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November 5, 2004
NEM's Annual Winter Policy Development Meeting -January 19 & 20, 20005

NEM's Winter Executive Planning and Policy Development Meeting for 2005 will be held in Newport Beach, California on January 19-20, 2005. Joe Desmond has accepted an invitation to address the Executive Committee on the Issue of Information Standardization and Advanced Energy Technologies. The Agenda will include NEM member priorities for States, Utilities, Issues and Positions for NEMís advocacy in 2005.

Issues identified by members for consensus include Accelerated Migration Strategies, Consolidated Utility Billing, the Single Retailer Model; the proper timing and structure of retail auctions, and the formation of working groups to develop a national model for accelerated migration strategies.

Member recommendations will be sought on the formation of Nomination, Budget and Recruitment Committeesas well as the identification and recruitment of Industry Leaders to serve on the NEM Board of Directors, the Retail Policy Council and the recruitment of selected utilities into the organization to work closely with members to develop a national model for accelerated migration in a equitable, expeditious and reliable manner that engenders consumer confidence and support.

Many thanks to Peter Weigand and Ian Carter of Commonwealth Energy (now called Commerce Energy Group) for offering to host this event. The Hotel and signup site will be provided this week.

NEM's Annual Restructuring Conference -April 26-27, 2005

NEM's Annual Spring Membership Meeting and Restructuring Conference will be held at the Marriott Metro Center on April 26-27, 2005. in Washington, DC, . Please email or call headquarters if you wish to speak at or sponsor this event. Agenda items should also be sent to headquarters at your earliest convenience. FERC Chairman Patrick Wood, Commisioners Brownell, Kelly and Kelliher in addition to CA Deputy Secretary of Energy Joe Desmond and NYPSC Chairman William Flynn have already confirmed to speak, Governor Schwartzenegger and High Ranking Administration Officils have also been invited.

Please use this hotlink to register for the event.

NEM Analysis of 30 Years of EIA Natural Gas Transportation and Delivery Price Data

NEM conducted an analysis of the average natural gas prices delivered to each class of customer - residential, commercial and industrial - and found that price controls led to increased prices, which only decreased following the repeal of the controls. NEM, like the Fraser Institute, found that price competition, or merely its potential, imposes significant market discipline on prices. In fact, prior to restructuring, natural gas prices had been increasing between 15 - 48% for industrial customers. In 1983, these increases literally stopped as restructuring began. Interestingly, as price competition reduced interstate transportation rates, distribution rates and distribution margins continued to climb and absorb the price decreases from the interstate monopoly. Therefore, despite lower wellhead prices and decontrolled interstate transportation, margins received by local distribution monopolies actually increased unabated for the entire 30-year period. NEM charts are available for the following customer classes: Residential (National and Ohio), Commercial (National and Ohio) and Industrial (National and Ohio) on the NEM web site. Likewise, the full text of the NEM Press Release is available on the NEM web site.

Fraser Institute Releases Report on Electric Deregulation

The Fraser Institute states that deregulation can reduce prices for customers in states that have not restructured by between 7-9% over five years. The report also shows that restructured states attract more generation - 80% faster growth - than non-reforming states. The Fraser Institute recommends full competition for generation and distribution, competitive billing and metering and increased customer education, along with full recovery of stranded costs and removing an automatic default provider. The full text of the Report is available on the NEM web site.

Workshop to Discuss Transition from North American Electric Reliability Council to Electricity Reliability Organization

The workshop, supported by FERC, DOE and the Federal-Provincial-Territorial ADM Electricity Working Group will explore issues related to the transition to the proposed ERO. The goal of the conference is for parties in Canada and the U.S. to come to agreement on the basic issues surrounding transition to ERO before Congress enacts reliability legislation. The workshop will take place December 8, 2004 in Toronto, Ontario. The full text of the announcement is available on the NEM web site.

FCC Issues Final Broadband over Power Line Rulemaking

The FCC adopted new rules for Access Broadband over Power Line, in order to increase competition and to provide a framework for rapid introduction of BPL systems. The FCC defined Access BPL as the following: a carrier current system installed and operated on an electric utility service as an unintentional radiator that sends radio frequency energy on frequencies between 1.705 MHz and 80 MHz over medium voltage lines or low voltage lines to provide broadband communications and is located on the supply side of the utility's service's points of interconnection with customer premises. Importantly, the FCC ordered that BPL ownership be open to competition and not exclusively available to electric utility operators. In its order, the FCC held, "we believe that an independent BPL provider can take the same steps and precaustions as an electric utility operator in working with its equipment vendor, the power system, and licensed radio users to ensure that an Access BPL system does not cause harmful interference and to resolve any interference." The full text of the Order is available on the NEM web site.

Georgia
NEM Analysis of Gas Settlement Provisions

NEM has compiled a detailed analysis of gas settlement provisions. NEM provides analysis of AGL and Atmos Energy gas tariffs. Copies of the analyses are available from NEM Headquarters upon request. The analyses are also posted on the NEM web site, but are available for members only.

Maine
NEM Analysis of Electric and Gas Settlement Provisions

NEM has compiled a detailed analysis of electric settlement provisions. NEM provides analysis of Central Maine Power, Bangor HydroElectric and Maine Public Service electric tariffs. Likewise, NEM provides analysis of Northern Utilities and Bangor Gas gas tariffs. Copies of the analyses are available from NEM Headquarters upon request. The analyses are also posted on the NEM web site, but are available for members only.

Maryland
Consumer Protection Regulations Proposed

Maryland has proposed consumer protection regulations concerning contact between utilities, consumers and competitive suppliers of both gas and electricity. The regulations prohibit suppliers from refusing service to a customer based upon the economic character of his geographic area, though a supplier may refuse service based on the customer's credit history. Any disclosure of a customer's billing, payment or credit information by a supplier must be done for the purpose of facilitating billing and with the customer's consent. Customer consent is likewise required for supplier enrollment. Suppliers may advertise online, and may enroll customers telephonically subject to the requirements of the state's consumer protection laws or electronically over the internet. The regulations provide penalties for improper enrollment through the Office of External Relations. The regulations also provide that a utility may not terminate service to a customer who does not pay his supplier charges. Finally, the regulations provide for the following payment allocation order: 1) Gas utility service arrearages, 2) Electric utility service arrearages, 3) Gas supplier arrearages, 4) Electric supplier arrearages, 5) Gas utility service current charges, 6) Electric utility service current charges, 7) Gas supplier current charges, 8) Electric supplier current charges, and 9) Charges for other services. The proposed regulations were published October 15, 2004. Comments are due by November 15, 2004. The full text of the Proposed Regulations is available on the NEM web site.

New Jersey
New Stage of BGS Auction Initiated

The fourth BGS auction will take place in February 2005 and will consist of two descending clock auctions, one for hourly priced service for large industrial and commercial accounts and the other at fixed price for all other customers. Service auctioned off will begin on June 1, 2005, and will consist of approximately 2800 MW for the large C&I customers wth 5300 MW for fixed price customers, which is approximately, one third of the demand in the fixed price market.

Customers with 1250 kW must now subscribe to hourly service, a decrease from the previous 1500 kW threshold. The Commission has established a working group to assist these customers in the transition to hourly service. In addition, the Commission is examining the retail margin of 5 mills/kWh assessed on all customers with a peak demand of more than 750 kW. The full text of the release is available on the NEM web site.

New York
Commission Sets Suspension Fees for ESCOs and Utilities

The Commission has held that when an ESCO requests suspension of delivery service under HEFPA, the utilities may request "reasonable compensation" for costs incurred in the shut-off. The Commission concluded that the utilities' proposed suspension fees should be set temporarily at reconnection charges for residential customers in current tariffs. The suspension fees will be replaced in the utilities' next rate filings or extensions of rate plans. Though the fees may be adjusted for inflation, the Commission elected to set the suspension fees at this level because of an absence of a current embedded cost study.

Agreeing with NEM, the Commission held that the suspension fee should be split between an ESCO and a utility when the shut-off is performed on behalf of both. Finally, the Commission has temporarily accepted utilities' bill calculation fees. These fees arise when calculating the lesser of the full amount of ESCO commodity arrears or what the utility commodity charge would have been as required when a residential customer wants to stop an ESCO-initiated suspension, and they will be reviewed in each utility's next rate case or extension. The full text of the Order is available on the NEM web site.

Ohio
Columbia Gas Seeks Authority to Disconnect CHOICE Customers for Nonpayment to Marketers

Columbia has filed an application to initiate termination of service for CHOICE customers who fail to pay for the commodity portion of their bills, noting that a mandatory return to sales service does not provide a strong enough incentive. Currently, a CHOICE customer who does not pay his bill for 30 days must be returned to sales service (with 60 days of unpaid marketer service), before Columbia may initiate termination.

This new procedure would only apply in cases in which Columbia purchases the accounts receivable of the supplier. Because Columbia purchases receivables at no discount, it argues that it solely bears the risk of arrearages. Therefore, to reduce overall system arrearages, this new procedure would ensure that sales customers and CHOICE customers are treated identically in termination proceedings. Columbia has also offered to submit a report comparing the number of actual terminations with the number of termination notices issued for both CHOICE and sales customers between November 1, 2005 and November 1, 2006. The full text of the Application is available on the NEM web site.

Pennsylvania
NEM Analysis of Electric and Gas Settlement Provisions

NEM has compiled a detailed analysis of electric settlement provisions. NEM provides analysis of Allegheny Power, Duqesne, FirstEnergy and PECO electric tariffs. Likewise, NEM provides analysis of Columbia, Dominion People's, Equitable, NFG and PECO gas tariffs. Copies of the analyses are available from NEM Headquarters upon request. The analyses are also posted on the NEM web site, but are available for members only.

Texas
NEM Analysis of Electric Settlement Provisions

NEM has compiled a detailed analysis of electric settlement provisions. NEM provides analysis of Texas New Mexico Power, TXU, Texas Central, Texas North and Centerpoint electric tariffs. Copies of the analyses are available from NEM Headquarters upon request. The analyses are also posted on the NEM web site, but are available for members only.


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