Staff has requested submissions of issues lists on gas supplier regulations by September 15, 2006. Staff noted that the Commission recently voted to send proposed electric supplier regulations for publication. Maryland law requires consistency in regulations governing electric and natural gas suppliers. Accordingly, Staff is seeking input on major issues to be addressed in companion gas supplier regulations. Submissions should be sent to agarofalo@psc.state.md.us.

Pursuant to Commission Order, RG&E filed an ESCO Referral Program proposal. The proposal utilizes the ESCO Service Approach whereby customers are returned to utility service if they have not affirmatively entered into a contract with the ESCO for the post-introductory period. RG&E will offer a gas and electric program with a typical 7% introductory discount for two billing cycles for enrolling customers. Customers may select an ESCO or be assigned to an ESCO on a rotating basis. The program will begin March 1, 2007, and terminate on December 31, 2008, unless otherwise extended. The electric program will not be offered during RG&E's October through December electric Voice Your Choice enrollment periods. To participate in the referral program, ESCOs must participate in RG&E's consolidated billing and POR programs. Eligible electric customers include SC1, SC2 and SC4 residential and small non-residential customers. Eligible gas customers include SC1 residential customers and commercial gas customers customers with an annual usage of 5,000 therms or less.

RG&E proposes to collect the incremental, start-up and on-going costs of the program from participating ESCOs. RG&E's "low end estimate" of the cost charges to collect from gas ESCOs are $3,618 per month per ESCO for one-time incremental costs and $6,125 per month per ESCO for on-going incremental costs. RG&E's "low end estimate of the cost charges to collect from electric ESCOs are $6,719 per month per ESCO for one-time incremental costs and $6,125 per month per ESCO for on-going incremental costs. RG&E's "high end estimate" of the cost charges to collect from gas ESCOs are $4,413 per month per ESCO for one-time incremental costs and $6,125 per month per ESCO for on-going incremental costs. RG&E's "high end estimate" of the cost charges to collect from electric ESCOs $8,196 per month per ESCO for one-time incremental costs and $6,125 per month per ESCO for on-going incremental costs.

The full text of RG&E's ESCO Referral Program Proposal is available from NEM headquarters.

NEM submitted joint testimony with Hess and Constellation New Energy in the Equitable and Dominion Peoples stock transaction proceeding. The testimony argued that the current tariff structure implemented in the Dominion Peoples service territory has fairer asset sharing rules, balancing guidelines and related issues for Choice and transportation customers and that, "it would be in the public interest to ensure that, at a minimum, the current Dominion Peoples programs are maintained and become the new standard for the entire merged service territory as a condition of any combination of market participants of this size and dominance. If the stock transfer is permitted to take place before Equitable is required to address the significant defects in its Choice and Transportation programs, the subsequent acquisition and elimination of Dominion Peoples from the market area in my opinion could result in a reduction of competition and the positive benefits of competition that have been enjoyed by consumers. The proposal currently before the Commission would potentially eliminate the progress made to date on the Dominion Peoples system and prevent growth of effective competition in the expanded, post-transaction Equitable service territory."

The testimony recommended that Commission approval of Equitable's acquisition of Dominion Peoples be premised upon certain conditions: 1) Equitable should be instructed to lower their rates so they are equivalent to Dominion Peoples; 2) Equitable should adopt Dominion Peoples operating policies and procedures; 3) Equitable should be instructed not to move the storage assets of Dominion Peoples upstream; 4) Equitable should be instructed not to change the LIFO storage accounting method; and 5) Equitable should be instructed to eliminate its Agency program. The full text of NEM's Testimony is available on the NEM Website.

In Staff's testimony on the transaction, they noted their opposition to the acquisition under the terms in the utilities' application. Staff argues the utilities have failed to demonstrate a positive benefit to their ratepayers. Staff opposes the proposal to combine the transportation and storage assets of the companies. Staff recommends that the proposed blending of the utilities' PGC rates be deferred until at least the beginning of the next PSC cycle beginning on October 1, 2007. Staff also questions the level of market concentration that would result. The full text of Staff's Testimony is available on the NEM Website.