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June 19, 2009
Upcoming NEM Conference Calls

Please mark your calendars for the following upcoming NEM conference calls:

P.R. and messaging - Tuesday, June 23, 2009, at 2PM EST

Biweekly membership and consumer advisory council call - Thursday, June 25, 2009, at 11AM EST

Smart grid policy committee - Wednesday, July 1, 2009, at 11AM EST

CFO Forum - Tuesday, July 7, 2009, at 2PM EST

Please use dial-in 913-643-5111 and passcode 209353. Agendas for each call will be mailed separately.

Report on Demand Response

FERC Staff released, "A National Assessment of Demand Response Potential" as required by the Energy Independence and Security Act of 2007. The report evaluates nationwide demand response potential in five and ten year horizons and provides estimates of demand response potential for each of the states. It is estimated that peak demand without any demand response would reach 810 gigawatts in 2009 and 950 gigawatts by 2019. Under the scenario of the highest level of demand response, the report finds that 2019 peak load could be reduced by as much as 150 gigawatts, equivalent to the output of 2,000 power plants.

The report also identifies barriers to demand response. These include regulatory barriers (lack of connection between wholesale and retail prices, measurement and verification challenges, lack of real time information sharing, ineffective program design, and disagreement on cost-effective analysis of demand response); technological barriers (lack of advanced metering infrastructure, high cost of enabling technologies, lack of interoperability and open standards); and other barriers such as lack of customer awareness and education and environmental impact concerns. The full text of the Demand Response Report is available on the NEM Website.

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MichCon Gas Rate Case

Michcon has filed a gas rate case requesting an increase in distributon rates, premised on MichCon's argued, "need for additional annual revenue effective January 1, 2010 of approximately $193 million." Petitions to intervene are due July 7, 2009. A prehearing conference in the matter will be held July 14, 2009.

Michcon proposes changes to its transportation and storage rates including: "(1) clarifying and updating certain general provisions, definitions and options for transportation services; (2) clarifying the monthly customer charge description for each of the transportation rate schedules; (3) supporting changes to the applicable months for storage injections under the load balancing storage charge; (4) supporting MichCon’s proposed new XXLT transportation service rate and related terms and conditions; (5) supporting various miscellaneous changes in the terms and conditions under MichCon’s transportation and storage rate schedules; and (6) reflecting the changes in the transportation and storage tariffs that are supported by myself or other witnesses, such as the proposed transportation and storage rate charges and the gas-in-kind fuel percent." MichCon also proposes implementation of a revenue decoupling mechanism that would be applied to all rate classes. The full texts of MichCon's Application and Testimony are available on the NEM Website.

New York
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Order on Implementation of 18-a Assessment

The Commission issued an order adopting a methodology for implementing the temporary 18-a assessment, to include an estimate of ESCO revenues. As was urged by NEM and its members, the Commission decided that, "estimating ESCO commodity revenues based on each utility's average commodity price provides the most practical, expedient, and reasonable methodology to determine the Temporary State Assessment." The Commission expressed a preference for the collection of assessment as a separate line item surcharge on the utility bill. However, utilities may recover the charge through a delivery rate adjustment if the costs of establishing a line item surcharge are prohibitive. The Commission authorized the utilities to seek annual reconciliations of actual costs associated with the temporary assessment. The full text of the Order is available on the NEM Website.

NFG Austerity Plan Includes Request to Provide Fixed Price Option

In response to a Commission request for utilities to file austerity plans, NFG submitted a report detailing its plan to issue customer bill credits in the amount of approximately $6.2 million. NFG suggests this be accomplished, "through either existing bill mechanisms or a 'one-time' bill credit." NFG also suggests that customers should be provided with a utility fixed price option in addition to the bill credits. In its filing, NFG, "proposes to offer a FPO again on a limited basis in order to provide customers with the ability to 'lock in' to lower gas costs, if they remain available, for a fixed period of time. The FPO could be designed generally in accordance with the requirements contained in the Commission's 1997 Order [on gas utility FPOs]. The Company recognizes and agrees that the purpose of a FPO is to ameliorate volatility and not necessarily to produce savings. However, an FPO is nonetheless a proven sales item that should be made available as another means of enabling customers to gain greater control over household costs." The full text of NFG's Filing is available on the NEM Website.

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Commission Approves PPL Default Service Settlement Plan

The Commission approved a settlement of PPL's default service implementation plan. The settlement provides that its RFP procurement process will be administered by an independent third party manager and provides separate procurement processes for residential, small C&I and large C&I groups. The settlement provides that PPL will file a revised voluntary POR plan in its next distribution rate case, including the unbundling of uncollectibles. The utility will make a one-time mailing by June 2010 to update customer information release preferences. It will also convene a customer collaborative to examine residential, smal commercial and industrial direct mail referral programs as well as a collaborative to examine a residential aggregation program. The results of the collaboratives will be considered in PPL's next default service proceeding. The full text of the Settlement is available on the NEM Website.

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