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August 1, 2008
NEM Comments on NYISO Emergency Filing on Lake Erie Scheduling

NYISO made an "exigent circumstances" filing with the FERC to revise its tariff "because a relatively small number of Market Participants are scheduling transactions over circuitous Scheduling Paths around Lake Erie to take advantage of a 'seam' between the methods that are used by the organized markets in the Eastern Interconnection to price External Transactions." While NYISO says it has not identified a violation of its tariff or market rules, it says that the scheduling is "adversely affecting the operation of the ISO-Administered markets." NYISO proposed tariff changes to preclude the scheduling of External Transactions over eight Scheduling Paths and requested the Tariff revisions become effective July 22, 2008. NYISO argued the change is necessary to have actual power flows more closely conform to scheduled power flows. The full text of NYISO's Filing is available on the NEM Website.

NEM submitted comments on NYISO's filing suggesting that the Commission: 1) initiate an investigation into whether there were violations of the Commission’s market behavior rules, that uses a public process through which potentially aggrieved parties are afforded the opportunity to accurately assess their harm and disgorgement of funds can be required as appropriate; 2) promptly approve NYISO’s tariff-based administrative solution to the Lake Erie transaction scheduling subject to the NYISO Management Committee ratification process; and 3) direct NERC to achieve an agreement on the operation of the Ontario-Michigan Phase Angle Regulators in the interest of maintaining system reliability. The full text of NEM's Comments are available on the NEM Website.

NERC Compliance Filing on LSE Registration for Retail Choice Loads

NERC submitted a compliance filing pursuant to a previous Commission Order pertaining to which entities should be registered as LSEs for retail choice load. NERC's filing would, "require the Distribution Provider to whose system the electric loads in retail choice areas are connected to be registered as the LSEs for all loads connected to its system for the purpose of compliance with NERC's approved reliability standards applicable to LSEs. In the event some other entity, including a load aggregator, is responsible for compliance with NERC's approved standards, the provisions of joint registration or transfer by agreement currently contained in the registration criteria may be utilized." This proposal in in replacement of NERC's earlier proposal to deem retail power marketers serving end-use customer load as LSEs for registration and reliability standard purposes. The full text of NERC's Compliance Filing is available on the NEM Website.

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Illinois Power Agency Requests Extension on Power Procurement Plans

State law requires the newly formed Illinois Power Agency (IPA) to file power procurement plans for electric utilities by August 15th. The plans are meant to, "ensure adequate, reliable, affordable, efficient, and environmentally sustainable electric service at the lowest total cost over time, taking in account any benefits of price stability." IPA has petitioned the Commission for extension of time to file the plans to September 3, 2008. The full text of IPA's Petition is available on the NEM Website.

New York
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Central Hudson Files Electric and Gas Delivery Rate Case

Central Hudson filed a new electric and gas delivery rate case with the Commission, with an expected effective date of July 1, 2009. With respect to its retail choice program, CenHud notes "significant growth" in both electric and gas migration since December 2006 as well as an increase in marketers competing to serve customers. CenHud proposes to continue funding at current levels for the low cost Market Expo, Energy Fairs and Competition Awareness Survey, but given low levels of previous participation, to determine interest before actually conducting the programs. CenHud maintains that the ESCO Ombudsman and ESCO Satisfaction Survey should be discontinued. It supports ongoing informational retail access awareness advertising and enhancement of services to be funded by the Competition Education Campaign.

CenHud proposes to update its rate structure, including changes to its electric and gas Merchant Function Charge (MFC) Administration Charge and MFC Supply Charge to reflect cost elements avoided by the company when customers migrate. (Proposed changes to the electric MFC Administration Charge and MFC Supply Charge can be viewed at this hotlink, and proposed changes to the gas MFC Administration Charge and MFC Supply Charge can viewed at this hotlink.).

CenHud proposes to revise the discount rate for its POR program to reflect the currently approved customer deposit rate in effect at the time of the annual update. CenHud proposes to update its consolidated billing service credit for gas customers such that the rate for SC12 customers will be $0.49 and $0.98 for all other service classes. The consolidated billing service credit for electric customers would be updated as $0.71 for SC1 customers and $1.42 for all other service classes.

The full text of CenHud's Rate Filing can be viewed at:

ConEd Technical Conference on Proposed Expansion of Marketer Referral Program and Report on Electric Choice Program

A technical conference was convened this week for the purpose of providing a forum for ConEd to explain its report on the potential expansion of its ESCO referral program to include customers seeking new service. With respect to expansion of the referral program, the Commission was concerned with issues of utility HEFPA compliance (providing timely service to applicants), potential impediments to timely provision of service, and ConEd cost recovery, amongst other issues. Requests to be added to the service list are due August 8th, initial comments are due August 22nd and reply comments are due September 5th. NEM's Summary of the Technical Conference is available on the NEM Website.

ConEd also filed a semi-annual report on its electric retail access program discussing its promotional activities and expenditures, competition outreach and education and electric migration data for the period January 1 through March 31, 2008. ConEd reported that as of March 31, 2008, that 668,122 electric accounts migrated to marketer supply service since April 1, 2005. During each of the months of January, February and March 2008 approximately 18,500 electric accounts migrated. The full text of ConEd's Electric Retail Access Report is available on the NEM Website.

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Electric Utilities Standard Service Offer Filings

Pursuant to SB221, the electric utilities have submitted standard service offer (SSO) filings. The utilities were required at a minimum to include an electric security plan (ESP), but could also file a market rate offer (MRO). AEP and Duke Energy filed ESPs and FirstEnergy filed both an ESP and MRO. The utilities filings contemplate a three-year plan term.

FirstEnergy's MRO would use a competitive bidding process with multiple, staggered solicitations to achieve a "blended" generation price for SSO customers that smoothes price volatility. A quarterly reconiliation adjustment would be used to adjust retail prices for differences in SSO Supply Costs and SSO Generation Service revenues.

AEP has proposed an ESP that would limit the annual increase in customers total bills to approximately 15 percent. AEP will phase-in ESP rates by deferring a portion of proposed annual incremental Fuel Adjustment Clause costs in 2009, 2010 and 2011. Those costs would be recovered, plus carrying charges, over a seven year period, through a nonbypassable surcharge. A non-bypassable Provider of Last Resort Charge will be assessed to customers.

Duke Energy's ESP details a new rate structure comprised of an avoidable Price to Compare charge, unavoidable System Resource Adequacy Charge, avoidable Transmission Cost Recovery tracker, and unavoidable distribution riders. Duke Energy proposed an initial increase in rates of 6.2% to be effective January 1, 2009.

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Commission Issues Keystone Connection Report

The Commission issued the summer edition of its Keystone Connection report. The report introduces new Commissioners Robert Powelson and Wayne Gardner. Legislative activity and special sessions on electric issues are detailed. The report notes new gas base rate filings by Equitable Gas, Columbia Gas, and PECO Energy. It also discusses the issuance of a report in the gas stakeholder SEARCH process and the Commission's expectation that it will, "take action later this summer on staff recommendations arising from the stakeholder process. This action is likely to be in the form of a tentative order or proposed policy statement seeking comments from interested parties." The full text of the Keystone Connection is available on the NEM Website.

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