August 4, 2000


 Texas PUC Chairman Pat Woods has been confirmed as the keynote speaker for the NEM Industry Roundtable and Golf Tournament on October 31, 2000, in The Woodlands, Texas. NEM will hold its Executive and Policy Development Meeting on October 30, 2000, starting at 10AM. A hot link to the full agenda for both days is provided. Please contact NEM headquarters for additional information or to register.

 There will be a conference call Tuesday, August 8 at 11AM for the NEM Policy Leadership Team. The Energy Information Administration will participate at the beginning of the call to solicit comments on a new reporting requirement to be imposed on marketers and billers (discussed below).

 Minutes of the Internet/Technology Policy Development Meeting are available on the NEM Website. All members are encouraged to sign up for one of the four Internet/Technology Committees. You may do this by touching this hotlink.

 NEM Discusses Tax Issues at MultiState Tax Commission Meeting. NEM President, Craig Goodman, discussed issues that affect taxation of the restructrured energy industry at the Multistate Tax Commission's annual meeting. The tax question outline that was circulated at the meeting is available on the NEM Website. Several states have requested NEM assistance in developing new taxing schemes (risky and non-risky) to deal with restructuring. Industry volunteers are solicited. If you wish to volunteer, please touch this hotlink.


 EIA Proposes to Mandate New Gas Biller Form--EIA is proposing this new survey so they may continue to provide adequate natural gas price and volume information by end-use sector at the state level in light of customer choice programs. The full text of the Notice Requesting Comments and a copy of the Proposed Monthly Natural Gas Biller Survey are available on the NEM Website. Please contact NEM headquarters with your comments and questions.

 Oregon Requests NEM Assistance--The State of Oregon will begin deregulation in 2001. If you plan to do business in Oregon, please contact headquarters ASAP.

 The California PUC Issues Important Orders and The California ISO Board Lowers Price Cap to $250--The CAISO Board voted to lower the price cap for the wholesale electric market to $250/MWH effective August 7, 2000, through October 15, 2000. An Alert briefing all the California Orders will be sent to members in a separate email and is hotlinked here.


Federal Issues

 Federal Trade Commission (FTC) and Online Advertisers Reach Privacy Agreement

The Network Advertising Initiative (NAI) was approved by the FTC in a 4-1 vote this past week. The initiative, which includes the largest online advertising companies, is a self-regulatory proposal to address consumer privacy concerns. Online advertisers currently profile web users to more efficiently target banner ads. The NAI creates guidelines for companies to follow in profiling to protect consumers' personal information. The NAI sets forth the following four principles:

  • Notice: Consumers will receive "robust" notice of advertisers' profiling activities on host Web sites.
  • Choice: Consumers must be able to opt out of participating in profiling data collection.
  • Access: Consumers can gain "reasonable" access to their personalized information.
  • Security: Network advertisers must make "reasonable" efforts to protect the data they collect.

The Commission's report on approving NAI, which has been sent to Congress, also called on Congress to enact legislation to make these principles binding on all Internet marketing companies. Such legislation could begin to define who owns data about consumers' activities and usage of the Internet, building a precedent for other types of online data collection. The FTC's public statement is available on the FTC's Website and the full text of the report and its appendix detailing NAI is available on the NEM Website.

 Bills Introduced on Tax Treatment of Utility Bonds

Identical Bills introduced in the House and Senate would amend the federal tax code on treatment of municipal utilities' bonds. The Bills grandfather existing municipal utility bonds and allow for the issuance of future tax-exempt bonds for distribution and transmission facilities, but not generation facilities. However, transmission facilities financed with tax-exempt debt are limited to serving the municipalities' local customers. The full text of H.R.4971 Sections 1, 2, 14A and H.R.4971 Sections 3, 4, 5 are available on the NEM Website. The text of the Agreement between APPA, the Edison Electric Institute and Large Public Power Council as well as a Summary of the Agreement are available on the NEM Website.

 Rep. Wynn Introduces Reliability Bill

Representative Wynn's new reliability bill, H.R. 4941, sets forth the structure and governance of an Electric Reliability Organization. The full text of bill is available on the NEM Website.

 FTC Report on Competition in Electric Power Regulatory Reform

The FTC maintains that current antitrust laws are not designed to address market power properly. The FTC has set forth four principles for restructuring as follows:

  • Unburden markets from substantial and durable horizontal market power;
  • Remove incentives for vertically integrated firms to engage in undue discrimination and cross-subsidization;
  • Foster accurate, non-deceptive information disclosure to customers about price and service offerings; and
  • Promote uniform disclosure of prices and other relevant attributes of offers to customers.

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


 Temporary $1,000 Bid Cap in the NYISO Energy Markets

The Commission imposed a temporary bid cap of $1,000 per MWh through the summer capability period that is effective from July 26, 2000, through October 28, 2000. The Commission declined to apply the bid cap to Sink Price Cap Bids and the ancillary service markets. The full text of the Order is available on the NEM Website.

 Temporary $1,000 Bid Cap in New England Energy and Automatic Generation Control (AGC) Market

The Commission imposed a temporary bid cap of $1,000/MWh in the New England energy and AGC market. The bid cap is effective from July 26, 2000, through October 30, 2000, and is only to be imposed during OP 4 conditions. In its Order the Commission accepted the ISO-NE proposal to reduce reliance on its own emergency imports by increasing participant-arranged imports of energy, and the ISO-NE request for an extension until December 31, 2000, of its authority to limit operating reserve prices to the energy clearing price. The Commission also required ISO-NE to disclose individual bid data with a six-month lag and to revise its market monitoring and market power mitigation plan consistent with the NYISO's. The full text of the Order is available on the NEM Website.

 FERC Orders Probe of Electric Bulk Power Markets

Staff will undertake a fact-finding investigation of conditions in electric bulk power markets, including volatile price fluctuations, in various regions of the country. Staff is to report its findings to the Commission by November 1, 2000. FERC will then determine what steps to take within its jurisdiction to remedy any market behavior, operation, design or structural problems. The full text of the Order requiring an investigation of the electric bulk power market will be on the NEM Website when made available electronically.

 Order 2000 Filing Procedures

The Commission has issued a Notice providing guidelines for filings related to the formation of Regional Transmission Organizations (RTOs). The Notice clarifies procedures for the format of the compliance filings, the comment period, appropriateness of joint filings, and acceptability of abbreviated filings by small entities. The full text of the Notice for Guidance for Processing Order 2000 Filings is available from NEM headquarters.

 Commission Issues Order in NYISO Software Proceeding

The Commission denied Niagara Mohawk's request for lost opportunity cost payments for rejected bids for exports of power and its request for a manual fix of the NYISO's software. The Commission did require the NYISO to file a report detailing changes to its software to address the flaws identified by Niagara Mohawk. The full text of the Commission's Order is available on the NEM Website.


State Issues

New York

 NYSEG Back-Out Rate Proceeding Clarifying Order

The PSC issued an Order clarifying the scope of the NYSEG back-out rate proceedings to include: 1) development of a reasonable mechanism for evaluating if market prices exceed the level of the backout credit, and 2) examination of whether the existing annual backout credit, whether or not reshaped or restructured, should be increased or replaced with a market-based credit. Any other issues, including cost of service, which become relevant to the resolution of these two issues are also within the scope of the proceeding. The full text of the Order Continuing Proceedings and Providing Clarification is available on the NEM Website.


 NEM Files Comments in NYSEG Back-Out Rate Proceeding

NEM has filed comments on the proposed schedule in the NYSEG back-out rate proceeding. In view of the recent Order expanding the scope of the proceeding, NEM requested NYSEG provide, in cents/kWh, energy supply costs and commercial costs associated with serving retail customers. The full text of NEM's Comments is available on the NEM Website. LepCorp circulated a market-based back-out credit proposal that is comprised of three components. The full text of LepCorp's proposal including its Hedging Example is available on the NEM Website.

 Installed Capacity (ICAP) Recall Plan Draft

The ICAP group draft document describes the function and operation of the recall of export transactions within the NYISO. The full text of the Recall Plan Draft is available on the NEM Website.

 Standby Rate Working Group Issues List

The Issues List for the Standby Rate Working Group activities has been prepared and draft comments are due from participants by August 21, 2000. The full text of the Issues List is available on the NEM Website.


New Jersey

 Customer Account Services Proceeding Settlement

A proposed Settlement has been filed with the Commission in the Customer Account Services proceeding. NEM will file in support of the Settlement. The full text of the proposed Settlement, and PSE&G's Attachment B, Attachment C, Attachment D, Attachment E, and Attachment F are available on the NEM Website.

 BPU Approves Internet Enrollment Pilot Program

The Pilot Program will allow customers to enter into contracts via Internet and is initially limited to 10% of the market before Board reevaluation in six months. The conditions of the program require the supplier's Internet site and information on the site to be subject to the Board's marketing standards, the customer enrollment authorization form must contain terms and conditions consistent with the Board's current contract standards, the customer must respond to a separate screen explicitly stating the customer is authorizing a switch of suppliers, the customer must receive a separate electronic message verifying receipt of enrollment, and the customer must have the option to receive the contract in hardcopy by mail.



 NEM Files Comments in Provider of Last Resort (POLR) Proceeding

NEM filed comments in the POLR proceeding arguing that the service should be structured to encourage minimum stays and should not mandate minimum terms. NEM asserted that it is vital to ensure that the price for POLR services adequately reflects retail prices, and does not produce artificial or cross-subsidized price signals. NEM further argued that POLR prices should include all of the energy supply costs plus the commercial costs associated with serving retail customers. The full text of NEM's Comments on POLR Service as well as the NOPR on POLR Service is available on the NEM Website.

 NOPR on Standards for Open Access to Electricity

The PUC has issued a NOPR to ensure that Retail Electric Providers (REPs) have open access to electric transmission and distribution services when retail electric competition begins in Texas. The terms and conditions of wires service will be standardized for all investor-owned utilities (IOUs) in Texas. The standard terms include: terms and process for service connection and disconnection, line extension, outage reporting, metering and data exchange, security deposits, billing and payment terms, default remedies, and dispute resolution process. An electric utility must apply the same terms and conditions to its affiliates and the affiliates' customers as well as to other retail electric providers selling electricity in its service area and their customers. Initial comments are due by September 1, 2000, and reply comments are due by September 15, 2000. A public hearing is scheduled for September 29, 2000. The full text of the NOPR on Terms and Conditions of Transmission and Distribution Utilities' Retail Distribution Service and the Proposed Pro Forma Tariff are available on the NEM Website.

 Retail Electric Provider (REP) Rules Available

The final Rules adopted by the Commission for Certification of Retail Electric Providers (REPs) and Financial Standards for Retail Electric Providers Regarding the Billing and Collection of Transition Charges are available on the NEM Website.



 National Fuel Gas (NFG) Restructuring Filing

NFG has filed a Supplement to its gas tariff which provides for mandatory release of capacity on Tennessee Gas Pipeline to Small Aggregation Transportation Supplier Service Suppliers. The effective date of the Supplement is July 1, 2000. The full text of the Supplement is available on the NEM Website.

 Equitable Gas Revised Supplier Tariff

Equitable Gas has filed a revised Supplier Tariff with the Commission. The full text of Equitable's Revised Supplier Tariff is available on the NEM Website.

 PFG Gas and North Penn Submit Draft Forms of Supplier Tariff and Retail Tariff

PFG Gas and North Penn have filed a draft Supplier Tariff and Retail Tariff with the Commission. The full text of the draft Supplier Tariff and the Retail Tariff are available on the NEM Website.

 State Representative Raises Concern About PUC Audit

Representative George has written to Chairman Quain requesting an investigation of the PUC's audit of Penelec's Stranded Cost NUG alleging that Penelec has not complied with PUC rules and the PUC has not enforced its own rules.



 PUC Approves FirstEnergy Settlement

The PUC has approved FirstEnergy's Settlement which provides that:

  • FirstEnergy will make available 1,120 megawatts of generating capacity to nonaffiliated marketers and aggregators;
  • Shopping credits plus incentives effective January 1, 2001, will be equal to 45% for residential customers, 25% for commercial customers, and 10% for industrial customers with C&I rates escalating 5% annually until 20% of the customers are shopping;
  • Suppliers will be reimbursed for transmission charges imposed by PJM and/or by the MISO, if the MISO is fully operating on a single tariff on generation originating in the MISO or PJM.
  • Base distribution rates will be frozen until December 31, 2007;
  • Residential customer charges will be reduced by five percent of transition costs during the market development period; and
  • FirstEnergy is at risk for non-recovery of up to $500 million of transition costs if the twenty percent switching goal is not achieved.

The full text of the Summary of the Commission's Opinion and Order, the Table of Contents, and the Opinion and Order are available on the NEM Website.

 FirstEnergy Submits Proposed Compliance Tariffs and Supporting Documents

FirstEnergy has submitted proposed compliance tariffs for its three affiliates, Cleveland Electric Illuminating (CEI), OhioEdison (OE), and ToledoEdison (TE), implementing the Settlement approved by the Commission as set forth below (Caution: These are large files. The file sizes are set forth in parentheses after each hotlink):

Cleveland Electric Illuminating (CEI)

OhioEdison (OE)

ToledoEdison (TE)

The full text of FirstEnergy's Tax Computations for the Proposed Compliance Tariffs and Supporting Documents are hotlinked here (185 K) and are available on the NEM Website.

 PUC Issues Order on Consumer Education Plans

The PUC approved the education plans of CG&E, AEP, DP&L and First Energy and ordered the electric utilities to include an unaffiliated energy marketer on their advisory boards. The PUC further ordered that utilities continue to work with Staff and the advisory groups to develop more detailed consumer education plans. The full text of the Order is available on the NEM Website.

 Allegheny Power Files Transition Plan Brief

Allegheny Power has submitted a Brief in support of approval of its Settlement. The full text of Allegheny Power's Brief is available on the NEM Website.

 Columbus Southern and Ohio Power File Brief on Settlement Plan

Columbus Southern Power (CSP) and Ohio Power Company (OPCO) have submitted a Brief in support of their Settlement. The full text of CSP and OPCO's Brief is available on the NEM Website.


 PEPCO Submits Revised Supplier Coordination Tariff Pages

The proposed revised pages to Pepco's Supplier Coordination Tariff pertain to updates in system loss factors and workpapers on those loss factors, as well as charges for electricity supplier services. The charges set forth include:

  • Supplier registration fee of $350;
  • Account Management and Energy Coordination fee of $.11 per MWH, per month;
  • Historical Consumption Request (Non Interval Data) fee of $110 per request;
  • Historical Consumption Request via EDI (Non Interval Data) fee of $.54 per each account; and
  • Historical Consumption Request (Interval Data) fee of $8.00 per each month of data.

The full text of Pepco's Revised Supplier Coordination Tariff Pages are available from NEM headquarters.

 Pepco Submits Status Report on EDI

Pepco has submitted its Twelfth Status Report on its EDI Testing Plan and Enrollment Transaction Processes to the PSC. Batch Three billing testing with BGE and FirstEnergy is completed. Pepco will not certify Washington Gas because of data errors. Testing with Batch Four suppliers is to begin August 21, 2000. Post-implementation testing of enrollment transaction processes is continuing. The full text of the Status Report is available from NEM headquarters.

 Washington Gas Requests Stay of Order on Use of Logo

Washington Gas has requested a stay of the Commission Order imposing a royalty on the shared use of a company name and logo, applying new core standards of conduct for non-core affiliates, and requiring that a utility's core affiliate utilize a disclaimer that its prices are not set by the PSC. The full text of Washington Gas's Request for Stay is available from NEM headquarters.



 Columbia Gas Applies for Extension of Customer Choice Program

Columbia Gas filed to extend the Customer Choice Program. The SCC requested comments by August 14, 2000. The full text of the Order is available on the NEM Website.

 Staff Requests Meetings with Virginia Power

Staff has requested that Virginia Power personnel meet with Staff and provide information about Virginia Power's role as a common carrier in the provision of transmission services to affiliated and non-affiliated participants in competitive electric power markets.



 PUC Restructuring Orders of August 3, 2000 Meeting

The PUC has issued Orders in the following proceedings:

  • Addressing UCAN's Emergency Petition to implement several measures, including a rate freeze, designed to mitigate the summer rate spikes experienced by SDG&E customers.
  • Instituting an investigation into the functioning of the wholesale electric market and associated impact on retail rates, including exploration of issues and options to address summer price spikes in San Diego.
  • Addressing Southern California Edison's Emergency Motion for pre-approval of a voluntary Qualifying Facilities contract amendment designed to increase energy production during periods of high demand.
  • Addressing Emergency Motions of Southern California Edison and Pacific Gas and Electric Company for authority to enter into bilateral power contract transactions.
  • Addressing SDG&E's request to modify, on an interim basis, the method used to calculate California Alternate Rates for Energy (CARE) discounts and CARE program rates.

The full text of the Orders is on the NEM Website.

 NEM Files Comments in SDG&E Proceeding

NEM submitted comments on the Draft Opinion in response to a motion filed by a consumer group requesting an emergency rate freeze and investigation of the California markets. NEM supported the proposal that SDG&E be allowed to exit the default service provider role, that SDG&E be allowed to facilitate customer aggregation, and the enrollment of SDG&E customers in a level-pay program as an option and not a default provision. The full text of NEM's Comments in the SDG&E proceeding are available on the NEM Website.

 Report to Governor Davis from California PUC President and Chairman of Electricity Oversight Board

President Lynch and Chairman Kahn have issued a report to Governor Davis on California's wholesale electricity market. The problems identified in the report include: control of California's electric system by the ISO and the PX, organizations that have no statutory duty to serve California's consumers or economy and many of whom have an interest in keeping wholesale electric prices high, power supply shortages, increased demand and a dysfunctional market. The solutions offered include: state oversight of planning for new generation, reliable operations, plant maintenance, and pricing, concerted efforts to reduce demand, and improving electricity supplies. The full text of the Cover Letter, Executive Summary, and Report to Governor Davis from President Lynch and Chairman Kahn are available on the NEM Website.

 PG&E Gas OII Settlement

PG&E filed with the Commission two advice letters and attached tariffs to implement the Comprehensive PG&E Gas OII Settlement Agreement which are available on the NEM Website as follows:



 NEM Files Comments in Metering, Billing, and Information Services (MBIS) Proceeding

NEM filed comments in support of the position filed by Competitive Retail Providers in the MBIS proceeding. Competitive Retail Providers recommend use of a consolidated supplier bill, competitive provision of metering services, introduction of an improved payment process between LDCs and suppliers, bill ready information requirements, accurate customer credits for services no longer provided by LDCs, and standard practices across utility jurisdictions. The full text of NEM's comments and the full text of Competitive Retail Providers comments are available on the NEM Website.

 Default Service RFP

Massachusetts Electric Company (NGrid) has petitioned the DTE to proceed with its bid for market-based default service per the outcome of the DTE Docket 99-60 which authorized the Distribution Companies to offer market-based default service options to customers starting on January 1, 2001. Parties interested in getting the RFP should contact MECO. If the DTE approves the petition, the RFP will be issued on August 1, 2000.

Many thanks to Scott Brown of Exelon Energy for this summary.



 PUC Approval of Settlements Seen as Reopening Electric Market

The PUC voted to approve a $48 million electricity rate increase for Nevada Power to cover past fuel costs. Nevada Power agreed to drop the federal deregulation lawsuit it filed in March challenging the constitutionality of competition. Large industrial customers such as casinos will get to choose their electricity service provider by November 1, 2000, and residential consumers will be phased in by September 2001. The rate hike will become effective August 1, 2000, which will result in a 4.7% increase in residential utility bills and 6% for large industrial customers. The Settlement still needs to be approved by a state district court judge. Despite the Settlement, State Senator Neal has vowed to block plans for a competitive power market and submitted a draft to the state Legislature calling for re-regulation.


Other Issues

 Uniform Business Practices (UBP) Report Issued

A UBP Report was issued August 1st that included the following final chapters: Preface, Customer Information, Customer Enrollment and Switching, Billing and Payment, Processing Load Profiling, and Appendix A - Glossary. The Report also included the following chapters that are open for comment through September 11, 2000: Exhibit to Billing and Payment entitled Billing Services Agreement, Supplier Licensing, Creditworthiness, Market Participant Interaction (MPI): Governing Documents and Performances Standards, Exhibit to MPI entitled Outline for a Master Service Agreement Between a Utility and Supplier, Disputes Between the Utility and the Supplier, Customer Inquiries, Exhibit to Customer Inquiries entitled Customer Account Maintenance, Appendix B - Single Retailer Model, and Unbundled Metering. The full text of the UBP Report is available on the NEM Website.