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February 20, 2004
NEM's Annual Membership Meeting and National Restructuring Conference

Please register early for NEM's Annual Membership Meeting and National Restructuring Conference. It will be held on March 31 and April 1, 2004, at the Capitol Hill Hyatt in Washington, DC. The Senate VIP reception will be held on March 31 at 6PM in the Senate Russell Caucus Room 325. If you would like to invite a spouse or a VIP please contact NEM Headquarters for a special invitation.

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 public policy 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.

NEM's Summer Executive Committee Meeting

NEM's Summer Executive Committee Meeting will be held in Colorado. The dates for the meeting are the last week in June. Please mark your calendars.

NEM Held Its Winter Executive Committee Policy and Planning Meeting

The Winter Executive Committee Policy and Planning Meeting was held 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. Comments, thoughts and suggestions, would be appreciated.

Senate To Consider Energy Bill with Provisions For Market Transparency and Price Reporting

Senator Pete Domenici, chairman of the Senate Energy and Natural Resources Committee, introduced a new, stream-lined Energy Bill. The bill includes Chairman Barton's language on market reform and transparency. The Bill states that FERC shall issue rules establishing an electronic information system to facilitate price transparency. According to the bill, the electronic systems shall provide information about the availability and market price of wholesale electric energy and transmission services to FERC, State commissions, buyers and sellers of wholesale electric energy, users of transmission services, and the public on a timely basis.

The Energy Policy Act of 2003 (S2095) will be immediately placed on the Senate calendar where it can be brought to the Senate floor for consideration at any time without going through the committee process. This is likely to occur when the Senate returns from the Presidentís Day recess on February 23, 2004.

The full text of the Bill (S2905) and an Overview of the Bill are available on the NEM Website.

Tenth Circuit Court of Appeals Upholds Constitutionality of Do-Not- Call Registry

The Tenth Circuit Court of Appeals upheld the national do-not-call registry finding that the government asserted substantial interests to be served by the do-not-call registry (privacy and consumer protection), that the do-not-call registry will directly advance those interests, and therefore the do-not-call registry is consistent with the the First Amendment.

Telemarketers opposed the annual access fees the do-not-call list required them to pay to obtain the phone numbers of consumers who have signed up for the national do-not-call registry. The fee is $25 per area code of data and the maximum annual fee is capped at $7,375. The telemarketers argued that this fee was unconstitutional as it placed a burden on protected speech. The Court disagreed and upheld the fee. Additionally, the Court concluded that the FCC's exception for established business relationships is valid. Finally, the Court concluded that the FTC did have statutory authority to promulgate its do-not-call regulations under the Telemarketing Act. The full text of the Court of Appeals Decision is available on the NEM Website.

FCC Issues Broadband over Power Lines Rulemaking

FCC has initiated a rulemaking proceeding on Broadband over Power Lines (BPL) technology. The rulemaking proposes Part 15 rule changes on the measurement of radio frequency energy emissions from BPL equipment and the establishment of particularized interference mitigation requirements.

FCC also requests comment on specific radio frequency measurement guidelines for BPL devices and other carrier current systems. However, FCC is not proposing any changes to existing applicable emission limits. The full text of the BPL NOPR Press Release is available on the NEM Website, and the full text of the BPL NOPR will be posted when made available electronically.

NEM Submits Comments on Compensating Must-Run Units

NEM submitted comments on Compensation for Generating Units Subject to Local Market Power Mitigation In Bid-Based Markets and PJM Interconnection. In the Comments NEM recommended that: 1) offer caps should be minimal and only used upon a showing of actual intent to manipulate prices; 2) at a minimum, PJM should avoid the imposition of a retroactive tax on reliability, and post-1996 units should continue to be exempt from local market mitigation unless there is a demonstrated intent to manipulate prices; and 3) local market auction processes should be clarified and standardized and conducted in a non-discriminatory, competitively neutral fashion amongst generation, transmission and load response alternatives. The full text of NEM's Comments is available on the NEM Website.

Many thanks to Steve Wemple of ConEd Solutions for his assistance with this proceeding.

Initial Meeting Planned To Examine Future of Electric Market

The Illinois Commerce Commission is planning a series of meetings and workshops to examine the future of the stateís electric market and identify public policy issues surrounding deregulation of the electric industry in Illinois. The stateís mandated transition period from a fully regulated electric market to a largely deregulated electric market concludes at the end of 2006. A meeting will be held February 26, 2004, for all interested stakeholders. The meetings will be used to develop a schedule of workshops designed to explore solutions to market structure challenges, and determine what regulatory or legislative changes may be needed to address the new marketplace in Illinois.

In conjunction with the Illinois Commerce Commission's Post 2006 Initiative, Staff released a "White Paper" that provides an introduction to the subject and identifies topics that Staff believes need to be addressed. The February 26, 2004, meeting will be held at 9:30 AM in the main hearing room of the Commission's Chicago office. The schedule for the participants' input to the Issues Outline will be determined at the February 26th meeting. The full text of Staff's White Paper is available on the NEM Website.

NEM will convene a conference call to formulate its approach to this proceeding on February 23 , 2004 at 2 PM EST. The conference call number is 703-788-0600, and the passcode is 209353.

Department Authorizes Gas Cost Recovery Factors

The Department authorized Aquila Networks to incorporate into its rates an adjusted gas cost recovery (GCR) factor of up to $6.7643 per thousand cubic feet, from January to March 2004. The GCR will be subject to a Quarterly GCR Ceiling Price Adjustment Mechanism. The Department also authorized Peninsular Gas Company to incorporate into its rates uniform gas cost recovery factors of up to $0.56081 per hundred cubic feet for the billing month of January 2004 and $0.64581 per hundred cubic feet for each of the billing months of February through December 2004. The full text of the Aquila Order and the Peninsular Order is available on the NEM Website.

New York
Date for ESCO EDI Phase III Testing is Extended

The Commission issued an Order extending the deadline for ESCOs to complete Phase III Electronic Data Interchange (EDI) testing. The NYPSC stated that ESCOs cannot complete their Phase III EDI testing requirement unless the utilities have first completed their Phase II EDI testing. Therefore, ESCOs seeking to serve retail customers in the service territories of the utilities that have not finished Phase II EDI testing cannot meet their obligations to conclude Phase III EDI testing by the February 19, 2004, deadline. Accordingly, the Commission extended the time for compliance with the Phase III EDI testing requirements for ESCOs' retail operations in the service territories of utilities that have not finished Phase II testing. The date is modified to require completion of Phase III testing for and commencement of Electronic Data Interchange within 60 days after the date the utility in the service territory where the ESCO seeks to operate completes its Phase II EDI testing. The full text of the Order is available on the NEM Website.

Renewable Porfolio Standard Conference Scheduled

A technical conference on renewable portfolio standards will be held Monday, March 8, 2004, at 1:00 PM at the Commission's Albany offices. The principal purpose of the conference is to afford parties the opportunity to discuss with and question GE Power Systems Energy Consulting and NYSERDA regarding the Phase 1 Report released February 2, 2004, entitled "The Effects of Integrating Wind Power on Transmission System Planning, Reliability and Operations." Parties will have until March 18, 2004, to file supplemental comments in this proceeding regarding the Phase 1 Report and the issues discussed at this technical conference.

Columbus Southern Power and Ohio Power Submit Rate Stabilization Plan

Columbus Southern Power (CSP) and Ohio Power (OP) submitted an application for approval of a post-Market Development Period (MDP) Rate Stabilization Period (RSP). The RSP provides for increases in 2006, 2007, and 2008 in the rates customers pay for generation service. The RSP caps the annual increases for generation rates.

Under the proposal, during the MDP and the RSP, Columbus Southern Power will make available to the first 25% of residential class load that switches to a competitive supplier a shopping incentive of 2.5 mills/kWh. For the period from January 1, 2006 through December 31, 2007, the first 20% of Ohio Power residential customer load that was on OP's standard service tariff as of December 31, 2005, that switched to a competitive supplier will not be charged the Regulatory Asset Charge Rider during the 2006-2007 two-year period. There will be no shopping inentive for any OP customers during the RSP. The full text of the Proposed RSP is available on the NEM Website.

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