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July 1, 2011
NRRI Paper on Gas Customer Choice

NRRI released a paper entitled, "'Gas Choice' - One Big Factor Not To Overlook." The paper argues that, "any benefits to customers from “gas choice” are largely in the form of lower gas bills. Customers have seen few new value-added services and little or no improved customer service. The scant evidence for the U.S. points to either small or even negative benefits for 'choice' customers." The paper goes to argue that:
"1. Residential customers are not well-informed about natural gas markets. . . .
2. Most customers don’t know whether they have benefited from choosing a third-party provider. . . .
3. Customers might find it too inconvenient or costly in terms of time and effort to change marketers or switch back to the utility when it would be in their best interest."

The paper identifies questions for regulators to ask as to whether residential consumers are deriving benefits from gas choice programs. The paper concludes by suggesting that, "Most observers would regard prohibition of 'customer choice' as an extreme measure that is tenable only when markets left on their own would produce little or negative benefits for consumers. Two prominent features of poorly performing markets are: (1) firms have substantial market power and (2) consumers are ill-informed and inactive in changing firms when they should. Regulators should consider whether “gas choice” markets possess these features." The full text of the NRRI Paper is available on the NEM Website.

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Proceeding on ComEd Supply Rate Design

Following the recommendation of a Staff Report, the Commission has opened an investigation into ComEd's supply rate design. Specifically, the investigation will examine, "issues related to supply rate design regarding residential customers of the Company and to address the proper allocation of non-coincidental peak demand among the four residential customer classes." The Staff Report noted the potential subsidies associated with non-space heating customers and suggested exploring the issue of whether a separate supply rate for such customers continues to be warranted, particulary in view of increased activity in the competitive market, and the impacts on the competitieve market of the existing separate rates. The full texts of the Initiating Order and Staff Report are available on the NEM Website.

New Jersey
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NEM Comments on Proposed Modifications to Energy Competition Rules

NEM filed comments on the Board’s proposed readoption with amendments of its Energy Competition Rules. NEM noted its support for a number of the Board's proposed rule changes including modifying the rules to provide a consumer with a seven calendar day right of contract rescission, instead of the current fourteen calendar day provision. NEM also supported the Board's proposal to allow audio verification of a customer switch to be performed by a competitive supplier or by an independent third party. NEM did however oppose the proposal that the entire marketing portion of the call be taped. NEM offered additional suggested rule changes: 1) eliminate the requirement of thirty days written notice of termination; 2) modify the marketing standards to allow competitive suppliers to better express the value of competitive offerings; 3) examine the appropriate utility credit requirements based on capacity obligations. The full text of NEM's Comments is available on the NEM Website.

New York
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NFG Proposed Tariff Changes on Storage Inventory Balance Requirements

NFG recently filed proposed changes to its tariff pertaining to storage inventory balance requirements. Of particular concern are the proposed changes to required storage inventory levels. Additionally, there is a discrepancy in the demand charge applied to a supplier when a new customer is added (storage gas transfer rate) versus the rate when storage is returned by the supplier because of reduced customer usage (base storage transfer rate). The changes are proposed to become effective on August 31, 2011. Comments on the filing are due July 25, 2011. The full text of the NFG Filing is available on the NEM Website.

NEM Comments on Presentation of Electric Utility Pricing Information on Power to Choose Website

NEM filed comments in support of a Petition suggesting that the electric utility pricing be removed from the Power to Choose website. NEM further recommended that the removal of the electric utility pricing information be accompanied in the interim by a utility pricing disclaimer on the Power to Choose website that discloses to consumers that electric prices fluctuate on a daily basis and that prices can be extremely volatile, particularly in peak seasons. As a long term goal, NEM suggested that a stakeholder collaborative be formed for the purpose of studying how electric utility pricing can be disclosed to consumers in a more accurate, transparent and timely fashion. The full text of NEM's Comments is available on the NEM Website.

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