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May 9, 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.

PJM Analysis of January 2014 Cold Weather Events

PJM released a report entitled, "Analysis of Operational Events and Market Impacts During the January 2014 Cold Weather Events," which, in addition to analyzing the wholesale market impacts of winter 2014, discusses lessons learned and recommendations for future action.

Regarding the second extreme weather system in late January and resultant wholesale market impacts, PJM explained, "scheduling constraints in natural gas markets – combined with frigid weather across the region, very high power demand and the lack of alignment between natural gas and wholesale electricity markets – created extreme difficulty in scheduling natural gas-fired generation to meet demand.

Natural gas scheduling problems were the key contributor to operational challenges – and high operating reserve costs – during this second period of cold weather. For example, to ensure that gas would be delivered to some generators during the few hours per day they needed to be in service, generators were required to schedule gas deliveries and operate for a full day at extremely high prices – even if less expensive power was available. Natural gas scheduling issues caused most of the $597 million in out-of-market make-whole (uplift) charges for January 2014."

Based upon lessons learned from winter 2014, PJM identified the following areas for improvement:
"* Improve generator availability and performance during extreme weather events,
* Implement performance verification or testing of generation in advance of winter operations,
* Continue to engage in discussions with industry and regulators to improve natural gas and electricity market alignment,
* Implement market mechanisms that encourage better generator availability, such as incentives for ensuring fuel availability or dual-fuel capability, and
* Review the cost allocation for uplift charges and investigate a mechanism to allocate uplift costs during emergency operations that minimizes volatility."

The full text of the PJM Report is available on the NEM Website.

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Commission Initiates Consumer Protection Proceeding

Pursuant to legislation passed earlier this year, the Commission has opened a proceeding to review the current status of consumer protections for electric and natural gas customers receiving competitive supply. The Commission is required to submit a report to the General Assembly by January 1, 2015, on the status of its efforts to provide appropriate protections for consumers receiving competitive electric and natural gas supply. The Commission will also convene a Retail Energy Supplier Consumer Protection Work Group to advise it on information to include in the report. As an initial step in the proceeding the Commission seeks to gather information on supplier marketing, advertising and trade practices and has issued a data request to each licensed supplier on these issues that is due by June 2, 2014. The supplier data request is as follows:

"1. Provide the current contact information, including the name, title, phone number, and email address, for the appropriate company representative who could address and questions related to information provided in response to this data request.
2. Provide the current number, as of April 30, 2014, of Maryland customers according to utility service territory, customer sector (i.e. residential, commercial, industrial, or other), and type of service offering (e.g. variable, six-month fixed, twelve-month fixed, etc.).
3. Describe the types of service offerings in Maryland, and the types of contracts offered for Maryland customers since January, 2013, broken down according to utility service territory and customer sector.
4. Provide the range of variable rates charged to Maryland customers by month since January, 2013, broken down according to utility service territory and customer sector.
5. Provide the Maryland revenues by month since January, 2013, broken down according to utility service territory and customer sector.
6. Provide a description of the customer’s cancellation process for each type of service offered by the company, as it is explained and provided to the customer at the time of solicitation.
7. Does the company have a customer call center to handle customer disputes, questions, or cancellation requests? Is the customer call center staffed internally or out-sourced? How many full-time employees are dedicated to the customer call center? What are the business hours of the call center and what type of customer call volume is the center equipped to handle in a typical business day?
8. Has the company ever during the course of its Maryland operations, or does the company currently, charge termination fees for any of its service offerings? If so, please provide information about termination fees for the various types of service offerings and the dates during which these fees were effective. If applicable, provide the revenue realized from any termination fees since January, 2013.
9. Include the full range and average number of calendar days by month since December 2013 that it took the company to return the customer to Standard Offer Service or Sales Service after receiving notification of the customer’s intent to cancel service from the supplier, broken down according to utility service territory and customer sector.
10. Provide the approximate breakdown of the company’s reliance on door-to-door marketing, telephone solicitations, direct mail, “friends and family”, or other methods (please describe) to solicit new customers. Provide a description of all methods used by the company since January, 2013 to market services or to form contracts with customers in Maryland. Include in this description the method of verification of the sale. If a third party verification method is utilized, provide the name of the company used to perform the TPV.
11. Does the company use a third party or parties to market, advertise, solicit, or otherwise facilitate the sale of electricity or natural gas supply services? If so, provide the name(s) of the third party(ies) and a brief description of the third party’s role in the company’s supply of retail services to a customer.
12. Does the company have a script for its customer service representatives to respond to variable rate and higher-than-normal bill calls for assistance or questions? If so, provide a copy to the Commission and include a copy of any written form of letters, brochures, or other correspondence used in response to such calls. Include any information shared or distributed through social media platforms.
13. Does the company discount or otherwise reduce the price of the service for an introductory period as a sales incentive? If so, describe the length of the introductory period, and how setting the price for the introductory period differs from that of later months.
14. Describe how the company informs customers of the nature of variable rate contracts and the methodology of setting variable rate prices, and include any relevant materials depicting this description as shared with customers.
15. Does the company have an internal compliance department? Provide the number of full time equivalent (FTE) employees in such department. Describe the company’s customer dispute resolution process, including information pertaining to who (by title description) in the company is responsible for each compliance task. Provide information and dates for any changes to the compliance personnel or process since January, 2013.
16. Does the Company include in its third party verification (TPV) call a confirmation that the company representative ensured that the customer understands the methodology of a variable rate contract, if applicable? Provide examples of this recording and TPV script used prior to issuance of this Order."

The full text of the Notice Convening Public Conference is available on the NEM Website.

New York
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Technical Conference on Winter Energy Pricing and Supply

The Commission will convene a technical conference on winter energy pricing and supply on May 15, 2014, beginning at 9am in the Commission's Albany offices. The purpose of the conference is to examine how extreme weather conditions resulted in tight energy supplies and led to gas and electric price spikes. Commission Staff and industry experts will discuss, "New York and regional energy pricing and supply (including fuel adequacy), electricity and gas prices, and the roles of utilities and energy services companies relative to energy supply and price hedging." Subsequent to the conference, there will be a thirty day comment period on matters discussed at the conference. The full text of the Notice of Technical Conference is available on the NEM Website.

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