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September 1, 2017
NEM Western Energy Policy Summit

Please mark your calendars and plan to join us for NEM's Western Energy Policy Summit on October 23-25, 2017. The Summit will take place at Caesars Palace in Las Vegas, Nevada. The Agenda is hotlinked here. You may register at this hotlink.

New Hampshire
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Commission Adopts Final Competitive Electric Power Supplier Rules

Subsequent to the review process of the state's Office of Legislative Services, the Commission filed its final adopted rules for Competitive Electric Power Suppliers and Aggregators. NEM filed comments on the original rule revision proposals when they were released early this year. The rules are to become effective November 1, 2017.

The final rules include a number of positive revisions, reflecting the recommendations that NEM made in its comments. For instance, the proposed variable price disclosures were significantly modified to remove proposals to require disclosure of components of variable pricing structure and twelve months of historical pricing information, including a graphical display of such pricing. This was dropped in favor of disclosure of a "general description" of variable pricing components. The original proposal to require customer notice thirty days prior to a variable price increase of ten percent or more was changed to twenty five percent. Suppliers charging variable prices must post on a "publicly available website where residential and small commercial customers may readily obtain the applicable variable price per kWh no less than five calendar days in advance of the effective date."

Suppliers offering fixed price offers must include on their website and terms of service the "average monthly price" for service to residential and small commercial customers assuming different usage levels.

Importantly, the original proposal to effectively ban door-to-door enrollments by requiring customers to make a twenty four hour advance request for the solicitation, was dropped. Instead, the final rules incorporate approved hours for door-to-door solicitation (Monday-Saturday 9AM to 7PM and Sunday 12PM to 6PM), written notice requirements, and a requirement for the door-to-door representative to leave the premises prior to any third party verification of enrollment. The final rules also incorporate changes to the contract rescission period for residential and small commercial customers to extend the rescission period an additional five business days for door-to-door enrollments (when terms of service are provided electronically the rescission period extends from five business days to ten business days and when the terms of service are mailed the rescission period extends from five business days to eleven business days).

With respect to regulations pertaining to Commission enforcement procedures, the original proposal to require a supplier to sign a consent agreement, request a hearing or be deemed to have agreed with Commission findings within ten business days following the issuance of a Notice of Violation, was extended in the final rules to fifteen business days.

The full text of the Final CEPS Rules is available on the NEM Website.

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ANOPR on Capacity Release

Following up on the Commission's Natural Gas Retail Markets Investigation into competitive market improvements, it has issued an ANOPR on capacity release, transfer and assignment between utilities and competitive natural gas suppliers (NGSs). ANOPR proposals pertain to capacity payments, access to capacity assets, imbalance trading, and penalties.

The Commission proposes that all customers should pay for the average system cost of capacity, regardless of their shopping status, instead of having the NGS pay for released capacity assets. The Commission opined this would reduce risk for utilities and NGSs and provide NGSs with the improved ability to offer innovative or lower priced services. Additionally, "[s]ystem reliability and stability is ultimately the concern of all customers and therefore, such factors like peak day should be borne by all customers fairly and equitably with no regard to shopping or non-shopping status." The Commission proposes to add language reflecting this proposal as follows: "Capacity or Pennsylvania supply costs shall be charged to all customers as a non-bypassable charge based on the average contract rate for those services."

With regard to which assets are released to NGSs, the Commission proposes to require the use of virtual access to assets that the utility cannot otherwise offer due to reliability or other restrictions. While there is no requirement for the utilities to release a "slice of the pie" of assets to NGSs, they cannot release capacity in a manner that is discriminatory. Current regulations also require that, "capacity assets must follow the customers for which the NGDC has procured the capacity, subject only to the NGDC's valid system reliability and FERC constraints." The Commission proposes to add language to the regulations as follows: "When release must be restricted due to reliability or other constraints, an NGDC shall develop a mechanism that provides proxy or virtual access to the assets."

The Commission additionally proposes that daily imbalance trading between market participants at the utility level and between choice and transportation programs be implemented to provide NGSs with the improved ability to avoid penalties. The regulations are proposed to be revised to reflect this as follows:
"An NGDC shall provide the opportunity for imbalance trading on the day the imbalance occurred. Capacity may be traded between market participants provided that either:
1) The trade improves the position of both parties.
2) The trade improves the position of one party and is agreed to by the second party but does not negatively impact the second party's imbalance."

The Commission also proposed to standardize the penalty mechanism applicable during off-peak periods. Utilities would establish penalties based on local gas costs and incorporate a multiplier, expressed as, for example, a standard percentage or a market-based formula. The Commission proposes that utilities include language in their tariffs as to when penalties might be waived. In addition, the Commission seeks comment on whether NGSs that intentionally help the utility to correct an imbalance should be rewarded (market cost of gas plus or portion of the penalties levied) if a penalty was levied on a different entity that caused the imbalance. The Commission proposes the following language to reflect the proposals on penalties:
"Penalties during system off-peak periods must correspond to market conditions.
1) An NGDC shall use the system average cost of gas as the reference point for market based penalties. If an NGDC takes service from a local hub, it may use the local hub as a reference point for market based penalties.
2) The lowest penalty must be set at the market price."

Comments on the ANOPR are due forty five days after publication in the Pennsylvania Bulletin. The full text of the ANOPR is available on the NEM Website.

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