The Commission received stakeholder comments on proposed competitive retail gas rules. The proposed gas rules are drawn from those developed for competitive electric service and pertain to: pre-enrollment information; transfers of service; supplier-utility coordination, utility consolidated billing, POR or prorated payments; non-residential customer protection; and residential customer protection.

Staff suggested in its comments that gas EDI should be a goal, rather than a requirement at this time. Staff recommended that the date for customer enrollments and drops be tied to the "gas day," and supported pro-ration of the first month's payment as a solution to the lag between the gas day and meter read day. Staff said it would compile an issues list of its position with questions raised by other commenters.

The Office of People's Counsel argued against requiring the gas utilities to implement POR, against permitting gas utilities to terminate service for non-payment of competitive supplier charges, and against permitting gas suppliers that are exempt from the Telephone Solicitation Act to contract with residential customers without a signed contract.

Utilities filed comments opposing a requirement for a uniform electronic data exchange system between suppliers and utilities. WGL also opposed alteration of the current payment hierarchy, as would be accomplished through a requirement to implement POR or pro-ration. BGE, while noting its opposition to POR and pro-ration as proposed in the companion electric rulemaking, suggested that if it is required in the competitive electric rules it should be equally adopted in the gas rules in the interest of billing system symmetry.

NEM and many NEM members submitted comments urging the Commission to adopt the standardized gas market rules to facilitate market development, subject to certain modifications justified for operational reasons.

The full text of the Stakeholder Comments are available on the NEM Website.

The state legislature passed HB5524 and SB213, legislation that was tie barred together, and it is expected that Governor Granholm will sign the legislation.

HB5524 restricts electric retail access to 10% of an electric utility's average weather-adjusted retail sales for the preceding calendar year. The Commission is to develop rules for the allocation of the amount of load that can be served by competitive suppliers through the use of annual energy allotments. Existing choice customers are to be given an allocated annual energy allotment.

HB5524 also permits the Commission, upon the request of a gas utility, to establish load retention transportation rate schedules or to approve gas transportation contracts as needed to retain commercial and industrial customers with individual annual transportation volumes in excess of 500,000 decatherms on the gas utility's system. The rate schedules or contracts are to be approved if the customer has, "the installed capability to use an alternative fuel or otherwise has a viable alternative to receiving natural gas transportation service from the utility, the customer can obtain the alternative fuel or gas transportation from an alternative source at a price would would cause them to cease using the gas utility's system, and the customer, as a result of their use of the system and receipt of transportation service, makes a significant contribution to the utility's fixed costs."

HB5524 sets forth a process for Commission review of gas and electric utility rate cases. In the absence of the issuance of a Commission order within 6 months of a complete utility rate application, the utility can implement up to the amount of the proposed annual rate request through equal percentage increases/decreases to all base rates. The Commission shall adopt rules for rate case review that would allow it to reach a final decision within twelve months.

An electric utiity must apply to the Commission for review of proposals to construct generation, invest in or purchase existing generation or enter in a power purchase agreement for a period of six years or longer when the construction, purchase or investment will cost $500,000,000 or more and a part of the costs would be allocable to retail customers in the state. The legislation requires the Commission to allow financing interest cost recovery in an electric utility's base rates on construction work in progress for capital improvements prior to those assets being considered used and useful.

Also of note, SB213 requires alternative electric suppliers to submit renewable energy plan programs with the Commission. The full texts of HB5524 and SB213 are available on the NEM Website.

The ALJs in Central Hudson's gas and electric rate cases have adopted a procedural schedule as follows:

Staff/Intervenor Direct Testimony - November 25, 2008
Rebuttal Testimony - December 23, 2008
Evidentiary Hearing Starts - January 12, 2009
Initial Briefs - February 10, 2009

The full text of the Notice on Procedure and Schedule is available on the NEM Website.

In its recent Order approving Iberdrola's acquisition of Energy East, the Commission required the companies to convene two collaboratives. A Fossil Generation Collaborative is to be convened to develop auction protocols, a divestiture timetable and the disposition of above-book proceeds from the sale. A Code of Conduct Collaborative is to be held on the code of conduct and affiliate transaction and cost allocation rules to apply to the companies. The collaboratives will be held October 2, 2008, at the Crowne Plaza Hotel in Albany. The Fossil Generation Divestiture Collaborative will begin at 10AM. and the Code of Conduct Collaborative will begin at 1PM. For questions, contact brian.fitzgerald@dl.com.

The Commission adopted rules on compliance with the Alternative Energy Portfolio Standard (AEPS) for electric utilities and electric generation suppliers (EGSs). The rulemaking sets forth requirements on: electric utility and EGS obligations; alternative energy system qualifications; alternative energy credit certification; alternative compliance payments; alternative energy cost-recovery and market integrity; banking alternative energy credits; and an alternative energy credit registry. The electric utilities and EGSs must supply 18 percent of electricity using alternative energy resources by 2021, achieved through a phase-in. AEPS compliance is deferred during electric utility rate caps. The full text of the AEPS Rules will be posted on the NEM Website when made available electronically.