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August 11, 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.

FERC Staff Demand Response Report

As required by EPAct, FERC Staff submitted a demand response report to Congress. FERC Staff found that, "the potential immediate reduction in peak electric demand that could be achieved from existing demand response resources is between three and seven percent of peak electric demand in most regions." Staff also noted that the lack of enabling technologies, such as advanced metering, hinders demand response programs. Barriers to customer participation in demand response identified included: 1) disconnect between retail pricing and wholesale markets; 2) utility disincentives associated with offering demand response; 3) cost recovery and incentives for enabling technologies; 4) need for additional research on cost-effectiveness and measurement of reductions; 5) existence of specific state-level barriers to greater demand response; 6) specific retail and wholesale rules that limit demand response; 7) barriers to providing demand response services by third parties; 8) insufficient market transparency and access to data; and 9) better coordination of federal-state jurisdiction affecting demand response.

Staff recommended that the Commission: "1) explore how to better accommodate demand response in wholesale markets; 2) explore how to coordinate with utilities, state commissions and other interested parties on demand response in wholesale and retail markets; and 3) consider specific proposals for compatible regulatory approaches, including how to eliminate regulatory barriers to improved participation in demand response, peak reduction and critical peak pricing programs." The full text of the Demand Response Report is hotlinked here.

New York
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RG&E Voice Your Choice Program

RG&E will convene a conference call on August 14, 2006, at 10AM to review preparations for its 2006 Voice Your Choice program. The dial-in number is 1-866-453-5550, and the passcode is 7702089.

Time-Based Metering Proceeding Opened

As required by EPAct, the Commission opened a proceeding to investigate, "suggested electric utility standards for net metering service, and for time-based rate schedules and associated advanced metering and communications technology." The Commission defines time-based rates as, "any time-differentiated rate structure that varies over a time period that is less than the customer's billing period, including time-of-use, critical peak, real-time, hourly, and day-ahead rates." The Commission recently ordered the electric utilities to file plans for deployment of advanced metering systems. The Commission also required that the utilities' largest customer classes participate in time-of-use rates. The Commission is requesting comment on whether its prior actions satisfy the EPAct standard, and if not, what else needs to be done. Requests to be added to the service list are due September 13, 2006. Initial comments are due September 25, 2006, and reply comments are due October 10, 2006. The full text of the Order Initiating Proceeding is available on the NEM Website.

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Duke Energy Files Proposed Extension to Standard Service Offer

Duke Energy filed an application to extend its Standard Service Offer (SSO), subject to certain changes, beginning January 1, 2009. Duke Energy alleges that market volatility and uncertainty will impact its ability to provide reliable service if its SSO is not continued. Without approval of the application, Duke Energy said it "will be prepared to charge its consumers prices that reflect market prices on a more current basis." The proposed SSO would include an increase in the Rate Stabilization Charge (RSC) component of the price to compare, an increase in the Infrastructure Maintenance Fund component of the POLR, and eliminate the residential Regulatory Transition Charge. The revised RSC would be avoidable by the first 25% of residential load and 50% of non-residential load to switch to a competitive provider. Duke Energy also proposed to change its Corporate Separation Plan such that it would be no longer be required to transfer its generating assets to an Exempt Wholesale Generator so that it may use its generation assets to serve its load. Duke Energy argued that its consumers, "have the same options in the competitive retail electric market as they would have if DE-Ohio instituted a Competitive Bid Process (CBP) because consumers in all consumer classes, may take, and are taking competitive retail electric service from CRES providers not affiliated with DE-Ohio."

Duke Energy proposed to conduct a technical conference on the filing on August 22, 2006, at 10AM at the Commission's offices. Duke Energy offered a proposed procedural schedule as follows:
Duke Energy Testimony - September 22, 2006
Staff Report of Investigation - October 23, 2006
Commission Order Approving SSO - November 22, 2006; or
Supplemental Testimony - November 27, 2006
Intervenor Testimony - December 4, 2006
End of Discovery - December 11, 2006
Hearing - December 18, 2006

The full text of Duke Energy's Filing is available on the NEM Website.

AEP Ordered to File Competitive Bid Option

In its Order adopting AEP's rate stabilization plan (RSP), the Commission declined to require the utility to conduct a competitive bid process for 2006-2008. The Ohio Supreme Court subsequently remanded the Commission's decision for failure to comply with the statutory requirement that an option be provided for customers to participate in the electric market through a competitive bid process or other reasonable means. The Commission has now ordered AEP to file a plan to comply with this requirement. AEP's RSP will remain in effect as its standard service offer. The full text of the Order is available on the NEM Website.

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