December 22, 2000


 Southern Energy Nominated to NEM Executive Committee

NEM is pleased to announce that Southern Energy has been nominated to its Executive Committee. Southern Energy is one of the world's largest competitive providers of electricity and energy-related products and services with businesses located in the Americas, Europe, and the Asia-Pacific region. Additional information on this nomination will be sent under separate cover.

 Executive Committee Meeting Final Agenda and Accommodation Information

The January 22-23, 2001, Executive Committee Meeting will be held at the Paradise Point Resort. Please contact Toni Pearce of Sempra as soon as possible at (619) 696-4286 to reserve a room. The Final Agenda for the Executive Committee meeting is available on the NEM Website, and a hotlink to register for the meeting is provided here and on the NEM Website for your convenience. In addition to the agenda items, NEM members have been requested to address utility bankruptcy, California supply and national energy price issues with recommendations for both supply and demand responses for a National Energy Strategy for the incoming Bush Administration.

Federal Issues

 Energy Secretary Richardson Issues Emergency Order

Energy Secretary Richardson issued an Emergency Order to address the shortage of electricity in California. The Order requires that if the California ISO certifies that there is an inadequate supply of electricity, suppliers that have provided power to the California PX and the California ISO between November 14, 2000, and December 14, 2000, are required to make power available to the California ISO if they have power available in excess of the amount needed to provide service to their firm customers. The Order's termination date has been extended to December 27, 2000. The full text of the Secretary's Emergency Order is available on the NEM Website.

 NEM Files Comments on EIA Gas Marketer Survey

NEM has filed comments on EIA's Proposed Gas Marketer Survey arguing that the mandatory imposition of the Proposed Survey is a rulemaking, in excess of EIA's statutory authority, that was not promulgated in conformance with administrative law. NEM urges that if the Proposed Survey is adopted, it should only be imposed on natural gas marketers on a voluntary basis, in jurisdictions where 25% customer migration has been achieved and then only in a manner similar to the home heating oil industry. The full text of NEM's Comments is available on the NEM Website.


 Commission Issues Order on California Wholesale Electric Markets

The Commission has issued an Order directing remedies for the California wholesale electric markets including: eliminating the requirement that all investor-owned utilities in California must buy and sell all generation from the California Power Exchange; requiring all market participants to schedule 95% of their loads prior to real time subject to a penalty for deviations in scheduling in excess of 5% of hourly load requirements; establishing a $150 per MW "break point" for an interim period; requiring the current ISO stakeholder governing board to be replaced with a non-stakeholder board; and requiring the ISO to file generation interconnection procedures and a congestion management redesign plan. The full text of the Commission's Order is available on the NEM Website.

 NYC Public Utility Service (NYCPUS) Opposes Change to ConEd Transmission Agreement

NYCPUS has filed a Brief arguing that ConEd's proposed amendment to the transmission agreement with NYCPUS should be rejected. NYCPUS argues that the amendment should first have been filed with the NYPSC, the amendment results in duplication of ancillary services charges, and that ConEd improperly assigned ancillary and LSE services under the agreement to the New York Power Authority. The full text of the NYCPUS Brief is available from NEM headquarters.

 NY Member Systems Submit Additions to Revised Transmission Service Agreement

The NY Member Systems have filed additions to a revised transmission service agreement. These additions include appendices to the Niagara Mohawk-Selkirk March 2000 settlement and Transmission Services Agreements of April 1997 and July 1997 between Niagara Mohawk and Selkirk. The full text of the NY Member Systems Filing is available from NEM headquarters.

State Issues

New York

 NEM Files Reply Brief in NYSEG Back-out Rate Proceeding

NEM has filed a Reply Brief in the NYSEG back-out rate proceeding opposing NYSEG's argument against the adoption of an adder. NEM urges that NYSEG should be incented through the structure of the back-out rate to shed certain costs. NEM further argues that Staff's proposal to institute a market-based back-out credit with a floor is insufficient to support development of the market without also including an adder. The full text of NEM's Reply Brief is available on the NEM Website.

 NEM, CPB and ConEd Comments in Billing Proceeding

NEM has filed comments in the billing proceeding supporting implementation of the ESCO single bill option. NEM opposed the utilities' refusal to split combined electric and gas accounts for purposes of the ESCO single bill, the proposed restrictions on customers eligible to receive the ESCO single bill, and the proposed 97% bill accuracy standard. NEM also argued that ConEd's proposed billing back-out credit is inadequate and the credits established in the ConEd Phase 4 proceeding and the billing proceeding must be coordinated to encompass all of ConEd's long run avoided costs. The full text of NEM's Comments is available on the NEM Website.

The Consumer Protection Board filed comments supporting the option to split accounts for the ESCO single bill, opposing the utilities' proposed tariff provisions on ESCO creditworthiness, arguing that many of the proposed utility charges for billing for other entities reflect double recovery of costs related to providing a utility consolidated bill, and opposing the utilities' proposals on the format and content of the ESCO portion of the ESCO consolidated bill. The full text of the Consumer Protection Board's Comments is available on the NEM Website.

Additionally, ConEd and O&R have requested that the Commission delay implementation of the single bill model to allow for the development and testing of EDI transaction sets related to billing.

New Jersey

 Rockland Electric (RECO) Settlement in Customer Account Services Proceeding

A proposed settlement has been signed in the customer account services proceeding with respect to RECO. The signatories adopted a generic settlement previously adopted in the proceeding subject to RECO-specific provisions for billing services, bill insert production and delivery guidelines, a bill credit of $1.00 per bill per month for Third Party Supplier (TPS) consolidated billing, receivables, cost recovery, and a one-time bill insert to obtain customer data for TPSs. The full text of the RECO Settlement including Attachment A, Attachment B, Attachment C, Attachment D, Attachment E, and Attachment F is available on the NEM Website.

 PSE&G and NJBPU Submit Briefs in PSE&G Appeal

The NJBPU submitted a Brief arguing that modification of its prior findings on PSE&G's initial 5% rate reduction, amortization of excess depreciation fund, and valuation of transferred generating assets would result in continuing uncertainty about electric deregulation in the state and impede the development of a competitive energy market. The NJBPU also argued that a modification would delay the benefits of cost savings from securitization that could be passed through to ratepayers. The full text of the NJPBU's Brief is available from NEM headquarters.

PSE&G submitted a Brief arguing that implementation of a retroactive rate reduction would deprive it of the opportunity to recover unsecuritized stranded costs, contrary to state law pertaining to unreasonable rates as confiscation of utility property. PSE&G also argued that a rate reduction would require a corresponding reduction in shopping credits and would interfere with the Board's prior approval of DSM cost recovery. The full text of PSE&G's Brief is available on the NEM Website.


 MetEd and Penelec Request Deferral Mechanism for POLR Service

MetEd and Penelec (GPU Energy) have filed a request to implement an interim deferral tracking mechanism for POLR service. The companies want to defer, for accounting and regulatory purposes, the actual costs they incur above present capped rate levels to provide POLR service to customers on and after January 1, 2001, and request recovery as an increase or decrease in stranded costs.

The Consumer Advocate argues that GPU Energy's request should be rejected because it is contrary to state restructuring law and the companies' settlement. The Consumer Advocate also argues that the issue should be resolved as part of the FirstEnergy-GPU merger proceeding. The full text of the GPU Energy Request and the Consumer Advocate's Answer is available on the NEM Website.


 FirstEnergy Special Contract Customer List

FirstEnergy has released a special contract customer list. These customers receive discounts off of tariff rates and lose those discounts if they shop with another supplier. The full text of the Special Contract Customer List is available on the NEM Website.

 Marketers Object to CG&E and FirstEnergy Tariffs

Marketers have filed objections to the CG&E and FirstEnergy tariffs approved by the Commission. With respect to the CG&E tariff, the Marketers argue that: a customer should not be responsible for the cost of a meter test if the meter is defective; the required amount of supplier collateral should reflect 45 days of estimated customer usage; the section providing an exclusive right to CG&E to invoice an estimated imbalance charge, prior to actual meter reading, is unreasonable; the tariff should clarify that the $155 per submission fee for Submitting Required Market Monitoring Reports for Certified Suppliers and $0.22 per bill fee for providing Commission Mandated Abandonment Notices as Bill Messages should only be applied if the supplier requests such a service; and the ongoing charge to suppliers for customer meter data is unreasonable. The Marketers also argue that the FirstEnergy tariff provision imposing an ongoing charge to suppliers for customer meter data is unreasonable. The full text of the Marketers Filing on CG&E and the Marketers Filing on FirstEnergy are available on the NEM Website.


 Pepco and Washington Gas File Issues in Royalty Proceeding

Pepco and Washington Gas filed issues lists in the royalty proceeding framing the issues of whether a royalty payment for use of the utility name is appropriate and how it should be calculated. Pepco also raised the issues of whether the assessment of a royalty should be limited to the use of the utility name in Maryland, whether the Commission has statutory authority to require a royalty payment for use of the utility name, and whether the imposition of a royalty payment is an impermissible restraint on commercial speech under the First Amendment, is an unconstitutional taking, or is a violation of the Commerce Clause. Washington Gas raised the issues of whether the value of the royalty should be reflected in the utility's rates, and if so, for how long. The full text of the Issues Lists filed by Pepco and Washington Gas are available on the NEM Website.


 Virginia Power Requests Adjustment to Wires Charges

Virginia Power has requested that the Commission approve adjustments to wires charges that apply to its retail access pilot program. Virginia Power argues that the wires charges should be increased to reflect the company's requested increase in its fuel factor, to be effective January 1, 2001. The full text of Virginia Power's Filing is available on the NEM Website.


 Consumers Energy and Michigan Electric and Gas Association (MEGA) Comments on Cramming and Slamming Procedures

Consumers Energy and MEGA have filed comments opposing NEM's proposal that marketer compliance with the UBP section on customer enrollment and switching should be used to ensure consumer protection against cramming and slamming. The full text of the comments of Consumers Energy and MEGA are available on the NEM Website.


 United Cities Gas Comments in Small Volume Gas Transportation Proceeding

United Cities Gas has filed comments in the small volume gas transportation proceeding arguing that adoption of a uniform electronic data transfer system for communication between the utilities and certified natural gas providers may be prohibitively expensive for smaller utilities serving a limited number of customers. The full text of United Cities Gas' Comments is available on the NEM Website.


 SoCalGas and SDG&E Comments on Settlement Agreement

SoCalGas and SDG&E have filed comments on Commissioner Bilas' Proposed Decision that the Comprehensive Settlement Agreement (CSA) not be adopted. SoCalGas and SDG&E argue that the CSA will benefit SoCalGas core customers by shifting a significant percentage of stranded costs to noncore customers, will generate more than enough benefits to noncore customers to justify the implementation costs of the CSA's capacity-related provisions, and the structure of firm, tradable intrastate transmission rights will not harm southern California gas consumers. The full text of the SoCalGas and SDG&E Comments are available from NEM headquarters.

Other Issues

 NASUCA Resolution on UBP

NASUCA has adopted a Resolution on the UBP encouraging state regulators to consider the UBP as a guide for the development of procedures to unbundle retail electric and gas markets. The Resolution also encourages adoption of greater consumer protection measures than those in the UBP and opposes the provisions on cost recovery and risks associated with default service. The full text of the NASUCA Resolution is available on the NEM Website.

 Pennsylvania PUC Supports GISB Strawman

The Pennsylvania PUC has issued comments supporting the GISB strawman for an Energy Industry Standards Board. The Pennsylvania PUC did express concern with the organization structure and suggested that the "Services" industry segment may be too broadly defined. The Pennsylvania PUC suggests that a distinction should be made between those engaged in the marketing of energy services from those engaged in the marketing of information services and between mass marketers and small marketers. The full text of the Pennsylvania PUC's Comments is available on the NEM Website.