Document Search
Site Search
Advanced Search
Updates & Alerts
News & Media
Upcoming Meetings
Deregulation Library
Member Services
ACN Energy
AES Contellation New Energy
AGL Resources
Agway Energy
Allegheny Energy Supply Company
Alliance Data Systems
APS Energy Service Corporation
CASA - Customer Acquisition Specialists of America, Inc.
ConEdison Solutions
Customer Link
Deloitte & Touche
Electric America
Elster Electricity
Energy America
Energy Clear America
Energy Services Group
Energy Source (Regional Member)
Excelon Corporation
Financial Engineering Assocation, Inc.
First Energy (Regional Member)
InterContinental Exchange, Inc.
Interstate Gas Supply
IMServ (Invensys)
InBusiness TeleServices (Regional Memembers)
KeySpan Energy
New York Mercantile Exchange
Nicor Energy, Inc.
OM Energy
Ontario Power Generation
Peoples Energy
Pinnacle West
Prebon Energy
ProLiance Energy
Sempra Energy Soulutions
Shell Energy Corporation
SPi Group
South Star Energy
Teco Power Services
Total Gas and Electric, Inc.
Tractebel Energy Services, Inc.
Vectren Source
WPS Energy
July 17, 2003
Upcoming NEM Meetings and Conferences

Our Fall meeting will be held October 7-8, 2003. Centrica has generously offered to host the meeting at the fabulous Queen’s Landing Inn and Conference Resort at Niagara-on-the-Lake in Ontario. The NEM rate will only be available through August 18, 2003. Please reserve your room early at (905) 468-2195

The easiest way to arrive is to fly into Buffalo and drive across the border. However, there is shuttle service available at the Toronto Airport. It is about a half hour car drive, but it should be quite worthwhile. There will be break out sessions for (1) Wholesale, Trading, Credit, Clearing, price reporting/manipulation and related technology issues, (2) Retail and national consumer education and PR campaign issues, (3) Technology Standards and Implementation issues. All members and selected prospective members are encouraged to attend.

A block of rooms will be reserved for October 6-7, 2003, at the rate of $265/night (Canadian).

Please also mark your calendars for March 31 and April 1, 2004, for NEM's Annual Membership Meeting and National Restructuring Conference. It will be held in Washington, DC at the Capitol Hyatt. Chairman Wood, NARUC President-elect Wise and a number of other important speakers have already confirmed. If you wish to be listed as a sponsor of this event, please contact headquarters ASAP as advertisements will be coming out shortly.

The Winter Executive Committee meeting is tentatively scheduled for January 20th, 2004, in Houston.

Trading and Risk, Profit and Protection Forum

Energy Markets magazine is presenting “Executive Forum: Trading and Risk: Profit and Protection” to bring industry experts together to examine risk and options for mitigation. The event is particularly timely for gas producers, large end-users, utilities and anyone else who finds his or her organization involved in the volatile and non-transparent energy commodity marketplace. The one-day event, will be held September 4, 2003, in Houston. Please see the attached Brochure for more information.

NEM Submits Comments on Safe Harbor

NEM filed comments on price indices and the proposed Safe Harbor provision. NEM submitted that a "safe harbor" which in effect creates a regulatory presumption of good faith absent a showing of wrongdoing could lessen the current regulatory uncertainties for those collecting and reporting data correctly. NEM stated that absent wrongdoing, this mechanism could be a low cost, efficient means of incenting voluntary compliance with strict, transparent, credible and auditable data reporting and collecting protocols. NEM urged the Commission to encourage voluntary compliance with these quality control protocols and data standards before implementing mandates that may prove costly to develop, implement and maintain. NEM also urged the Commission to encourage the use of the lowest cost XML-based technology standards as well as standard operational market design standards that will move the industry toward greater transparency, data utilization and ultimately greater long-term reliability and liquidity in the wholesale and retail energy markets. The full text of NEM's Comments are available on the NEM Website.

Nomination Hearing Postponed

Senate Energy Committee Chairman, Pete Domenici, has postponed a nomination hearing this week for Federal Energy Regulatory Commission nominee Suedeen Kelly. The hearing will be delayed until after the August recess, Flint said, making Senate confirmation of either Kelly or fellow FERC nominee Joseph Kelliher before September highly unlikely.

ALJ Initial Decision Finds Enron violated FPA

A FERC administrative law judge (ALJ) issued an Initial Decision ordering Enron to repay $32.5 million for violating electricity trading rules during the California energy crisis of 2000-01. The ALJ found that Enron violated the Federal Powers Act when it gained effective control of El Paso Electric's generation in 1997 through a power consulting services agreement but did not tell FERC. Under the arrangement, Enron traders staffed El Paso Electric's trading desk during regular hours, increased Enron's market share and gave it access to sensitive market information. The ALJ stated that there was evidence that Enron was not merely acting as an agent or broker under the agreement. The AJL Ruling also reiterated FERC's finding in June that Enron's wholesale electricity trading license should be revoked. The ALJ's decision now goes to the Commission, which can reject, accept or modify the ruling. The full text of the ALJ Initial Decision is available on the NEM Website.

Dunn Says Legislature Will Act On Electricity Issues

Senator Dunn predicted that the state Legislature will act on electricity issues before its September recess, despite the apparent death of SB 888. Dunn said SB 888 could be revived in the current session either by getting a waiver from the Assembly Rules Committee, which would require a two-thirds vote, or by amending another bill to add SB 888's language.

Phase II Settlement Filed with Commission

Maryland utilities, competitive suppliers and Staff filed agreed upon terms and procedures for implementation of the Phase I Settlement, which included a set of terms and procedures for the provision of Standard Offer Service (SOS) and default service to customers, through the competitive selection of wholesale supply. The Phase II Settlement includes a Model Request for Proposals (RFP), which encompasses the bid request process, the bid evaluation methodology, and the timeline for the RFP process.

According to the Phase II Settlement, if, after conducting the bid procedures a utility still has SOS load that has not been awarded to a supplier, then the utility will initially supply the unserved load and will pass all the costs of such purchases on to customers in the retail rates charged for the service for which the purchases are made. Within 5 business days of it being determined by the utility that the load is unserved, Staff will convene a meeting of all Parties to discuss alternative ways to fill the unserved load. The Settlement states that if any load is left unserved after a supplier defaults and the load has been offered to other suppliers, then the utility will initially supply the defaulted load and as soon as practicable the utility will auction the remaining term of the defaulted Full Requirements Service Agreement (FSA), for the same terms and conditions (including prices) as in the FSA. The full text of the Phase II Settlement and all the Appendixes are available at

MPSC Report on Natural Gas Prices

The Michigan Public Service Commission issued an updated report on expected natural gas prices and supplies in Michigan. The report indicates that natural gas wellhead prices will likely remain in the range of $5 to $6 per thousand cubic feet (Mcf) for the remainder of the year. This is more than 30 percent higher than the average price of $3.87 per Mcf that prevailed in 2000 and 2001. Higher wellhead prices faced by Michigan's utilities are beginning to make their way to residential customers. A comparison of the prices charged by Michigan's four largest natural gas utilities shows that price increases from July 2002 to July 2003 have ranged from 13.5 percent to 57.4 percent. When other charges are factored in – such as distribution and customer charges – estimates indicate that residential customers of these four utilities could pay a total of $53 to $172 more to heat their homes during the upcoming winter months than they did last winter.

Contributing to higher natural gas prices are low storage levels, rapid depletion of low cost supplies and increasing demand – particularly for electricity generation. Michigan is the sixth largest natural gas consuming state, accounting for 4.3 percent of U.S. consumption. Over 78 percent of homes in Michigan are heated with natural gas. The MPSC will hold a public hearing at 9 AM on July 22, 2003 to enhance public awareness of natural gas price increases and to discuss steps consumers can take to mitigate the increases. The full text of the MPSC Report is available on the NEM Website.

New York
NEM Submits Comments on Costs of Complying With HEFPA

NEM submitted comments on the costs small businesses will incur to comply with HEFPA. NEM stated that it is concerned about the compliance costs of the HEFPA rules on small ESCOs. NEM submitted that the HEFPA rules could impose substantial initial and annual compliance costs on ESCOs that could easily render them unable to implement the business plans necessary to effectively compete in a deregulated energy market. NEM submitted that a low cost, efficient and equitable means of implementing HEFPA requirements quickly would be to require distribution utilities to purchase ESCO receivables on an interim basis pending the ESCOs ability to develop and invest in the infrastructure necessary to fully comply with these new rules independently. Thereafter, NEM stated that these functions can be outsourced and consumers can get shopping credits equal to the embedded costs of providing these services. NEM submitted that for those entities who have or can make the investments necessary to replicate the utility HEFPA functions immediately, customers migrating to these entities should be eligible for embedded cost shopping credits immediately.

NEM also submits that if ESCO HEFPA requirements are extended to multi-family dwellings, it will impose unreasonable costs on ESCOs and fundamentally change the relationship between ESCOs and commercial business owners of multi-family dwellings. NEM recommends that the Commission should clarify that ESCO HEFPA requirements should be limited to direct residential customers and not applied to multi-family buildings. The full text of NEM's Comments is available on the NEM Website.

Proposed Rules on Wholesale Market Design in ERCOT

The Commission is currently developing substantive rules that will be the basis for the wholesale market design in ERCOT. The PUC issued new proposed rules setting forth basic principles for the ancillary service markets operated by ERCOT, including both energy and ancillary capacity service markets. The rule includes requirements for ERCOT to: allow market participants to self-schedule and bilaterally contract for energy and ancillary capacity services, to the extent consistent with system reliability; require the submission of resource-specific bid curves for energy and ancillary capacity services that ERCOT competitively procures a day ahead of an operating day or in the operating day; directly assign all congestion rents to the resources causing the congestion; and use nodal energy prices for resources and zonal energy prices for loads. Under the proposed rules ERCOT will fully implement the requirements of an approved wholesale market design by March 1, 2006. The full text of the Proposed Rules is available on the NEM Website.

Web Conference on Dominion Retail Access Pilot Programs

Dominion Virginia Power will conduct a web conference for Competitive Service Providers and Aggregators on July 21, 2003, from 1PM to 3PM EST. The purpose of the web conference will be to explain and discuss the filed proposed revisions to the retail pilot programs, as well as solicit comments. The agenda items for the call include: 1) Dominion Virginia Power's filing with the Commonwealth of Virginia to join PJM; 2) a summary of pilot program revisions submitted on June 25; 3)Commission Staff's Report recommendations submitted on July 15; 4) illustrative market prices/wires charges and pilot prices-to-compare for 2004; and 5) the pilot timeline.

Interested parties may participate as follows: 1) for the audio portion: Chairperson - Mary Edwards, conference number - 1-866-740-1260 and access code - 7716407; 2) for the web portion: website address -, click on "Join A Conference," access code - 7716407, enter name and email address and click "register."

3333 K Street, N.W., Suite 425
Washington, D.C. 20007
Tel: (202) 333-3288     Fax: (202) 333-3266

© Copyright 2001 National Energy Marketers Association