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April 6, 2004
Annual Meeting and Restructuring Conference Report

We have received a number of thank you letters and favorable comments on our Annual Meeting and Restructuring Conference. We would appreciate any thoughts you might have to make better or more valuable to you next year. Please submit your comments here. The event would not have been possible without the generous support of our sponsors. Please show your appreciation to
Centrica, Constellation NewEnergy, Itron, Unified Technologies Group, Southern Company Energy Solutions, Elster Electricity, Energy Services Group, Excelergy, HomePort, Interstate Gas Supply, Lodestar Corporation, and New Energy Associates for helping the industry to provide a forum such as this. NEM members wishing to participate in the numerous follow-up meetings with federal and state officials should contact headquarters ASAP.

NEM's Summer and Fall Executive Committee Meetings

NEM welcomes ideas for the location of its Summer Executive Committee Meeting as well as member sponsors. 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.

NEM is also exploring the possibility of hosting a Utility-Marketer Summit to discuss the most important transitional rate design issues and the utilities exit from the merchant function this fall. Nate Owen, President of ESG, has offered to host the fall meeting. Other member companies that wish to sponsor the fall meeting should contact headquarters.

"Into ComEd Conversion Convention" Available for NEM-EEI Master Contract

A new optional provision for the NEM-EEI Master Agreement, the "Into ComEd Conversion Convention," is now available. Parties to "Into ComEd Transactions" under the NEM-EEI Master Agreement can use this convention to implement their transactions after PJM begins operations in the control area currently operated by the Commonwealth Edison Company. Additional optional provisions to the Master Agreement will released later this spring and a training session on the Master Agreement and the optional provisions will be held in Houston on June 17, 2004. The Into ComEd Conversion Convention is hotlinked here for your convenience.

Final Blackout Report Released

The U.S.-Canada Power System Outage Task Force has released its "Final Report on the August 14, 2003, Blackout in the U.S. and Canada: Causes and Recommendations." The Report identifies four groups of causes of the Blackout as follows: 1) FirstEnergy (FE) and ECAR failed to assess and understand the inadequacies of FE's system, in particular, voltage instability and the vulnerability of the Cleveland-Akron area. FE also did not operate its system with appropriate voltage criteria; 2) there was inadequate situational awareness at FE; 3) FE failed to adequately manage tree growth in its transmission rights-of-way; and 4) the interconnected grid's reliability organizations failed to provide effective real-time diagnostic support.

The Report also issued forty-six recommendations grouped into four areas. Within the first area, institutional issues related to reliability, the Task Force recommends: 1) reliability standards should be mandatory and enforceable with penalties for noncompliance; 2) FERC should not approve RTO/ISO operations until they have met minimum functional requirements; and 3) an independent study should be conducted to examine the relationship among industry restructuring, competition and reliability. With respect to the second area, support and strengthening of NERC's actions of February 10, 2004, the Task Force recommends: 1) correcting the direct causes of the Blackout; and 2) strengthening the NERC Compliance Enforcement Program and Reliability Readiness Audit Program. In the third area, physical and cyber security of North American bulk power systems, the Task Force recommends: 1) establishing clear authority for physical and cyber security; and 2) assessing IT risk and vulnerability at scheduled intervals. The fourth recommendation area is the Canadian nuclear power sector.

The full text of the Report is available on the NEM Website.

Staff Files Proposed Residential Consumer Protection Regulations

Staff has filed proposed consumer protection regulations for residential choice customers. The proposal is based on prior Commission precedent with some significant modifications. Staff's proposal includes: 1) requiring partial payments to be shared between utilities and suppliers on a pro rata basis; 2) removing the requirement that an entire contract be available for viewing and printing on the Internet; 3) permitting telephone contracts to be sent by email and finalized with a wet signature; 4) expressly prohibiting slamming and cramming; and 5) permitting a single notice of a cancellation period for all contracts in excess of thirty days, with notice provided forty five days prior to cancellation. Comments on Staff's Proposal are due April 23, 2004. The full texts of Staff's Report and Proposed Regulations are available on the NEM Website.

New Jersey
Staff to Conduct Monthly EDI Issues Calls

NJBPU Staff will begin hosting monthly EDI calls, and the calls are meant to include gas and electric EDI issues. The calls will be conducted the first Thursday of each month from 3PM-4PM, beginning May 6, 2004. Parties should forward up to three items for inclusion in the initial meeting agenda to the electric list server at Staff will then assemble a list of items and circulate an agenda prior to the call. The call-in number is 877-287-0283, and the participant code is 404552.

New York
Staff Meeting on HEFPA Implementation, Related UBP Revisions and Pro-Ration of Payments

A meeting of interested parties will be held on April 15, 2004, from 10AM-1PM regarding the amendments to HEFPA and subsequent Commission orders implementing those amendments as well as the resulting impact on the Uniform Business Practices (UBP). Staff is looking for straw proposals regarding modifications to existing UBP provisions, and recommendations for a new UBP section concerning ESCO-initiated suspensions.

The meeting will reconvene at 2PM on April 15, 2004, to discuss issues and concerns related to pro-ration of partial customer payments on consolidated bills, which began on February 3, 2004.

Straw proposals concerning the UBP, questions and concerns should be circulated by April 9, 2004. Those planning to attend should contact Shirley Rabideau at 518-486-2940 or at Teleconferencing is also available. The call in number is 866-266-3697, and the participant code is 7562440#.

Dominion Virginia Power Files Proposed Modifications to Retail Access Pilot Programs and Transmission Backup Supply Service Proposal

Dominion Virginia Power (DVP) has made filings with SCC and FERC intended to aid competitive suppliers in their ability to participate in its proposed retail access pilot programs. DVP's proposed modifications to its pilot programs filed with SCC include: 1) a 100% reduction of the 2004 wires charge; 2) permitting one competitive provider to serve three geographic blocks if the selection of two or more competitive providers would otherwise result in the $ per MWh offer price from the next lowest bidder's Bid Summary Sheet in any rate class to be more than 1.5% higher than the offer in the same rate class of the lowest bid; 3) reissuing the Request for Qualifications; 4) for any block not awarded in the bidding process, DVP will accept new bids to supply the unawarded blocks and such bids would be due the tenth business day of the following month; 5) bids would cover supply through the January 2006 meter read date; 6) reducing the bid review period to two days with eight days for Staff to perform its due diligence review; 7) applying minimum stay provisions to customers returning to utility service at capped rates.

DVP's filing at FERC is meant to address competitive suppliers concerns with respect to the availability of transmission capacity into Virginia. DVP proposes to offer backup supply service to competitive providers to permit them to continue serving customers in the DVP service area during supply interruptions.

Please note, NEM has received an offer to provide a flat group rate (if there is sufficient interest) to NEM members that want to obtain a competitive service provider license from the SCC to participate in the pilots. Interested members should contact headquarters ASAP.

The full texts of DVP's Pilot Program Proposals and Backup Supply Service Proposal are available on the NEM Website.

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