Please register early for NEM's Annual Membership Meeting and National Restructuring Conference. It will be held on March 31 and April 1, 2004, in Washington, DC at the Capitol Hyatt. House Energy and Air Quality Subcommittee Chairman Barton, FERC Chairman Wood, CFTC Chairman Newsome, FERC Commissioner Brownell, CFTC Commissioner Brown-Hruska, NARUC President Wise, NJBPU President Fox, ICC Chair Hurley, NARUC BPL Committee Chair and MIPSC Commissioner Chappelle have all confirmed that they will be presenting keynote addresses at the NEM event.

If you wish to sponsor this event, please use this hotlink and contact headquarters. Harts Magazine has offered to do a special section featuring our VIP sponsors. You may view the agenda and register for the event by using this hotlink. Registration Information is also available on the NEM Website.

The Winter Executive Committee Policy and Planning Meeting was held January 20th and 21st, 2004, in Houston, Texas. CEOs from 40 member companies in the US and Canada attended the meeting to address the industry's priorities for 2004. Separate retail, wholesale, and technology issue identification break out sessions provided a number of significant insights into the current state of the industry and its likely direction for 2004. Reports from NEM members were very encouraging and the upcoming year looks promising. A summary NEM Year End Review is available on the NEM Website. NEM's Retail Issues, Wholesale Issues, and Technology and Services Issues for 2004 are also available on the NEM Website. A detailed report on NEM's issues and priorities for 2004 will soon be available.

Starks Gas Storage is seeking customers to contract for storage capacity at its planned storage facility in Louisiana. An open session is planned from February 17 to March 5, 2004. Additional information is available at (403) 645-3044 or (713) 320-0561 or at www.encanastorage.com.

FERC proposed a rule to require interstate natural gas pipeline companies to follow standardized procedures for determining the creditworthiness of their shippers. The proposal would incorporate by reference 10 standards developed voluntarily at the Commission’s request by the Wholesale Gas Quadrant of the North American Energy Standards Board (NAESB). The proposed rule also would adopt additional regulations pertaining to the creditworthiness of the pipelines.

FERC stated that pipeline tariff provisions on creditworthiness are not consistent or uniform and that such differences could be at odds with the goals of creating a seamless and integrated pipeline grid. The proposed rule addresses a range of creditworthiness issues including: (1) standards for financial data and other information that shippers will be required to provide pipelines to establish creditworthiness; (2) a requirement that pipelines’ creditworthiness determinations be made on the basis of objective and transparent criteria; (3)collateral requirements for service on existing facilities as well as service obtained through pipeline construction; (4) timelines for suspension and termination of service; and (5) proposed standards governing capacity release transactions.

Comments are due 30 days after publication in the Federal Register. The full text of FERC's Proposed Standards will be on the NEM Website as soon as it is available in electronic form.

In an initial decision, administrative law judge (ALJ) Cintron approved the proposed sale and transfer from Ameren Energy Generating Company (AEG) to AmerenUE of transmission and generating facilities associated with certain of AEG's generation assets. AEG is an exempt wholesale generator and AmerenUE is a franchised utility. The ALJ held that the transaction does not have an adverse effect on competition. The ALJ found that there is no evidence of affiliate abuse and that AmerenUE's proposed purchase of its affiliate's plants is on terms similar to any other competitive alternatives available.

It was argued that AEG prevailed over more efficient competitors not on the merits of its product, but because of its affiliate relationship with AmerenUE. It was also argued that the proposed transaction would remove 540 MW of capacity from competition. ALJ Cintron held that the proposed transaction does not affect the relevant market concentration merely because demand is removed from the wholesale market and that the argument that wholesale competitors have lost the ability to compete for the load which will be served by the acquired plants is misguided. The ALJ noted that: (1) FERC has already granted both AmerenUE and AEG market-based rate authority indicating that Ameren's wholesale markets are workably competitive; and (2) Ameren has demonstrated that it will not be able to recover an acquisition premium from its ratepayers. Therefore, the ALJ found that the proposed transfer does not have an adverse affect on competition.

It was also argued that by transferring excess generation from AEG to its regulated affiliate, Ameren could serve captive retail load without "fear of competition." ALJ Cintron, in light of the fact that FERC's merger policy is that it will not consider issues of retail competition unless the state regulatory body affected is unable to do so, found that the proposed transaction did not create a "safety net" for affiliated merchants. The full text of ALJ Cintron's Initial Order is available on the NEM Website.

FERC approved with conditions the Southwest Power Pool’s (SPP) proposed RTO. FERC’s approval is conditioned on SPP taking the additional steps required to complete the details of its plan.

To better conform to the provisions of Order No. 2000, the Commission directed SPP to: (1) Implement its independent board and modify its governance structure; (2) Expand the coverage of SPP’s tariff to assure that SPP is the sole transmission provider; (3) Obtain clear and sufficient authority to exercise day-to-day operational control over appropriate transmission facilities; (4) Have an independent market monitor in place; (5) Obtain clear and precise authority to independently and solely determine which project to include in the regional transmission plan; and (6) Have a seams agreement with MISO on file.

Arkansas-based SPP has 50 members, including a broad range of participants, from investor-owned utilities, a federal power marketing agency, independent power producers and power marketers. SPP serves more than 4 million customers in all, or parts of, Arkansas, Kansas, Louisiana, Mississippi, Missouri, New Mexico, Oklahoma, and Texas. The full text of the FERC Order is available on the NEM Website.