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September 30, 2011
Upcoming NEM Meetings

October 2011 NEM Fall Leadership Roundtable – NEM’s Fall Leadership Roundtable will be held in Trenton, NJ on October 11-12, 2011. The Chairman, Commissioners and key Staff of the NJBPU have confirmed their attendance and invitations to the Governor’s office and state legislators are also being extended for this event.

Early Bird registration is now available on the NEM website. Special NEM hotel rates are $99 per night at the Marriott Trenton Downtown, 1 West Lafayette Street, Trenton, NJ 08608, and (866) 373-9806. Use this hotlink for hotel reservations.

January 2012 Executive Committee Meeting - NEM’s Annual Winter Executive Committee Meeting will be held at the headquarters of SCRA in Charleston, South Carolina on January 24-25, 2012. The Winter Executive Committee Meeting is where Executive Committee members set NEM's course for the coming year. Many thanks to Bill Mahoney and SCRA for hosting the Winter Executive Committee meeting.

You may register for the meeting at this hotlink. NEM has a room block at the Hilton Garden Inn Charleston Airport, 5265 International Blvd in North Charleston, SC. You may register for the hotel at this hotlink or call the reservation number 843-308-9330 or 1-800-HILTONS and reference group code NLL.

Nodal Exchange Joins NEM

NEM is pleased to announce that Nodal Exchange LLC has joined the Association. Nodal Exchange will be represented within NEM by Paul Cusenza, CEO; Ann Sacra, President and COO; and Aaron Osguthorpe, Director, Account Management.

Nodal Exchange is a privately held, Delaware limited liability company based in Vienna, Virginia. Nodal Exchange's management, employees, and advisers have extensive experience in the energy and financial industries. Nodal Exchange operates as an Exempt Commercial Market (ECM) as defined by the U.S. Commodity Futures Trading Commission (CFTC).

Nodal Exchange is the first commodities exchange dedicated to offering locational (nodal) futures contracts and related services to participants in the organized North American power markets. Nodal Exchange builds on the success of the existing Regional Transmission Organization (RTO/ISO) Day Ahead and Real Time markets by allowing its Participants to trade cash-settled, fully standardized futures contracts in a cleared market, enabling market Participants to effectively manage basis and credit risk. Nodal Exchange's auction and OTC trade platforms, cleared through LCH.Clearnet, provide enhanced basis and credit risk management and produce the forward price transparency and transaction liquidity needed in the North American power markets.

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Draft Decision on Legal Agents and Automatic Invalidation Clauses

The Authority issued a draft decision pertaining to the definition of "legal agents" as well as automatic invalidation clauses.

The legislature recently passed a law pertaining to what circumstances a third-party agent is deemed a “legal agent” of electric suppliers and for which suppliers must provide appropriate training for such legal agents. The Authority determined that, "Any person or entity who “contracts with” or is “compensated by” an electric supplier to sell electric generation services will be deemed to be a “legal agent” of such electric supplier, whether such person or entity is a broker, marketer, aggregator or sale representatives. It is irrelevant what title or legal descriptions the parties give themselves, the Authority will consider only three factors: the language of any contracts between the parties, whether compensation has been made by the supplier, and the nature of services performed by the agent." The Authority also determined that the term “to sell electric generation services” under the statute should include, "any business activities conducted under an Electric Supplier License issued pursuant to Conn. Gen. Stat. §16 245, as amended, that involve customer contact through any media (in person, through the Internet, by telephone). Such activities may include customer support services such as processing customer complaints or enrollments."

The Authority additionally decided that the use of automatic invalidation clauses by any electric supplier should be prohibited. The use of such contract term would be required to stop immediately and suppliers must stop attempting to enforce such terms in pre-existing contracts.

The full text of the Draft Decision is available on the NEM Website.

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NEM Comments on Proposed Electric Marketing Standards

NEM filed comments on the Commission's proposed Order and regulations on electric marketing standards. NEM recommended as follows:

1) seasonally adjusted door-to-door solicitation hours would strike an appropriate balance between allowing marketing activities during reasonable hours and respecting consumer privacy and protection concerns;
2) the concept of a utility-maintained Do Not Market List has not been fully vetted and should not be included in the proposed rules;
3) regulations pertaining to the use of a utility name or logo should focus on the entity’s use of proper disclosures of its relationship to the utility;
4) residential and small commercial consumers should be provided a three day contract rescission period that runs from the date of the consumer’s signing the contract, or, alternatively, the consumer’s receipt of the contract;
5) early termination fees should not be capped at $50, or, at a minimum, the proposed rule should be clarified that the fee limitation applies only to residential consumers and not commercial and industrial consumers; and
6) the proposed regulations should not include an additional ten day period after receipt of the first bill to terminate a contract without a termination fee.

The full text of NEM's Comments is available on the NEM Website.

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Commission Approves RFP for New Generation

The Commission approved an RFP for new generation to be issued by the State's electric utilities. The Commission took this action based on its determination that, "the issuance of the RFP is in the best interest of Maryland ratepayers and may promote the long-term electric reliability of the State." The Commission found that Maryland faces the threat of insufficient new capacity despite the PJM Reliability Pricing Model. Long-term reliability is additionally threatened by: "(i) Maryland's status as a net importer of electricity, importing about 30 percent of its electric needs each year; (ii) the cancellation or postponement of certain large-scale transmission projects coupled with the unpredicatble transmission planning process that has become characteristic of PJM's Regional Transmission Expansion Plan; (iii) the potential that load forecasts could rise unexpectedly; (iv) the increased reliance the State has had to place on demand response to compensate for anemic electric capacity growth; (v) the risk that Environmental Protection Agency regulations and future State and federal emissions legislation could cause substantial retirements of base-load generation, especially coal plants, in the State and throughout the PJM region; (vi) the fact that Maryland relies heavily on coal plants for its electric generation needs; and (vii) the significant number of renewable resources anticipated to come online within PJM as a result of Maryland and other state Renewable Portfolio Standards, which, because of the nature of their output, will increase the need for regulation services from existing and new conventional generation."

Requirements of the RFP include: proposals must include capacity and energy located within Southwest MAAC zone; the generation must be new, natural-gas fired units; the RFP term cannot exceed 20 years; the generation capacity resource proposed cannot exceed 1,500 MW; and the resource must not have cleared a prior PJM Base Residual Auction for capacity.

The electric utilities must issue the RFP by October 7, 2011, with a Commission pre-offer conference to be held October 21, 2011. The Commission will hold a hearing to determine whether new generation is needed to meet the long-term anticipated demand in Maryland for standard offer service and other electricity supply, and if so, the quantity needed. The hearing will be held January 31, 2012, and comments are due January 13, 2012. The full text of the Notice of Approval and RFP is available on the NEM Website.

Retail Gas Market Conference

The Commission will convene a retail gas market conference for the purpose of discussing preparations by the gas utilities to meet winter gas market demand and expectations of market conditions. Participants are to also discuss potential costs and benefits associated with hedging for summer 2012 injections and other future periods given existing natural gas prices. Competitive suppliers are invited to participate "to the extent competitive conditions allow." The Conference will be held October 25, 2011, at 10AM. Comments are due October 18, 2011. The full text of the Notice of Retail Gas Market Conference is available on the NEM Website.

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