Initial testimony was filed in ConEd's electric rate case. In Staff's filing, it recommends that ConEd's bifurcated Merchant Function Charge (MFC), whereby credit and collection costs end up being paid by all customers, be changed such that the MFC is expressed as a single charge. This would eliminate a distortion to the commodity price. Rather, the Purchase of Receivables discount rate should be calculated to include these activities. Staff notes that making this change would conform with the Joint Proposal submitted for ConEd's natural gas service.

Staff proposes that ConEd's Market Supply Charge (MSC) reflect the market value of supply and that ConEd's Adjustment Factor-MSC be used for reconciliation of actual market values and the utility's cost of electric supply. Staff argues that non-market value components like financial hedging costs and benefits, NYISO commodity-related rebills, total supply costs (as opposed to only market value costs) associated with specific energy and capacity contracts, and certain Transmission Congestion Contract costs and revenues should be separately stated. Staff also recommends that ConEd be required to file a plan with the Commission by which it would revise its MSC charge to reflect actual day ahead market prices that were in effect during each customer's billing period.

Staff proposes a modification to ConEd's proposed expansion of hourly pricing. ConEd proposed to implement hourly pricing for customers with demands greater than 1 MW in January 2009 and by January 2010 for customers with demands over 500 kW. Staff argues that the availability of meters, meter data and customer education should influence when the rates are implemented. Staff recommends that the expansion of hourly pricing for customers with demands between 1 and 1.5 MW should be delayed to permit customers the opportunity to review at least six months of hourly load data, including summer month data. Staff also recommends that customers with demands at or above 500 kw should be provided with one full year of interval load data prior to moving to hourly pricing and installation of meters should be timed to accommodate that schedule.

The full text of Staff's Testimony is available at: http://www.dps.state.ny.us/Case_07-E-0523_StaffTestimony.htm.

As a result of the Commission Order on utility commodity supply portfolios, the electric utilities are to engage in a collaborative process, "for the purpose of developing standards for measuring price volatility, goals for limiting price volatility, and mechanisms for reporting, on a quarterly basis, utility supply portfolio price information in an aggregate form." Staff has scheduled technical conferences for National Grid, Central Hudson and NYSEG/RG&E as part of this process. The conferences will held on the following dates: National Grid - October 5, 2007, at 9:30AM; Central Hudson - October 5, 2007, at 1PM; and NYSEG/RG&E - October 10, 2007, at 10AM. The conferences will be held in the 3rd floor hearing room of the Commission's Albany offices. A technical conference to discuss ConEd and O&R's electric volatility portfolio guidelines was previously scheduled for September 24, 2007, at 10:30AM in Hearing Room A of the Commission's offices at 90 Church Street in Manhattan. At the conferences, the utilities are expected to give an overview of their proposed approaches to constraining volatility through supply portfolio management.

The Ohio Consumers Counsel appealed issues associated with the Commission's approval of an extension of DP&L's market development period. The state Supreme Court agreed with the OCC that is was violative of state restructuring law (requiring unbundling of generation, distribution and transmission) to permit DP&L to recover fuel costs in a rate stabilization charge recovered from all customers in distribution rates. As a result, the Supreme Court decided to, "remand the matter to the commission to order DP&L to place the appropriate generation charges in the generation-service tariffs. We point out that while we have affirmed the commission's order with regard to the POLR costs in this and previous cases, the commission should carefully consider what costs it is attributing as costs incurred as part of an electric-distribution utility's POLR obligations." The full text of the DP&L Decision is available on the NEM Website.