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July 6, 2007
NEM Summer Executive Committee and Policy Development Meeting

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 5th). Please register at this hotlink. The final agenda is available here.

EIA Report on Gas Marketer Prices and Sales

EIA began collecting price and volume information from retail natural gas marketers in 2001 regarding activities in Maryland, New York, Ohio, Pennsylvania and Georgia. EIA released a report on marketer prices and sales to residential and commercial customers for the period 2002 through 2005 based on this data. The report excludes Georgia from the results because AGL exited the merchant function in that state. The report concludes that in each of the other states examined, that, "customers purchasing natural gas from marketers paid less than LDC customers in most months during 2002 to 2005." Specifically, on an annual basis from 2002 to 2005, the average price difference per thousand cubic feet between utility and marketer prices was as follows in the residential and commercial sectors, respectively:

Maryland - $1.44 and $2.38
Ohio - $0.78 and $1.29
New York - $0.66 and $1.38
Pennsylvania - $0.36 and $1.84

The report observed that the largest gaps between utility and marketer pricing occurred during the summer months. In the cases where marketer prices exceeded utility prices it was, "limited to a 3-month period or less, with the observed price differences being less than $1 per thousand cubic feet." The full text of EIA's Report is available on the NEM Website.

Click here to view all past updates.
AGL Capacity Supply Plan 2007-2010

AGL filed a settlement setting forth a Capacity Supply Plan for 2007-2010. The settlement was signed by many of the marketers doing business in the AGL territory. The plan sets forth Design Day Demand Requirements for the three-year period, including a five percent reserve margin. The settlement sets forth the range of requirements to be supplied by interstate capacity assets as well as the level of interstate capacity assets to be retained by AGL to manage and operate its system. The settlement proposes to diversify the supply basin to include long term firm access to supply sourced from Elba Island.

The settlement contains provisions meant to enhance the operational efficiency of the dispatch of capacity resources. This includes permitting a limited amount of segmentation capacity to meet firm demand, changes to Bundled Pipeline Peaking Sales Service, direct assignment year-round of Petal Storage (part of Firm and Interruptible Nominated Sales Service), release of certain storage facilities to marketers, and modifications to credit requirements. The full text of AGL's Capacity Supply Plan 2007-2010 (Part 1 and Part 2) is available on the NEM Website (Exhibit RSB-5 is available from NEM headquarters).

Click here to view all past updates.
Marketer Complaints Against Detroit Edison Resolved

Late last year, FirstEnergy Solutions filed a complaint against Detroit Edison for alleged violations of code of conduct provisions. Early this year, Commerce Energy filed a complaint against Detroit Edison for alleged violation of its retail access service tariff agreement. The Commission approved the settlement reached between FirstEnergy Solutions and Detroit Edison, in resolution of the complaint, providing that: 1) Detroit Edison will not use supplier data receive in the course of doing business with a supplier unless it has written approval to do so; 2) Detroit Edison will not use historical usage data or prices from customers taking service from a supplier for the purpose of comparing utility and supplier pricing unless the customer so requests and gives written authorization for the comparison; 3) the utility will not perform rate comparisons using estimated supplier pricing; 4) the utility will submit customer communications regarding electric generation service for Staff review and approval; and 5) FirstEnergy will withdraw its complaint. Detroit Edison agreed to remit a lump sum payment to FirstEnergy Solutions and a $50,000 payment to the State of Michigan as part of the settlement. With respect to the Commerce Energy complaint, as part of the settlement underlying the supplier's request to withdraw its complaint, Detroit Edison will pay a $50,000 fine to the State of Michigan. The full texts of the Orders Resolving the FirstEnergy Solutions Complaint and the Commerce Energy Complaint are available on the NEM Website.

New Jersey
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Utilities 2008 Basic Generation Service Proposal

At the direction of the Board, the utilities have submitted a joint proposal for the 2008 Basic Generation Service (BGS) auction as well as utility-specific addenda. With respect to BGS-Fixed Price (FP) service, the utilities propose to continue to use a multiple round descending clock auction that seeks offers for full requirements supply for each utility's BGS-FP load for a three-year period. Tranches will be identical and uniform for each utility. One third of the utilities BGS-FP load will be procured for the supply period commencing June 1, 2008. A single clearing price will apply for each utility's BGS-FP load to all tranches procured in the auction. There will be a utility load cap and statewide load cap to limit the number of tranches a bidder can win.

As to BGS-Commercial and Industrial Energy Pricing (CIEP), the utilities are proposing certain changes to the current auction approach. They propose to change the designation of the BGS Capacity Charge to the BGS-CIEP Price. A pre-specified ancillary service component of $6.00/MWh is proposed. They also recommend changing the BGS-CIEP tranche size from the current 25MW of CIEP-eligible load to 75 MW of CIEP-eligible load. All CIEP customers will be charged the CIEP Standby Fee of $0.00015. The procurement term for CIEP load will be one year for supply commencing on June 1, 2008. A statewide load cap will apply to winning bidders. These are hotlinks to the the full texts of the Joint Utility BGS Filing, the BGS-FP Pricing Factors, and the Utility-Specific Addenda.

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