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July 28, 2006
Upcoming NEM Meetings

Please note the following upcoming NEM meetings:

Fall 2006 Industry Leadership Roundtable - Delaware - Washington Gas Energy Services has generously offered to host the meeting
Winter 2007 Executive Committee Meeting - week of Jan. 24 - SCRA has graciously invited us back to Charleston, South Carolina
Spring 2007 Annual Conference - week of May 21 - Washington, DC
Summer 2007 Executive Committee Meeting - Chicago, Illinois - WPS Energy Services has generously offered to host the meeting

Wal-Mart Elected to NEM Executive Committee

NEM is pleased to announce that Wal-Mart Stores, Inc. has been elected to the Executive Committee. Wal-Mart is the world's number one retailer and second-largest company (by revenue), serving more than 138 million customers per week while generating more than $315 billion in annual sales. In addition, Wal-Mart invests over $500 million annually in sustainable technologies and innovations. Wal-Mart will be represented within NEM by Marty Gilbert, General Manager of Texas Retail Energy Emerging Markets - which is a subsidiary of Wal-Mart and their retail electric provider in Texas; Chris Hendrix, General Manager of Texas Retail Energy, LLC; Jim Stanway, Director of Project Development at Wal-Mart Energy Department; and Greg Trimble, Director of Energy Procurement at Wal-Mart Energy Department.

Power-Direct Elected to NEM Executive Committee

NEM is pleased to announce that Power-Direct has been elected to the Executive Committee. Power-Direct is the one of the most successful direct marketing firms in the business. Power-Direct specializes in providing call centers with highly trained inside sales teams and can provide superior sales results in markets that require a complicated or technical sale. The company also offers turnkey call center solutions for clients that are sensitive to reliability, quality control and regulatory compliance. Power-Direct will be represented within NEM by Dan Delfino, President and CEO, and Eric Krueger, Vice President of Business Development.

New York
Click here to view all past updates.
NEM Comments on ESCO Price Reporting

In response to the Commission's proposal on ESCO price reporting requirements, NEM agreed with the Commission that consumer education is a critical component to a well-functioning market. NEM argued it can be achieved in a manner that minimizes the burden on the competitive marketplace. NEM recommended that ESCOs submit a minimum monthly posting to Staff of their current rates, with a disclaimer that rates are subject to change due to market conditions and other factors. NEM also recommended that corresponding increased transparency in unbundled utility rates is necessary to facilitate meaningful comparisons with ESCO offerings. There are vital pieces of information to which a consumer must have access to allow informed comparisons to occur. The basic information an educated consumer needs to know includes their usage and their current applicable utility rate. The current applicable utility rate should be conveyed in a transparent manner:
1) be fully unbundled on an embedded cost basis,
2) disclose whether and how utility hedging is reflected,
3) disclose how frequently the utility rate is subject to change,
4) disclose that the utility rate is subject to adjustment for true-ups, and
5) disclose what current rate adjustments are in effect.
The full text of NEM's Comments is available on the NEM Website.

Central Hudson Rate Order

The Commission approved Central Hudson's electric and gas rate settlement. One issue of significance in the case was the Consumer Protection Board and PULP's insistence that the utility have a fixed price offering. The Commission declined to require Central Hudson to offer a fixed price option. The Commission noted that, "there's no guarantee that fixed price options will be better for customers than a variable price. Budget or levelized payment plans are available, as required by law, to all utility customers, and they already provide a tool by which customers can achieve certainty with respect to their monthly bills. Moreover, the record shows there is a competitive market in Central Hudson's territory, which includes provision of fixed-price offers from competitive suppliers."

The Commission approved the settlement's proposal to reflect utility hedges in the Market Price Charge mechanism, a commodity charge applicable to utility commodity sales customers. However, the Commission noted concerns about the potential anti-competitive impact of reflecting utility hedges in the commodity rate, rather than in the delivery rate. The Commission decided a generic proceeding should be opened to consider the matter and results could be implemented in later years of Central Hudson's rate plan.

Existing Market Match, Market Expo, ESCO ombudsman and ESCO referral programs will continue, and one or two Energy Fairs will be conducted. Existing backout credits will be maintained through June 30, 2007, when they will be replaced by a merchant function charge mechanism. The full text of the Central Hudson Order and Settlement is available on the NEM Website.

National Grid-Keyspan Merger Application

National Grid and Keyspan filed an application with the Commission for approval of their merger. The filing incorporates a ten year rate plan for Keyspan. Keyspan proposes to unbundle commodity and billing charges. Keyspan NY's proposed unbundled supply rate would increase from the current $.21/Dth to $.53/Dth and includes gas supply procurement costs, commodity-related credit and collections costs, commodity-related advertising and sales costs, commodity-related uncollectibles expense, and the return requirement on working capital associated with the lag on customer payments for gas costs. Keyspan NY's proposed unbundled billing rate is $.76 per account per month. Keyspan LI's proposed unbundled supply rate is $.22/Dth, and its proposed unbundled billing rate is $.65 per account per month.

Keyspan NY proposes to implement purchase of receivables without recourse at a discount while Keyspan LI proposed to postpone implementing such a program because of the obsolescence of its billing system. Keyspan NY and Keyspan LI both propose to implement an ESCO referral program.

The full text of the Merger Application is available on the NEM Website.

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