NEM's Summer Executive Committee and Policy Development Meeting will take place on July 9-10, 2007. The meeting will be hosted by The Goeken Group Corp. and PolyBrite International. The meeting will take place at the Spring Hill Suites Chicago/Naperville and will be followed by a reception and tour at the Goeken Group Corp. headquarters. Many thanks to Jack Goeken, Carl Scianna and Sandra Goeken-Miles for offering to host our meeting. At this meeting, we evaluate our advocacy priorities for the remainder of the year and elect our Executive Committee leadership.

Please contact the Springhill Suites Chicago/Naperville for the preferred NEM accommodation rate at 630-393-0400 (which has been extended for reservations made through July 4th). Please register at this hotlink. The final agenda is available here.

FERC issued an ANOPR on potential reforms to improve the operation of wholesale power markets administered by RTOs/ISOs. The ANOPR is in response to information received in two prior technical conferences and pertains to demand response, long term power contracts, market monitoring units, and responsiveness of RTOs/ISOs. The Commission has outlined its proposals for consideration as follows:

"Demand Response and Pricing During Power Shortages - proposals
1) Require RTOs and ISOs to allow demand resources to provide certain ancillary services in their markets unless not permitted by state law, modify tariffs to let demand resources provide spinning and supplemental reserves without being required to sell into the energy market.
2) Modify RTO and ISO tariffs to eliminate certain charges for purchasing less energy in real time than in the day ahead market during a system emergency.
3) Amend market rules to permit an entity that aggregates the demand responses of individual retail consumers to bid the aggregate demand reduction directly into an RTO or ISO energy market, unless not permitted by state law.
4) Modify market power mitigation rules so that pricing during an emergency can elicit more demand response.

Long-term Power Contracting - proposals
1) Require RTOs and ISOs to post information that would facilitate long-term contracts.
2) Require or encourage efforts by RTOs and ISOs to develop standardized forward products.
3) Dedicate a portion of the ISO’s or RTO’s website for market participants to post long-term buy/sell offers.

Market Monitoring Policies and Information Sharing - proposals
1) Remove the market monitoring unit from RTO/ISO operations.
2) Require that the MMU advise the Commission and other stakeholders of any design flaws and report to the Commission any tariff violations it believes may have been committed by the RTO or ISO.
3) Regular conference calls among the market monitor, interested state commission and FERC staff.
4) Release of offer and bid data, with a lag period. Release would mask market participants’ identities.
5) Subject to certain limitations, state regulatory commissions within an RTO or ISO may request and receive information from the RTO’s or ISO’s market monitoring unit.
6) Develop a pro forma tariff provision to address all sections relating to market monitoring.

Responsiveness of RTOs and ISOs - proposals
1) Provide RTO and ISO customers with direct access to the board of directors."

Comments on the ANOPR are due 45 days after publication in the Federal Register. The full texts of the ANOPR and ANOPR Fact Sheet are available on the NEM Website.

The Commission issued Order 697, reforming its market based rate program. The significant elements of the new rule include: 1) changing the Commission's four prong analysis of whether a wholesale seller of electric energy, capacity or ancillary services qualifies for market based rate authority into a two part test of vertical and horizontal market power; 2) eliminating the exemption for generation built after July 9, 1996; 3) allowing a seller to use the entire RTO-ISO geographic footprint as the default relevant geographic market if the RTO/ISO has sufficient market structure and a single energy market, unless the Commission determines there is a submarket within the RTO/ISO, in which case the submarket becomes the default relevant geographic market; 4) for sellers that have not demonstrated a lack of market power, the Commission will decide appropriate mitigation on a case by case basis, including whether a "must offer" requirement is needed to mitigate market power; and 5) permitting mitigated sellers to make market-based rate sales "to the border" if the seller commits that the power will leave home and not ricochet through an affiliate. The full text of Order 697 is available on the NEM Website.