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Vectren Source
March 7, 2003
Vectren Source Joins NEM

NEM is pleased to announce that Vectren Source has joined the association. Vectren Source is a non-regulated subsidiary of Vectren Corporation, a $2 billion corporation serving nearly 1 million energy customers throughout Ohio and Indiana. Vectren Source concentrates its efforts on residential and small business customers allowing them to provide value-added energy product and service solutions that are specific to the needs of homeowners and entrepreneurs. Vectren Source will be represented within NEM by Lawrence K. Friedeman, Vice-President of Commodity Operations and Regulatory Affairs for Vectren Retail LLC, d/b/a Vectren Source.

NEM's Annual Membership Meeting and National Restructuring Conference for 2003

This year’s Annual Membership Meeting and National Restructuring Conference will be held April 3 and 4, 2003, at the Hyatt Regency on Capitol Hill. Congressman Joe Barton, Chairman of the House Energy & Air Quality Subcommittee, Chairman Patrick Wood of the FERC, Chairman James Newsome of the CFTC, SEC Commissioner Campos, NARUC President David Svanda, Chair Klein of the TX PUC, Chairman Vasington of the MA DTE, Chair Spitzer of the ACC, and Commissioner Jones of the PUCO are all confirmed to be speakers at the event.

Our VIP reception will be held in the Senate Russell Caucus Room on the evening of April 3, 2003. This is one of the nicest rooms in the Capitol. Many thanks to LODESTAR, Itron, IMSERV and Constellation NewEnergy for sponsoring the reception.

The Agenda is hotlinked here for your convenience. A registration form is also hotlinked here for your convenience.

Speakers at NEM's April Conference - Presentation Materials Needed

Those NEM members that will be speaking at the April conference should forward to headquarters any presentations or other materials in electronic format that they intend to utilize ASAP. The materials will be posted on the NEM Website for access by the media, regulators, attendees, and other interested parties.

NEM's Summer Executive Committee Meeting

Phil O'Connor of Constellation New Energy has generously offered to host the June 30 Executive Committee Meeting in Chicago. We normally select our leadership for the coming year at this meeting and review the most important issues in each region.

All members are encouraged to nominate chairs, co-chairs and members for national, regional, state and issue specific policy devlopment teams including the national PR team.

Please also advise headquarters what new policy development teams will need to be created to address the issues that NEM will likely face in 2004

NEM Issues Price-to-Beat Matrix

NEM has expended considerable staff time and resources to prepare a price-to-beat matrix for the key states in which our members do business. It required research and analyses of volumes of tariff materials that members traditionally either have in-house staff prepare or pay significant sums to outside contractors. The analysis is being provided to get your feedback on NEM member interest in providing this level of detailed, competitively important information on a regular basis. We would appreciate your recommendations as to modifications or additions to the matrix and its value to you as an NEM member. Members interested in obtaining a copy of the Price to Beat Matrix should contact NEM headquarters.

NEM Conference Call on Retail Marketing and Related Technology Implementation Issues

NEM is convening biweekly conference calls to discuss retail marketing and related technology implementation issues. The next call will be held Thursday, March 13, 2003. Please note that the time has been changed to 3PM EST. The call will focus on the development of an NEM public relations campaign on the benefits of competition. The dial-in number is 703-788-0600, and the pass code is 209353. An agenda for the conference call will be circulated prior thereto.

NEM Conference Call on Wholesale Marketing, Clearing, Risk Management and Related Technology Issues Scheduled

NEM will convene a conference call on Wholesale Marketing, Clearing, Risk Management and Related Technology Issues on March 19, 2003, at 2PM EST. An agenda including issues to be discussed will be circulated prior to the call. The phone in number for the conference call is 1-703-788-0600, and the passcode is 209353

Barton Releases Draft Energy Legislation

Congressman Barton has released draft energy legislation, entitled "The Energy Policy Act of 2003," that will be the subject of House Energy Committee hearings next week. The Barton draft includes an electricity title that would: 1) require a FERC rulemaking on incentive-based and performance-based rate treatments to promote capital investments in transmission infrastructure; 2) institute a process whereby the Secretary of Energy would identify "interstate congestion areas," and FERC would have the authority to issue permits for transmission facilities in those areas; 3) require open access to transmission services by "unregulated transmitting utilities;" 4) provide that all transmitting utilities should voluntarily participate in RTOs; 5) give FERC jurisdiction to approve reliability standards proposed by an Electric Reliability Organization; 6) repeal PUHCA; 7) require electric utilities and third party marketers to provide real-time and time-of-use rate options to requesting customers so they may use real-time or time-of-use metering; 8) require electric utilities to offer net metering; 9) require a FERC rulemaking to establish an electronic information system to facilitate price transparency; 10) prohibit round-trip trading; 11) increase civil and criminal penalties for violations of the Federal Power Act; and 12) require FTC rulemakings to: a) protect electric consumers from disclosure of information obtained in connection with the sale of delivery of electric energy; and b) prohibit slamming and cramming.
The Barton draft would also: 1) institute a program for ultra-deepwater and unconventional natural gas and other petroleum resource exploration and production; 2) institute a program to develop hybrid distributed power systems; 3) require the filling of the Strategic Petroleum Reserve to full capacity, which is to be expanded to 1 billion barrels; and 4) provide for construction and operation of an Alaska natural gas pipeline project.

The full text of Barton's Draft Energy Legislation is available on the NEM Website.

Domenici and Campbell Introduce the "Native American Energy Development and Self-Determination Act of 2003"

Senator Campbell and Senator Domenici introduced the "Native American Energy Development and Self-Determination Act of 2003," amending the Energy Policy Act of 1992, to assist Indian tribes in developing energy resources. The bill would establish and implement an Indian energy resource development program to assist Indian tribes in developing energy resources. To carry out the program, development grants would be given to Indian tribes for use in developing or obtaining the managerial and technical capacity needed to develop energy resources on Indian land. Additionally grants would be provided to Indian tribes for use in carrying out projects to promote the vertical integration of energy resources, and to process, use, or develop those energy resources, on Indian land. The Bill would also establish the Indian Energy Resource Commission which would consist of eight members.

Within two years after the date of enactment of the Native American Energy Development and Self-Determination Act of 2003, and every 2 years thereafter, the Secretary shall submit to the Committees on Energy and Commerce and Resources of the House of Representatives and the Committee on Energy and Natural Resources and the Committee on Indian Affairs of the Senate a report on energy development potential on Indian land. The report would identify barriers to the development of renewable energy by Indian tribes (including legal, regulatory, fiscal, and market barriers) and include recommendations for the removal of those barriers. The full text of the Native American Energy Development and Self-Determination Act of 2003 is available on the NEM Website. "

Feinstein Introduces "Energy Market Oversight Act"

Senator Feinstein introduced S.509, the ""Energy Market Oversight Act,"" this week. The bill would restore CFTC's oversight over online and bilaterals energy and metals trading. The bill would also increase FERC's authority to investigate and assess penalties for fraud and manipulation.

A press release on the legislation is available at: The full text of S.509 will be posted on the NEM Website when made available electronically.

Commissioners Testify on Barton Energy Legislation

FERC Chairman Wood and Commissioners Brownell and Massey testified before the House Subcommittee on Energy and Air Quality this week on Congressman Barton's draft energy legislation. Wood and Massey both supported the provision on a FERC rulemaking to institute an electronic information system to promote price transparency in wholesale electric markets and urged that the provision be modified to explicitly authorize the Commission obtain information on natural gas prices as well. All of the Commissioners supported increased penalties for Federal Power Act violations and opposed eliminating FERC's merger review authority. Commissioners Brownell and Massey noted their support for the provisions granting FERC backstop authority to site interstate transmission lines, requiring open access for all "transmitting utilities," and providing incentive and performance based rates for transmission investment.

Commissioner Massey stated that Congress should require the formation of RTOs. He also said FERC should be given direct authority to remedy market power in wholesale markets as well as retail markets when state commissions lack the requisite authority to act. Massey said the Commission must investigate the causes of price run-ups in the natural gas markets. He noted that, "the Commission will probably adopt minimum standards for the natural gas price indices used in pipeline tariffs or new contracts. We will sponsor a technical conference this spring to explore price index issues and various proposed remedies."

The full texts of Chairman Wood's Testimony, Commissioner Brownell's Testimony, and Commissioner Massey's Testimony are available on the NEM Website.

Consumers Energy's Stranded Cost and Securitization Bond Filings

Consumers Energy filed an application for approval of its net stranded costs for the year 2002 and a charge to recover those costs in 2004. Consumers proposes different stranded cost charges dependent upon the Commission's treatment of Clean Air Act and Palisades Nuclear Plant costs. Consumers filed a separate application for issuance of securitization bonds to recover these costs. Consumers proposes that: 1) if the Clean Air Act costs and Palisades capital investments are securitized that it be permitted a stranded cost recovery charge of $0.008867; 2) if only the Clean Air Act costs are securitized that it be permitted a stranded cost recovery charge of $0.012452; and 3) if neither the Clean Air Act costs nor the Palisades capital investments are securitized that it be permitted a stranded cost recovery charge of $0.025821. The full texts of the Stranded Cost Recovery Application and the Securitization Bond Application are available on the NEM Website.

New York
ConED Soliciting Bids for Pilot DG Projects

Con Edison will be soliciting bids for pilot DG projects. The completion of a Request for Information (RFI) questionnaire is required so that Con Edison may qualify potential DG resource providers. Respondents who were approved for the DG RFP in 2002 are likely to be pre-qualified based upon their responses in 2002. Only pre-qualified companies will be eligible to receive the subsequent RFP from Con Edison. All responses must refer to the primary DG company that is intending to provide DG services as the “Respondent” and not their holding or subsidiary/affiliated companies. Completed responses must be returned by no later than 4:00 p.m. eastern time on May 16, 2003. Con Edison will notify all Respondents of the results on or about May 23, 2003. Additional information regarding the RFP process will be posted on its Website. The full text of the ConEd RFI is available on the NEM Website.

NYPSC Issues Notice Soliciting Comments on Proposed Modifications to the UBP

The NYPSC issued proposed revisions to the Uniform Business Practice rules to "strengthen requirements for discontinuance of an ESCO’s participation in retail access programs and reduce security requirements for ESCOs, clarify procedures for changing service providers, strengthen the process for dispute resolution, organize the UBP into sections, and eliminate duplicative, out-of-date or unnecessary provisions." It is proposed that the revised UBP document replace previously issued UBP provisions in their entirety. Comments on the revisions are due April 7, 2003, and reply comments are due by April 14, 2003. The Proposed Revisions to the UBP and the Notice Soliciting Comments are available on the NEM Website.

Commission Institutes Proceeding on Calculation of Net Stranded Costs

The Commission instituted a proceeding to examine the calculation of net stranded costs. The Commission has issued a series of questions for comment as follows: 1) how to define "stranded costs;" 2) how to define "just and reasonable net stranded costs;" 3) what should be the methodology for computing "just and reasonable net stranded costs;" 4) how should stranded costs be recovered; 5) how should over- or under-recovery of stranded costs be dealt with; and 6) statutory constraints on the stranded cost calculation methodology. Comments are due March 21, 2003. Those interested in participating in the workgroup must notify the Commission by March 14, 2003, and the first working group meeting will be held April 1, 2003. The full text of the Order is available on the NEM Website.

SCC Issues Order Inviting Comments on Proposed Competitive Metering Rules

Staff has issued a report and proposed rules on electric meter ownership for industrial and large customers. By the terms of the proposed rules, customer ownership of the meter would consist of financial ownership and would result in a back-out credit on the customer's bill. However, the utility would continue to have full electronic and physical access to the meter whereas the customer will have read-only access to the meter. The utility will continue to be obligated to perform testing, replacement, customer accounting, reading and data management functions. Comments on Staff's report and proposed rules are due April 16, 2003. The full texts of the Order Inviting Comments and Staff's Report and Proposed Rules are available on the NEM Website.

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