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September 9, 2005
NEM Fall Industry Leadership Roundtable - Dates Rescheduled

Please note that due to significant member scheduling conflicts, the NEM Fall Leadership Roundtable will no longer be held on October 13-14, 2005. The meeting will now be held the following week on October 20th and 21st.

All NEM members are invited to attend the Leadership Roundtable. Companies that have expressed an interest in joining NEM will also be invited as guests of the association. Use this hotlink to register.

The Roundtable will begin in the Small Business Committee Room, located in the Rayburn House Office Building, Room 2360, on Thursday, October 20th at 10AM. A working lunch will be served and a cocktail reception will follow the conclusion of the day's events. Invitations have been extended to Key Public Officials. Maryland's Lieutenant Governor Michael Steele has confirmed his attendance.

NEM Policy Chairs will be requested to update NEM members and guests on the state of the industry in the key states identified at the last meeting and the status of issues directly affecting the members. Policy Chairs are requested to send bullets for discussion to headquarters as soon as possible. A draft agenda is hotlinked here.

On Friday, October 21st, we will conclude our meeting in the Science Committee Room in Rayburn House Office Building, Room 2325.

Please mark your calendars and plan to join us!

Proposed Rulemaking on Electric Reliability Organization and Standards

As required by the Electricity Modernization Act of 2005, FERC issued a proposed rulemaking on an Electric Reliability Organization (ERO). FERC proposed: 1) ERO eligibility criteria; 2) enforcement procedures for the ERO and FERC; 3) criteria under which the ERO can delegate authority to a Regional Entity to propose and enforce Reliability; 4) procedures for the establishment of Regional Advisory Bodies that may provide advice to FERC, the ERO or a Regional Entity on governance, applicable Reliability Standards, the reasonableness of proposed fees within a region, and any other responsibilities requested by FERC; 5) regulations governing the issuance of periodic reliability reports by the ERO that assess the reliability and adequacy of the Bulk-Power System in North America; and 6) ERO funding regulations. Comments are due October 7, 2005. The full texts of the NOPR and Bilateral Principles are available on the NEM Website.

Click here to view all past updates.
Staff Report on Standard Offer Service Procurement Improvements

Staff filed a Report on Standard Offer Service (SOS) Procurement Improvements. Staff proposed changes to the Request for Proposals, Utility Bid Plans, Full Requirements Service Agreement and related documents previously approved by the Commission. The proposed changes would take effect prospectively beginning with the issuance of the RFPs on October 3, 2005. The proposed FSA changes will have no effect on FSAs currently in effect. Staff reported that most of the proposed changes are non-substantive clarifications, corrections or additions. The proposals will be considered at the Commission's September 14, 2005, Administrative meeting. Comments on the Report are due September 12, 2005. The full text of Staff's Report is available on the NEM Website.

New Jersey
Click here to view all past updates.
Board Order on Renewable Portfolio Standards

The Board ordered that Class I and Class II renewable energy certificates (RECs) issued by the PJM-EIS Generator Attributes Tracking System can be used for compliance with the state's Renewable Energy Portfolio Standards (RPS), to commence as soon as PJM-EIS GATS is operational, which is projected to be on or about September 15, 2005. The Board also ordered that that Solar RECs and all Behind the Meter (BTM) RECs utilized for compliance with the state's RPS must continue to be issued by the Solar REC Administrator or the BTM REC Administrator, as designated by the Board. The full text of the Order is available on the NEM Website.

New York
Click here to view all past updates.
NEM Comments on Proposed ESCO Referral Program

Consistent with the Commission’s recognized objective of promoting uniformity, NEM urged the Commission to simplify the Staff's proposed ESCO Referral Program to standardize it based on the successful O&R PowerSwitch model. In the alternative, NEM argued that the Commission should consider providing the utilities an option to implement a pure marketer-referral-only program to avoid delay in implementation.

NEM argued that Commission adoption or approval of a uniform price reduction as a qualification to participate in a statewide utility referral program violates no law and is not only protected by the Tenth Amendment to the U.S. Constitution, but is precisely the type of competitive conduct that the antitrust laws were designed to protect and encourage.

NEM urged the Commission to immediately adopt simplified PowerSwitch-type programs that utilize a uniform introductory discount and consider expanding the program to permit marketers to also offer consumer-friendly billing or other value added services in a manner that is easy to administer for the utilities. The PowerSwitch program and its uniform price discount is a pro-competitive measure that has spurred marketer interest and entry in New York State. In turn this program has increased the availability of competitive offerings, and benefits consumers by permitting them to experiment with retail choice on a risk-free basis and at a savings from their utility rate. Any delay in the Commission's implementation plans would have significant anticompetitive impacts. The full text of NEM's Comments is available on the NEM Website.

Marketer Requests Commission Action on NYSEG Miscalculation of Retail Access Credit

NEM Executive Committee member Advantage Energy has filed a Petition for Investigation and Action with the NYPSC stemming from NYSEG’s miscalculation of its retail access credit. NEM will be filing in support of Advantage’s Petition.

Advantage documents that NYSEG made miscalculations of the RAC since the inception of retail choice in its service territory in 1997. The error that is subject of Advantage’s filing is NYSEG’s computation of its Bundled Rate Option with Retail Access Credit under its current Voice Your Choice Program. Advantage explains the nature and seriousness of the problem as follows:

"The impact of each calculation error, including the most recent, is two-fold. First, NYSEG over-charges retail access customers in each month the RAC is understated. Second, each ESCO that prices its supply service with reference to the RAC under-collects from its customers. The amount of the over-collection by NYSEG and under-collection by ESCOs such as Advantage exactly offset, leaving the customer unaffected. However, each time NYSEG’s miscalculation has been discovered, NYSEG refunded the amount of its over-collection directly to the customer (without even informing the affected ESCOs), rather than providing a payment to the truly affected party, the ESCO. This, of course, only serves to increase NYSEG’s goodwill with the customer at the expense of the ESCO. This has an insidious and chilling effect on retail access in general. More importantly, the refund to the customer leaves the ESCO with the hobson’s choice of absorbing the loss it has incurred through under-collection due to NYSEG’s failure to correctly calculate the RAC, or decimating its goodwill by turning to the customer to collect the shortfall."

Advantage notes that NYSEG’s miscalculation of the BRO with RAC option began January 1, 2003, at the inception of the Voice Your Choice program. NYSEG corrected the error on a going-forward basis in November 2004 after having been put on notice of the problem. NYSEG issued refunds to customers, not ESCOs, in June 2005 (with a cryptic note about the problem) without notifying ESCOs that the error had taken place. Advantage became aware of the error when a customer made inquiry about the refund it received from NYSEG. Advantage sought NYSEG’s assistance in explaining the miscalculation to customers, but NYSEG refused its request.

Advantage has requested that the Commission require third party oversight to review NYSEG’s calculations on a monthly basis at NYSEG’s expense and that an independent audit of all monthly RAC calculations since January 2003 be performed. Advantage requests collections costs associated with recovery of the misdirected refunds as well as the differential between the total amount of misdirected refunds paid to Advantage customers and the amount Advantage is actually able to collect. Advantage also requests the Commission impose penalties on NYSEG for failure to comply with Commission-ordered RAC calculation requirements.

The full text of Advantage’s Petition for Investigation and Action is available on the NEM Website.

Comments Requested on Staff Competitive Metering Report and Proposals

Staff issued a Competitive Metering Report proposing that: 1) barriers to utility investment in advanced metering be removed to promote metering infrastructure needed to support time-differentiated rates and to encourage demand responsive behavior; and 2) all market participants should have unfettered access to meter data on a real-time basis. With respect to gas customers, eligibility for competitive metering data services should initially be offered to customers with annual consumption of 5,000 dekatherms and above. Electric customers at 50kW and above should still be permitted to own their meters, but Staff did not see reason to expand eligiblity for meter ownership at this time.

Staff notes that interoperability to facilitate data access is critical and can be achieved through flexible hardware and software solutions. For the least densely populated areas, advanced meters that permit intelligence and data storage may be necessary whereas less sophisticted meters with AMR polling capability may be more appropriate in more densely populated areas. At the network level, products that use open architectures and are widely available should be used. A collaborative should study the most appropriate data transfer protocols, including EDI, XML or other web-based services.

Staff proposed that utilities be permitted to continue to deploy AMR technology, but the appropriateness of using solid state modular meters rather than retrofitting electromechanical meters for electric service should be considered.

Staff found that it is premature to recommend a specific Broadband over Power Line or Power Line Communication policy at this time and that a collaborative should be formed to study available technologies.

Staff also noted that the federal Electric Modernization Act required state Commissions to investigate and determine whether a new federal standard regarding smart metering should be implemented. The federal standard would require utilities to offer time-based meters and time-based rates to all customers. Staff said its Report should be viewed in light of this federal requirement.

Comments on Staff's Report are due October 24, 2005. The full texts of Staff's Competitive Metering Report and the Notice Requesting Comments are available on the NEM Website.

Central Hudson Files Proposed Energy Switch Program

Central Hudson filed a proposed Energy Switch program. The program will provide residential and small commercial customers with an opportunity to try competitive energy supply alternatives at a 7% discount during an introductory period limited to two billing cycles. Customers enrolled in the program will be issued Central Hudson consolidated bills with ESCO charges shown on the bill. All electric residential customers and non-demand commercial customers who are not presently buying from an alternate supplier are eligible to participate. All gas residential customers and commercial customers whose annual usage does not exceed 5,000 ccf, and who are not presently buying from an alternate supplier are eligible to participate. Central Hudson requested that the program be approved for implementation on December 1, 2005. The full text of Central Hudson's Filing is available on the NEM Website.

NFG Filing on HEFPA Suspension Fees

As directed by the Commission, NFG filed updated suspension fees to be charged to marketers. NFG calculated the charge to effect a physical suspension of a customer at $86. A separate charge of $17 was calculated for the cost of attempting customer suspension. The full text of NFG's Filing is available on the NEM Website.

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