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June 8, 2012
NEM Summer Policy Conference

NEM's Summer Policy Conference will take place on August 21-23, 2012, in Chicago, Illinois. The Illinois Commerce Commission has confirmed that the entire Commission and its staff will participate and other top State Officials and Stakeholders will be invited. We are also pleased to inform you that the University Club has granted NEM permission to offer rooms at this exclusive Club on a first-come, first-served basis to our members subject to its code of conduct for guests at the Club. All reservations for members who wish to stay in the Club should be arranged with Catalina Aguilar at NEM headquarters. Please also note that we are arranging to have an NEM Member Baseball Game Night, the evening of August 22, 2012, at 7PM, White Sox v. New York Yankees. Please use this hotlink to register.

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Staff Memo to Commission on Municipal Aggregation Rulemaking

In the Commission's Order on ComEd's Rate GAP tariff pertaining to municipal aggregation, Staff was charged with investigating the Commission’s statutory authority to initiate a rulemaking to develop statewide standards for the municipal aggregation program. Staff was required to report back its findings and recommendations within sixty days of issuance of the Order. Staff has now provided a memorandum to the Commission. The memo begins by noting that, "Municipal aggregation is created in Section 1-92 of the IPA Act, a statute that establishes no direct role for the Commission in its implementation. The state entity that is charged with assisting municipalities and counties as they consider whether and how to provide for the aggregation of the electric loads of residential and small commercial customers is the Illinois Power Agency. . .

While the IPA Act is clear in creating a role for the IPA, it is less clear in addressing several other issues. According to ORMD, these include: (1) how to reconcile customer switching requirements, including those in the Consumer Fraud and Deceptive Business Practices Act (“CFA” [815 ILCS 505/2EE and 2HH]), with municipal aggregation, (2) the feasibility of requiring winning suppliers to show to the Commission how the bidding process was conducted and to provide a copy of the successful bid, given that Section 1-92(c) of the IPA Act outlines a “process for soliciting bids for electricity and other related services and awarding proposed agreements for the purchase of electricity and other related services”, (3) who should track information related to municipal aggregation in a way that will be transparent and useful to local governments, market participants, and State decision makers, (4) if and how the obligations for electric utilities for opt-in aggregations differ from their obligations for opt-out aggregations, especially when it comes to releasing customer account numbers, (5) whether to establish required guidelines for the mailing of opt-out and opt-in notices and (6) how individual customer accounts will be treated when the initial municipal aggregation agreements expire, some as early as 2012, and new programs are created"

In the absence of a legislative amendment, the memo concluded the Commission does have authority to reach some of the above issues. This includes its authority with respect to supplier certification, customer switching rules, supplier and utility oversight provisions, and utility informational and reporting requirements.

The memo concludes by recommending that, "the Commission direct its Staff to consult with other governmental entities with authority related to municipal aggregation, including specifically the Illinois Power Agency, and prepare a Staff Report outlining in as much detail as possible the areas Staff believes the Commission should address in a rulemaking. A draft Order could then be presented to the Commission to initiate a rulemaking. The recommended time for entering such an order would be immediately after the Commission has completed the adoption of 83 Ill. Adm. Code 412 “Obligations of Retail Electric Suppliers,” which is the subject of Docket No. 09-0592, but no later than August 1, 2012."

The full text of the Staff Memorandum is available on the NEM Website.

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Equitable Filing on POR and Billing Adjustments for Heat Values

Equitable filed two matters for Commission consideration. Equitable proposes a voluntary POR program for service to residential and small commercial customers. The program would be provided on an "all in" basis. The proposed discount rate for residential customers is 1.7946%, and the proposes discount rate for small commercial customers is 0.4776%.

Equitable also filed alternative proposals for adjusting customer billing on a monthly basis as a result of changes in the heating value of natural gas. Equitable argues the change is necessary to avoid gas cost cross-subsidizations between Section 1307(f) Purchase Gas Cost customers and transportation customers. Specifically, Equitable proposes to make, "monthly updates to the Btu conversion factor, rather than the current practice of annual updates. This modification will more closely align the tariff Btu conversion factor with the actual system Btu content and. therefore, minimize the gas cost cross-subsidization, between PGC and transportation customers." Equitable proposes three alternatives to accomplish this: monthly delivery rate adjustments; monthly volumetric heat value factor adjustments applied to metered sales volumes; or conversion to dekatherm billing.

The full text of the Equitable Filing is available on the NEM Website.

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