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December 13, 2004
Infinite Energy Nominated to Executive Committee

NEM is pleased to announce that Infinite Energy has been nominated to the NEM Executive Committee. Infinite Energy markets wholesale and retail energy products. Infinite Energy will be represented within NEM by Jeff Traynham, General Counsel, and Michael D’Angelo, Director of Regulatory Affairs.

NEM's Annual Winter Policy, Planning and Development Meeting, Chicago (January 19-20, 2005)

NEM's Annual Winter Executive Policy, Planning and Development Meeting for 2005 will be held on January 19-20, 2005 at Constellation NewEnergy's offices in Chicago. Many sincere thanks to Katie Papadimitriu and Constellation as well as to Peter Weigand and Ian Carter of Commerce Energy Group for their generosity in offering to host the meeting.

The Winter Executive Committee Meeting is important in many respects. NEM's Executive Committee members establish the association's priorities among states, utilities, issues and positions for NEM's advocacy in 2005. Please use the following hotlinks to view NEM's Issues Lists for the following topics: wholesale issues, retail issues and technology issues.

Issues identified for NEM advocacy in 2005 include: Politically Acceptable Accelerated Migration Timing, Method and Strategies; Consolidated Utility Billing; Consolidated Retailer Billing; Proper Timing, Structure and Purpose of Retail Auctions; as well as the Formation of working groups to develop a portfolio of cost-effective regulatory approaches to accelerate customer migration.

Policy Chairs are requested to sumbit their recommended agenda items to headquarters no later than COB Thursday, December 16, 2004 so that a draft agenda can be circulated by Friday, December 17, 2004. Please use this hotlink to sign up for the event. The attire will be casual and all attempts will be made to get us out in one day.

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. Many thanks to Centrica, Commonwealth Energy, ESG, Excelergy, Interstate Gas Supply, Itron, Proliance and SAP for offering to sponsor this event. Sponsorship ads and logos are due for advertisements as soon as possible. Suggested topics and speakers should also be sent to headquarters no later than Wednesday, December 15, 2004. FERC Chairman Patrick Wood, Commissioners Brownell, Kelly and Kelliher in addition to CA Deputy Secretary of Energy Joseph Desmond, NYPSC Chairman William Flynn and MADTE Chairman Paul Afonso have already confirmed to speak. Governor Schwartzenegger and Chairman Alan Schriber from Ohio, and high-ranking Administration officials have also been invited.

Please use this hotlink to register for the event.

Commission Held Technical Conference on Market-Based Rates

FERC held a technical conference to explore two of the four prongs it uses to determine whether to grant market-based rate authority - vertical/transmission market power and other barriers to entry. Panelists discussed the advantages and disadvantages of behavioral and structural remedies for market power as well as problems such as some transmission owners not being bound by FERC protocols. Several panelists proposed joint planning and joint ownership of transmission while others focused on how inadequate transmission drives competitive suppliers away from certain communities. The full text of NEM's Analysis is available on the NEM web site. A second conference, discussing the other two prongs - affiliate abuse and generation market power - is scheduled for January 27-28, 2005.

Commission Seeks Comments on Natural Gas Pipeline Discounts

The Commission wishes to examine the propriety of its own policy that allows pipelines to adjust their ratemaking throughput downward to reflect discounts given by pipelines for competitive reasons. Under Order 436, pipelines are allowed to discount to meet competition, provided they do so in a non-discriminatory fashion. The Commission wishes to determine how these selective discounts affect the pipeline's captive customers. Likewise, the Commission seeks comments concerning a possible elimination of the discount adjustment in cases for gas-on-gas competition and alternative policy choices that would minimize effects on captive customers. Comments are due by January 31, 2005. The full text of the Notice is available on the NEM web site.

NYISO Submits Compliance Filing on Demand Response Programs and Addition of New Generation

While NYISO has established three demand response programs - emergency demand response program, day-ahead demand response program and installed capacity/special case resources - none of these programs were utilized during the Summer 2004 capability period because of unusually cool weather.

NYISO believes it will face a 3MW deficiency for the Summer 2005 capability period. Likewise, NYISO plans to meet the 77MW shortfall of in-city locational installed capacity by both new units and new Special Case Resources. 2,300MW of capacity, in the form of five previously authorized projects, are scheduled to be in service from fourth quarter 2004 - 2006. However, NYISO expresses concern that net revenues continue to be below the cost of entry for new resources, and plans to continue developing innovative solutions to help developers finance new projects. The full text of the Filing is available on the NEM web site.

NYISO Submits Compliance Filing on Settlement and Customer Credit Policies

In NYISO's compliance filing, it stated that it believed its current customer credit risk policies are appropriate. However, in its continuing efforts to best balance the company's credit risk with its customers credit requirements, it has met with stakeholders on five occasions. To shorten the settlement cycle from a month to a week, NYISO has entered into weekly prepayment agreements with several of its customers. NYISO stakeholders have also approved a tariff amendment that would allow municipal electric systems in New York to aggregate their unsecured credit. NYISO is also developing a provision to lower collateral requirements for virtual transactions. Finally, NYISO's paydown option allows a market participant's collateral requirements to be calculated upon the forthcoming month, rather than on a historical basis, provided that the entity agrees to pay down amounts owed to NYISO on demand. The full text of NYISO's Filing is available on the NEM web site.

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NEM Conference Call Scheduled to Discuss Default Service in Post-Transition Period

On March 1, 2005, the day after Massachusetts’ seven-year transition period ends, all remaining standard offer customers will become default service customers. Because most customers are served under standard offer service, the Department is seeking comments on ways to encourage the development of an active retail competitive market for all customers and to increase benefits to smaller customers, specifically. Broadly, the Department wishes to explore three areas: whether smaller customers would benefit from an increased number of solicitations for default service supply, a longer default service supply procurement term and/or a statewide procurement process for default service load.

NEM will convene a conference call on December 16, 2004, at 2PM EST to formulate its response. The conference call number is 703-788-0600 and the passcode is 209353. The full text of the Request for Comments is available on the NEM web site.

New Jersey
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Board Releases Procurement Information for 2005 BGS Auction

The Board approved simultaneous descending clock auction processes for the procurement period beginning June 1, 2005. This is similar to previous auctions, and the Board anticipates using the same process for the procurement period beginning June 1, 2006 as well.

The BGS-CIEP auction will consist of a 12-month procurement period, and the Board will continue the "slice of the system" method for the BGS-FP auction. The Board set the default supply service availability charge at $.00015/kWh for BGS-CIEP and increased the cost of ancillary services in CIEP tariffs by $1/MW. Beginning June 1, 2005, all commercial and industrial customers with a Peak Load Share (PLS) of 1250kW and greater will be included in the CIEP class. To help educate new members of the CIEP class, the Board ordered its customer education campaign to continue to educate customers with a PLS of 750kW and above about hourly pricing. Finally, the retail margin, currently set at 5 mills/kWh, was approved (for all BGS-CIEP customers and BGS-FP customers with a PLS of 750kW or greater) from June 1, 2005 - May 31, 2006.

The Board also ordered that the following auction information must be kept confidential: EDC-specific starting prices, indicative offers, auction manager's logic processes and algorithms (to determine minimum and maximum prices), round prices and individual bids and bidder information. The full text of the Procurement Order is available on the NEM web site. The full text of the Confidentiality Order is also available on the NEM web site.

NEM Analysis of Electric Tariff Provisions

NEM has completed a detailed analysis of the following electric tariffs: ACECO, JCP&L, PSE&G and RECO. Current analysis is also available for the 2005 BGS Auction. Copies of the analyses are available from NEM Headquarters upon request. The tariff analyses are also available to members on the NEM web site.

New York
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Commission Seeks Updated Information for ESCO Power to Choose Comparison Chart

The Commission is currently updating its comparison chart, rolled out last month, to reflect price information as of December 1, 2004. The chart has already attracted much attention from the media and is being utilized heavily by consumers. ESCOs are requested to provide specific rate information early this week, especially those in the RG&E service territory. Questions may be directed to Alice Miller ( or Ron Cerniglia ( Access the Commission's comparison chart here.

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Commission Rejects Bid in FirstEnergy Auction

Though bids were placed for all 9,000MW of load, the Commission rejected the closing price of $54.50, which was only slightly less than the starting price of $55. The Commission has instituted an RSP for 2006. However, even though the auction failed this year, the Commission has decided that the market can supply FirstEnergy's demand and will institute another auction next year. The full text of the Order with NERA's redacted report attached is available on the NEM web site.

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Commission Seeks Comments on New Minimum Stay Requirements and Wires Charges

New statutes require that large commercial and industrial customers who return to utility service and do not wish to be bound by the 12-month minimum stay period may pay market-based costs as an alternative. Likewise, large C&I customers may also avoid paying wires charges if they agree to pay market-based rates when returning to utility service. Now, to implement the exemptions, each utility that imposes a minimum stay requirement and/or wires charge must file a compliance plan containing proposed market-based costs by January 10, 2005. Comments may be filed regarding whether or not electric distribution cooperatives must implement the new programs and will be due by February 7, 2005. The full text of the Order is available on the NEM web site.

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