January 5, 2001


 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. 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.

 Virginia Commission Staff to Form Electric Retail Access Work Group

The Virginia SCC Staff is forming a work group to develop proposed final rules for the start of electric retail access. NEM members interested in participating should contact headquarters ASAP.

Federal Issues

 Energy Secretary Richardson Extends Emergency Order

Secretary Richardson has extended the termination date of the emergency order requiring certain suppliers to sell electricity when the California ISO certifies there is an inadequate supply to January 6, 2001. The full text of the Amended Order is available on the NEM Website.

 Energy Information Administration (EIA) Proposed Surveys on Interruptible Natural Gas Contracts

EIA requested emergency clearance by the Office of Management and Budget for Proposed Surveys to collect information on interruptible natural gas contracts in the Northeast for the period January 1-April 8, 2001. The notice of the Proposed Surveys was published in the Federal Register on December 26, 2000, and comments were due January 2, 2001. The Proposed Surveys will collect information from natural gas suppliers on deliveries and interruptions in service to customers, from petroleum product suppliers on sales, inventories, and customers that can switch between natural gas and petroleum, and from large energy consumers on energy-related matters. The full text of the Notice of the Proposed Surveys, EIA's Supporting Statement, Form 911A Biweekly Natural Gas Supplier Survey, Form 911A Cover Letter, Form 911B Biweekly Petroleum Product Suppliers' Sales Report, Form 911B Cover Letter, Form 911C Biweekly Natural Gas and Petroleum Customer Survey, and Form 911C Cover Letter is available on the NEM Website. The full text of NEM's Comments and a Restructuring Today Article on NEM's comments are also available on the NEM Website.


 FERC Opposes Southern California Edison Petition for Cost-Based Rates

FERC filed a motion opposing Southern California Edison's petition filed at the U.S. Court of Appeals for the D.C. Circuit requesting that FERC be directed to determine and fix cost-based rates for sales in the ISO and PX markets. The full text of FERC's Motion is available on the NEM Website.

 NEM Comments on Natural Gas Pipeline Affiliate Issues

NEM has filed comments and a request to participate in Staff's conference on natural gas pipeline affiliate issues urging that access to pipeline capacity be provided on an open, non-discriminatory, real-time basis, at transparent, liquid, and reasonable prices. The full text of NEM's Comments is available from NEM headquarters.

 Staff Conference on Business Practice Standards of Interstate Natural Gas Pipelines

Staff will convene a technical conference on February 27, 2001, on standards to permit shippers to designate and rank the contracts under which gas will flow on a pipeline's system. Requests to participate in the conference are due January 16, 2001. Comments may be filed up to thirty days after the conference. The full text of the Notice of Staff Conference is available on the NEM Website.

 PJM Filing on Fixed Transmission Rights

PJM has submitted a filing to change its operating agreement and OATT to limit the amount of Transmission Congestion Credits an entity that acquires a Fixed Transmission Right (FTR) through the FTR auction process may receive if it enters Increment Bids or Decrement Bids in the Day Ahead Market that result in an increase of Transmission Congestion Charges at or near the receipt or delivery point of the FTR. The PJM asserts the changes are needed to prevent market abuse. The full text of the PJM's Filing, Redlined Operating Agreement, Revised Operating Agreement, Redlined OATT, and Revised OATT are available on the NEM Website.

 NEPOOL Filing on ICAP Arrangements

The NEPOOL Participants Committee submitted a filing on its efforts to develop alternative market-based reliability assurance mechanisms to be used rather than installed capacity (ICAP) arrangements. NEPOOL reports that it expects to develop proposals for forward reserves as an alternative to ICAP. The full text of the NEPOOL Filing is available on the NEM Website.

 NEPOOL-ISO New England Filings on In Service

NEPOOL and ISO New England have filed a motion requesting the Commission reverse its Order requiring NEPOOL to honor existing In Service agreements, with customers that wish to continue the agreements, until they expire. NEPOOL and ISO New England have also filed a report on compliance with the Order on In Service. The full text of the NEPOOL-ISO Motion and Report are available on the NEM Website.

 Order on ISO New England ICAP Deficiency Charge

The Commission rejected ISO New England's proposed $0.17/kW month ICAP deficiency charge and ordered ISO New England to file tariff sheets to reinstitute an ICAP deficiency charge at the administratively-determined price of $8.75/kW month, to be effective August 1, 2000. The full text of the Order is available on the NEM Website.

 NYISO Files Governance Report

NYISO filed a report asserting there is no need to modify its governance structure with respect to sector voting and representation. The full text of the NYISO Governance Report is available on the NEM Website.

 NYISO Clarification of Generation Report

NYISO has filed a clarification of the generation issues report it submitted to the Commission. NYISO clarified that it is still reviewing the circumstances in which over-generation should be compensated as well as the continued imposition of regulation performance penalties. The full text of NYISO's Filing is available on the NEM Website.

 Staff Supports Settlement on Member Systems Transmission Service Agreements

Staff has filed comments in support of the proposed Member Systems settlement pertaining to transmission services provided to the New York Power Authority (NYPA) by NYSEG and Niagara Mohawk to deliver NYPA-supplied electricity to the NY State Rural Electric Cooperative Association. The full text of Staff's Comments is available on the NEM Website.

 Technical Conference on NYISO Issues

Pursuant to the Commission's Order, a technical conference to address NYISO issues of existing market flaws and the development of a timetable for correcting the problems has been scheduled for January 22 and 23, 2001. All interested persons may attend.

State Issues

New York

 Commission Approves Keyspan Gas Settlement

The Commission has approved the Keyspan Gas settlement agreement with modifications. The settlement provides for a marketer incentive payment equal to 8% of delivery charges incurred by marketers' firm customers each month. The full text of the Order Approving the Settlement and the Order Modifying the Settlement are available on the NEM Website

 Committee Report on Distribution Generation

The Designated Parties Committee in the Distributed Generation (DG) proceeding has issued a report recommending the adoption of distributed generation on a three-year test basis as an alternative solution to the needs of utility systems. The Report recommends annual utility screening of forecasted distribution system needs that could be satisfied through customer-owned DG and utility issuance of RFPs for DG to satisfy those needs. A meeting of the Distributed Generation working group will be held on January 22, 2001, at the Commission's Albany offices to discuss the report. The full text of the Report on Distributed Generation is available on the NEM Website.

 POLR Proceeding

The ALJs in the POLR proceeding have issued a ruling requesting Staff to circulate a draft proposal prior to January 12, 2001, to negotiate consensus policy recommendations to present to the Commission. Questions about the proposal will be considered at the January 17-18, 2001, plenary session, and Staff will then meet with parties to identify areas of agreement. A formal pre-hearing conference will be held on February 20, 2001, at the Commission's Albany offices to consider progress made in negotiations and to establish a schedule for the remainder of the proceeding.

 Order on Utility Demand Response Programs

The Commission has issued an Order requiring the utilities to file a report by January 29, 2001, on demand response goals for the next three years. The Reports are to include programs to make voluntary real-time pricing tariffs available to customers, tariffs to increase participation by full service utility customers in the emergency load curtailment program developed by NYISO, and initiatives to accelerate the installation of interval metering. The full text of the Order on Demand Response Programs is available on the NEM Website.

 Comments Sought on Commission Adoption of UBP Document

The Commission is seeking comments on the possible adoption of the Uniform Business Practices Report and other changes to New York's existing uniform business rules. Comments are due January 22, 2001. The full text of Commission's Request for Comments is available on the NEM Website.

 Staff Filing in NYSEG Back-Out Rate Proceeding

Staff has filed a letter with the Commission arguing that, contrary to NYSEG's assertion in its Reply Brief, a change to the back-out rate does not constitute an uncontrollable cost under the terms of NYSEG's settlement for it to recover. NYSEG submitted a letter in response maintaining that an increase in its cost responsibility, imposed as either an adder or a floor, would constitute an Uncontrollable Cost. The full text of Staff and NYSEG's letters is available from NEM headquarters.

New Jersey

 Board Order on Customer Account Services

The Board signed an Order in the Customer Account Services proceeding approving the Conectiv, GPU and PSE&G settlement. The full text of the Order is available on the NEM Website.


Commission Approves Monongahela Power Compliance Tariff Filing

The Commission has approved Monongahela Power's compliance tariff filing subject to modifications. The Commission ordered that specific procedures for the termination or suspension of a certified supplier be added and that the provision on resale be conformed to the Commission's findings in other proceedings. The full text of Monongahela Power's Electric Service Tariff and Certified Supplier Coordination Tariff and the Commission's Order are available on the NEM Website.

 Workshops on Electric Utilities Transmission and Distribution Separation Filings

Workshops will be convened to give interested parties the opportunity to comment on the electric utilities transmission and distribution separation filings with FERC as follows: CG&E - March 12, 2001 at 9AM; DP&L - March 12, 2001 at 1PM; AEP - March 13, 2001 at 9AM; and Allegheny Power - March 13, 2001 at 1PM. The full text of the Order Convening Workshops is available on the NEM Website.

 Consumers Counsel Filing on FirstEnergy Market Support Generation

The Consumers Counsel has made a filing on the issue of Market Support Generation (MSG) in the FirstEnergy settlement. The Consumers Counsel argues that a supplier serving a retail customer with MSG should not lose the MSG reservation related to that customer if the customer moves within the service territory of a particular First Energy operating company. The full text of the Consumers Counsel's Filing is available on the NEM Website.


 Commission Approves PECO Energy Petition to Recover Local Education Costs

The Commission approved PECO Energy's petition to recover local education costs finding that all consumer education costs incurred by a natural gas distribution company are recoverable through an automatic adjustment clause. The Commission also found that local education costs should not appear as a separate line item on customer bills. The full text of the Order is available on the NEM Website.

 Commission Approves PPL Electric Filings

The Commission approved PPL Electric's intangible transition charge (ITC) and competitive transition charge (CTC) reconciliation filings and directed the company to file tariffs reflecting revised ITC and CTC rates to effective January 1, 2001.


 Commission Seeks Comments on Transition Plan to Retail Choice

The Commission issued an Order seeking comments on Staff's draft plan for transition to full retail choice. Staff recommends that AEP-VA, Allegheny Power, Delmarva and Kentucky Utilities should transition to full retail choice on January 1, 2002. With respect to Dominion Virginia Power, Staff recommends that: 1) as of January 1, 2002, full retail choice should be made available to residential and small commercial customers in the Northern Region and one-third of the system industrial load should be opened to retail choice; 2) as of September 1, 2002, full retail choice should be made available to residential and small commercial customers in the Central/Western Region and two-thirds of the system industrial load should be opened to retail choice, and 3) as of January 1, 2003, full retail choice should be made available for the Eastern Region and all industrial load should be opened to retail choice. Staff also recommends that incumbent utilities should provide competitive service providers a mass list of customer information after allowing customers an opportunity to opt-out. Comments are due on Staff's Draft Plan by February 15, 2001. The full text of the Order and Staff's Draft Plan are available on the NEM Website.

 Virginia Power Proposed Changes to Pilot Program Wires Charges

The Commission has ordered the establishment of a comment period for Virginia Power's proposed changes to its pilot program wires charges. Comments are due January 30, 2001. The full text of the Commission's Order and Virginia Power's Filing are available on the NEM Website.


 Commission Adopts Rules on Natural Gas Marketer Billing Practices

The Commission adopted rules on natural gas marketer billing practices providing that a bill shall: 1) be mailed by a marketer (or its designated billing agent) to a retail customer within forty-five (45) days after the marketer has received EDC information from the electing distribution company; 2) be substantially correct; 3) include clear and unambiguous statements that readily identify the billing period, the cost per unit, the interstate capacity charge assessed, the base charge, the customer service charge, the credit owed or balance due, and a description of charge contained in the bill; and 4) state a toll-free telephone number that customers may use for service inquiries and complaints. The full text of the Order Adopting Natural Gas Marketer Billing Practices is available on the NEM Website.


 Testimony Filed in NICOR Gas Pilot Program Proceeding

Staff and the Citizens Utility Board (CUB) have filed testimony in the NICOR Gas pilot program proceeding. Staff questions the need to implement OFOs applicable to suppliers serving customers in the pilot and the $10 charge for each customer account added to a supplier's group. Staff recommends that: 1) customers should have the option of designating their supplier as the recipient of NICOR's transportation bill; 2) customers should have the option of receiving a transportation services bill for information purposes only and to remit one payment for transportation and supplier services directly to the supplier, with the supplier to remit payment for transportation services to the company; and 3) customers should not be held responsible for the failure of a supplier to fully reimburse the Company for services rendered. Staff also asserts, with respect to the Supplier Aggregation Service Rider, that the supplier application charge should be reduced to $1,385, the current $200 group charge should apply to larger size groups with a $100 charge for smaller size groups to be added, and the current $1 account charge should be reduced. The full text of Staff's Testimony, Part 1 and Part 2, is available on the NEM Website.

CUB recommends that: 1) uniform price disclosures should be required of all natural gas suppliers and NICOR Gas; 2) the aggregation charges and switching fees should be eliminated; 3) stricter affiliate relations practices should be imposed, including the prohibition of the use of a similar name or logo by a NICOR gas affiliate; 4) the practice of providing a customer's credit history to a supplier that has obtained the customer's authorization should be stopped; and 5) the company's tariff should make provision for customer switching in writing, by telephone or via Internet. CUB testimony further asserts that the NICOR gas pilot provides its affiliate with a competitive advantage, hindering development of the competitive market. The full text of the CUB Testimony Part 1, Part 2, and Part 3 is available on the NEM Website.


 White House to meet on California Energy Crisis and Commission Grants Emergency Utility Rate Increases

The Commission has issued a decision allowing PG&E and Edison to establish an interim surcharge to increase the electric bill of each customer by one cent per kWh, applied on a usage basis, subject to refund and adjustment to be in effect for 90 days. The decision also provides that PG&E and Edison must establish a balancing account with customer class-specific sub-accounts to track the revenues from the surcharge and must apply the revenues to ongoing procurement costs. The full text of the Decision is available from NEM headquarters.

The White House has called a meeting on the crisis for next week in Washington DC. NEM is formulating supply and demand responses for the new administration.

 Proposed Settlement in PG&E Gas Accord II Proceeding

A proposed settlement agreement has been prepared in the PG&E Gas Accord II proceeding. Due to confidentiality concerns, NEM members that wish to review the full text of the proposed settlement should contact headquarters.