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July 30, 2004
Upcoming NEM Events

Please reserve the dates September 29-30, for NEM's Fall Industry Leadership Roundtable to be held in Boston. The meeting will be held at the Hyatt Harborside. Please reserve your room ASAP (617-568-1234 or 1-800-233-1234) to receive the NEM rate of $189 per night. Many thanks to Nate Owen and Bob Potter of Energy Services Group for hosting the meeting. Many thanks also to Mike Foley of First Data Corporation for offering to sponsor other parts of the meeting.

NEM's Winter Executive Committee Meeting will be held in Newport Beach, California on January 19-20, 2005. Many thanks to Peter Weigand and Ian Carter of Commonwealth Energy for offering to host this event.

Lastly, please also reserve April 20-22 for the NEM Spring industry event in Washington, DC at the Marriott Metro Center.

Comments Sought on Revision to Antitrust Laws

The Antitrust Modernization Commission was established to determine whether changes to antitrust laws are needed and to report to Congress on its findings. The Commission is requesting public comment on antitrust issues that are appropriate for it to study. Comments are due September 30, 2004. The full text of the Request for Comments is available on the NEM Website.

ALJ Recommended Decision on Consumers' Stranded Costs for 2002

The ALJ has issued a Recommended Decision on Consumers' stranded costs for 2002. The ALJ found that Consumers’ net stranded costs for 2002 equal $10,541,000, plus interest at the rate of 7% up to July 2004, for a total amount of $12,068,000 which results in a corresponding stranded cost recovery charge of $0.002837 per kWh. The ALJ recommended that Consumers be permitted to use 50% of securitization bond savings to reduce bundled commercial and industrial customer rates in 2005. Also, after the 50% share of accumulated securitization bond savings allocable to choice customers has been fully used, Consumers should be able to lower the offset to an amount that permits the savings to be fully used on an annual basis and based on the forecasted choice sales level. Consumers should be required to provide an annual accounting of the amount used to verify the remaining balance of any securitization bond savings allocated to choice customers. The ALJ also recommended that a $0.001102 per kWh credit be applied to each rate class’s energy charge for a 12-month period. The full text of the Recommended Decision is available on the NEM Website.

New Jersey
Basic Generation Service Hearing

The BPU will hold a legislative-type hearing on the 2005 Basic Generation Service procurement process on September 9, 2004, at 1PM in the eighth floor hearing room. The purpose of the hearing is to take comments on the current BGS proposals. Interested parties will be allotted approximately ten minutes to present their comments followed by questions from the Commission. Those interested in participating should contact Peter Yochum ( by September 7.

New York
Central Hudson Retail Access Collaborative Filing

As required by the Commission, Central Hudson convened a collaborative to discuss retail access issues. As a result of these efforts, Central Hudson has filed tariffs to offer consolidated billing with purchase of receivables for its gas and electric choice programs. Central Hudson will purchase accounts receivable, without recourse, at an initial discount of 0.90%. The filing also includes a requirement that ESCOs who take company pipeline capacity release, ramp up from the current 5-month requirement to a full 12-month requirement by November 1, 2006.

The subjects of eliminating the practice of showing pipeline release, storage, and peaking service charges on gas customer bills; providing more detail and adjusting gas billing determinants for annual cash out; establishing a retail marketing program whereby ESCOs guarantee savings; and other issues of mutual interest will be the topics for Phase 2 of the Central Hudson Collaborative.

The full text of Central Hudson's Filing is available on the NEM Website.

Change to O&R Switch and Save Program

Beginning in August, O&R will modify its Switch and Save Program to permit consumers the additional option of choosing the supplier they do business with. Other aspects of the Program, including the 7% introductory discount and the option to be randomly assigned to a supplier, will still remain in effect. The Program will now be called "PowerSwitch." O&R will be promoting this change to consumers in the coming months in bill inserts as well as an O&R Supplier Catalog, to include information about each supplier as provided to O&R.

Hearing Examiner Report on Washington Gas Light Creditworthiness Standards

The Hearing Examiner has issued a Report and recommendations on Washington Gas Light's (WGL's) creditworthiness requirements. The Hearing Examiner found that the creditworthiness requirements must be expressed in WGL's tariff to provide suppliers with improved financial certainty. With respect to WGL's financial security methodology, the Hearing Examiner found that: 1) the use of a design day in the methodology is unreasonable because it, "grossly overstates the amount of gas that WGL would have to provide under average weather conditions," and a 30-year average peak winter day, adjusted for storage and peaking supplies would be a more reasonable volume measure; 2) the delivery risk coverage factor (representing the time period WGL would have to provide default service) of 60 days is unreasonable and should be 30 days; 3) the prospective gas price component of the delivery risk formula, calculated as the highest NYMEX price for the upcoming heating season, is reasonable; and 4) the use of a peaking and storage adjustment factor of 50% of the daily required volume in the delivery risk methodology is reasonable. The Hearing Examiner recommends these changes be implemented on an interim basis pending a WGL tariff filing on a proposed creditworthiness standard methodology. The full text of the Hearing Examiner's Report is available on the NEM Website.

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