can the utilities."

As a result, the Commission is seeking comment on a revision to the automatic adjustment clause mechanism, "to establish a symmetrical rate of interest which will be applicable to over and under collections resulting from the reconciliation of utilities’ costs and revenues resulting from automatic adjustment clauses related to electric default service. The proposed applicable rate of interest on over and under collections would be interest at the prime rate for commercial borrowing in effect on the last day of the month the over or under collection occurred, as reported in the Wall Street Journal or other publically available source identified by the Commission." The Commission further noted that if the symmetrical rate of interest does not serve to prevent the electric utilities from using the automatic adjustment clause for default service to increase interest earnings, that the Commission may consider use of a modified interest rate for excessive portions of over/under collections.

Comments on the ANOPR are due sixty days after publication in the PA Bulletin. The full text of the ANOPR is available on the NEM Website.

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