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April 28, 2004
SAP Nominated to NEM Executive Committee

NEM is pleased to announce that SAP has been nominated to the Executive Committee. Founded in 1972, SAP is the recognized leader in providing collaborative business solutions for all types of industries and for every major market. SAP is the world's largest inter-enterprise software company, and the world's third largest independent software supplier overall. SAP will be represented within NEM by James Menton, Utilities Principle for SAP America.

NEM's Summer Executive Committee Meeting

NEM has reserved June 29th and 30th, 2004, at Constellation NewEnergy's offices for its Summer Executive Committee Meeting. The Summer Meeting is critical as it is the venue where the new Executive Committee leadership and regional and state policy chairs are selected and voted upon and the Associations's advocacy goals and activities for the remainder of 2004 will be evaluated and decided upon. NEM's current leadership roster is hotlinked here for your review.

Nominations for Policy Chairs should be sent to headquarters ASAP. The issues that NEM members need to address as a group in executive session include the following: transitional retail market designs, a standardized retail contract, California resource adequacy requirements, outreach to Wall Street for assistance on the POLR structure, credit requirements and tradeable renewable credits.

NEM Member Opportunities

NEM has high visibility space in a number of industry publications. Members interested in submitting articles for inclusion in these publications should contact headquarters ASAP.

Also, NEM members have sought member business referrals and offered to give other NEM members preference in the award of business. Please contact headquarters if you would like to participate.

NEM Comments on NYISO Creditworthiness Standards

FERC required NYISO to report on the use of a stakeholder process to determine changes to its settlement and credit procedures. NEM submitted comments on the report noting that: 1) market participants were not adequately informed of stakeholder discussions; and 2) NYISO’s report lacks concrete, short-term solutions for reducing the burden of the NYISO’s current credit requirements on market participants, including the future use of a prompt use-payment cycle as previously suggested by NEM and urged by the Commission. The full text of NEM's Comments is available on the NEM Website.

Many thanks to Kyle Storie and Angela Carlson of Advantage Energy for their assistance with this proceeding.

Conference on Standards of Conduct

FERC will convene a conference on its Standards of Conduct for Transmission Providers on May 10, 2004, from 10AM to 3PM at the Doubletree Hotel-Allen Center in Houston, Texas. The morning session will include a discussion of Chief Compliance Officer duties and responsibilities, as well as training requirements and best practices. Topics for the afternoon session will be determined based on registrant feedback. The full text of the Conference Notice is available on the NEM Website.

NEM Comments on Wet Signature Requirements and Outbound Telemarketing

NEM submitted comments on Staff's proposed consumer protection regulations for customers of gas and electric suppliers. NEM recommended that wet signatures should not be required for telephonic enrollment. In order to satisfy the state's telephonic solicitation law on the matter, the Commission should publish on its website and in a bill insert the names, addresses and phone numbers of energy suppliers qualified to do business in the state. The Commission should also permit independent third party verification of the material terms of the contract, or in the alternative, competitive suppliers publication of their offerings including all restrictions in print or broadcast media that reach a reasonably-sized general circulation, in a mailing or on their website should be sufficient.

NEM also recommended that: 1) suppliers should be permitted to use third party verification or tape recording but not be required to tape the entire conversation; 2) suppliers should only be required to issue a single notice of cancellation period; and 3) the payment allocation order should be modified such that payments are applied first to the consumables portion of the bill, then to the non-consumables portion, and finally based on the age of the receivable. In the alternative, NEM urged the utilities purchase of supplier receivables and noted its general support for pro-ration of payments on consolidated bills. The full text of NEM's Comments is available on the NEM Website.

Commission Decides SOS Administrative Charges Are Not Subject to Tax Gross Up

The Commission examined whether the return component of the various Administrative Charges for Standard Offer Service (SOS) were subject to tax gross up. If so, it would have had the effect of increasing the size of the credits incorporated into the retail rates determined in the recent bids to supply power for SOS. The Commission decided that the Administrative Charge should not be grossed up for income taxes as it was not the original intent of the SOS agreement settling parties. The full text of the Commission's Decision is available on the NEM Website.

New Jersey
Board Adopts and Proposes Renewable Portfolio Standards Requirements

The Board adopted Renewable Portfolio Standard (RPS) rules that permit the option of an alternative compliance payment as a means of RPS compliance, in order to mitigate unreasonable Renewable Energy Certificate prices possibly caused by an unforeseen lack of supply or exertion of market power. The full text of the Adopted Rules are available on the NEM Website.

The Board also proposed changes to the RPS rules including: 1) providing a limited waiver for holders of 34-month supply obligations, committed to through the 2003 basic generation service (BGS) auction, and applying the RPS requirements in effect at the time of the 2003 auction to those supply obligations; 2) adjusting the RPS percentage requirements for the years following the expiration of the 34-month supply obligations, to compensate for the renewable energy that would have been supplied absent the limited waiver; 3) restricting the issuance of solar Renewable Energy Certificates to energy generated at a facility directly connected to a distribution system supplying New Jersey; and 4) authorizing the Board to adopt a different tracking system than the PJM Generation Attribute Tracking System (GATS) if necessary. Comments are due June 4, 2004. The full text of the Proposed Rules is available on the NEM Website.

Staff Submits Testimony on CG&E Rate Stabilization Plan

Staff has submitted testimony on CG&E's Rate Stabilization Plan. Staff contends that a Rate Stabilization Plan is desirable under current market conditions. However, echoing NEM's concerns, Staff finds fault with a number of CG&E's proposals. Staff argues that CG&E's proposed competitive bidding process is anti-competitive. With respect to CG&E's proposed Market Based Standard Service Offer (MBSSO), Staff maintains that CG&E inappropriately uses the MBSSO as a vehicle for offering competitive retail electric service. Staff argues that: 1) the market price adjustment tracker could result in CG&E pricing behavior that is anti-competitive; 2) the flex down adjustment option could create a ceiling and a floor price range that is lower than the standard "fully cost-loaded MBSSO product" and would be anti-competitive; 3) CG&E should be required to publicly post relevant retail price information that is needed by competitive suppliers, at no charge, to allow competitive suppliers to compete against the company's MBSSO; 4) the MBSSO contains too many differentiated services, making it difficult for competitors to offer value-added products. The full text of Staff's Testimony is available on the NEM Website.

Many thanks to NEM's Midwest Policy Team -Mark Radtke of WPS Energy Services, Phil O'Connor of Constellation NewEnergy, Dowell Hudson of Ontario Power Generation, Scott White of Interstate Gas Supply and Harry Kingerski of Shell Energy Services - for their assistance with this and other Ohio proceedings.

PECO Energy Storage Service RFP

PECO Energy Company issued an RFP to find an alternative to its Dominion GSS Storage Contract effective April 1, 2006. The RFP is to provide all or a part of storage service for a five year term and is open to Pennsylvania-licensed natural gas suppliers. Proposals are due May 7, 2004. The full text of the RFP is available on the NEM Website.

Staff Requests Comments on Facilitating Competition

Staff is requesting comments from stakeholders on facilitating competition in Virginia to be used in the Commission's annual report to the legislature and Governor on electric utility restructuring. Staff explained that, "because of recent legislation, pending dockets before the Commission, and the continued lack of competitive activity we are not asking any specific questions at this time. Rather, we invite and encourage anyone to take this opportunity to submit in writing any commentary regarding national, regional, or Virginia restructuring efforts, policies, activities, or events." Comments are due May 24, 2004, and reply comments are due June 4, 2004. The full text of Staff's Request for Comments is available on the NEM Website.

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