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July 8, 2005
USCL Corporation Nominated to NEM Executive Committee

NEM is pleased to announce that USCL Corporation has been nominated to the NEM Executive Committee. USCL is an emerging stage company that has developed state-of-the-art utilities metering, data telemetry, customer information display, and demand side automatic load control equipment. USCL will be represented within NEM by Tom Tamarkin, President and CEO, and Robert Block, Director. Mr. Tamarkin has been nominated to Chair NEM's Strategic Demand Response and Price Liquidity Committee as well as to Co-Chair NEM's Advanced Metering and Information Technologies Committee. Mr. Block has been nominated to Chair NEM's National Energy Technology Policy Committee.

NEM Summer Executive Committee Meeting

NEM is currently planning its Summer Executive Committee Meeting. The meeting is scheduled for July 12-13, 2005, in Buffalo, New York. Please mark your calendars and plan to join us. Please use this hotlink to register.

During the Summer Executive Committee Meeting, we elect our new leadership for the coming year, assess the priorities we identified at the January Executive Committee Meeting and identify any midcourse corrections we need to take for our advocacy agenda for the remainder of the year. Additionally, we will debate and vote on: 1) key retail energy restructuring issues including structure of retail auctions, and opt-in requirements when utility price increases; 2) key wholesale energy restructuring issues including structure of wholesale auctions; and 3) review existing NEM gas, electric and code of conduct policy recommendations, development of recommendations on demand response strategies and pricing, and formation of policy drafting committee. We will discuss integrated advocacy and p.r. strategies for achieving specific migration targets as well as how to focus member resources on quantitative analysis in support. Use this hotlink to view the Agenda.

Colorado Oil & Gas Association Meeting

The Colorado Oil & Gas Association will hold its annual Rocky Mountain Natural Gas Strategy Conference & Investment Forum on August 1-3, 2005, at the Adam’s Mark in downtown Denver. The 2005 theme is “Energy, the West and the World,” focusing on the role of Rockies’ resources in the emerging global energy market. For additional details go to or call 303-861-2387.

Supreme Court Decision on Regulation of Broadband Cable Modem Service

The U.S. Supreme Court issued a decision in National Cable & Telecommunications Association v. Brand X Internet Services finding that broadband cable modem companies are not subject to mandatory common carrier regulation and mandatory open access requirements. In so doing, the Supreme Court overturned a Ninth Circuit decision that found the FCC's construction of the Communications Act to exempt cable companies providing cable modem service from mandatory open access was not permissible based on precedent from a previous case. The Supreme Court found that the Ninth Circuit should have applied Chevron analysis to the FCC's construction and that under Chevron the FCC's construction of the term "telecommunications service" was permissible. The full text of the Brand X Decision is available on the NEM Website.

Policy Statement on Independent Transmission Companies

FERC issued a Policy Statement to clarify that it would be willing to accept proposals from Independent Transmission Companies that have market participants as passive minority owners. The Commission set forth a non-exclusive list of factors it will take into account in determining if market participants are truly passive owners. The factors include: 1) percentage ownership held by market participants, 2) composition, rights and responsibilities of the board of directors, 3) corporate governance structure, 4) capital investment planning and policies and the relationship of those policies with those governing capital contributions or dividend reinvestment by passive equity holders, 5) role of executive compensation agreements and other management incentives in shaping independent operation and investment decisions, and 6) nature and strictness of limits on contractual service and legacy relationships with ex-affiliates that are market participants. FERC will consider proposals involving passive minority ownership of up to 49% ownership by a single market participant. The full text of the Policy Statement is available on the NEM Website.

U.S.-Canada Bilateral Reliability Oversight Group

The U.S. (including FERC and the Department of Energy) and Canada have formed a Bilateral Electric Reliability Oversight Group to consult on the formation of an international framework for reliability as well as mandatory reliability standards for North America. In its Terms of Reference, the Group committed to develop principles to guide the establishment of a reliability organization that functions on an international basis, coordinate the electric reliability standards process, and consult on policy and regulatory issues related to reliability. The full text of the Terms of Reference are available on the NEM Website.

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Type II SOS Service Settlement and Staff Testimony

Staff and other stakeholders filed a settlement on SOS procurement for Type II customers. Staff filed testimony as well. Type II customers are those C&I customers with PLC load less than 600 kW who take distribution service as follows: AP Schedule PH, BGE Schedules GL and P, Conectiv Schedule SGS-S customers with PLC greater than 60 kW and Schedules LGS-S, GS-P customers, and Pepco Schedules MGT-LV and MGT-3A. By Staff's definition (at least 50% of customers and load served by retail suppliers and at least 3 active suppliers), the Type II market is showing movement toward but is not yet workably competitive. They recommend there should be a division of Type II customers to better reflect customer usage and therefore improve retail market development.

The Type II settlement divides the current Type II customers into two different eligibility groups. "Type I-A would be made up of all current Type II customers with PLC demands equal to or less than 100 kW. The renamed Type I-A Non-Residential Standard Offer Service (“Type I-A SOS”) for these customers would be procured in the same manner and in concert with procurement of Type I SOS for the current Type I customers. Essentially the concept of a “small” C&I customer would be expanded up to 100 kW PLC demand. Service for customers with PLC demands greater than 100 kW would be called Type II-A Non-Residential Standard Offer Service (“Type II-A SOS”). Type II-A SOS would be procured twice yearly. The first procurement would be prior to the IOU’s current summer rating period and the second procurement would be prior to the non-summer period. Procurement and pricing would be the same as is currently the case for Type II SOS with the exception that procurement would be in a single tranche (plus a reserve tranche if the load is not fully subscribed) and there would be no volumetric risk mechanism. Type I-A SOS and Type II-A SOS continue under the provisions of the Type II settlement through May 2008. The Type II Settlement also provides for the expansion of hourly interval metering for specified Type II-A customers."

The full text of Staff's Testimony and the Type II Settlement are available on the NEM Website.

New Jersey
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Utilities File BGS Procurement Proposal

The utilities have filed a proposal for Basic Generation Service (BGS) procurement for the period starting June 1, 2006. The utilities propose that BGS procurement offers be conducted through a statewide auction process that simultaneously seeks offers for all BGS Load in the State. Two auctions will be held concurrently, one for larger customers on an hourly price plan (BGS-CIEP) and one for smaller commercial and residential customers on a fixed-price plan (BGS-FP).

The BGS-FP auction will be for one-third of the utilities total BGS-FP load and will seek offers for the supply of full requirements tranches for a three-year period. Payments to bidders will be shaped to reflect higher summer costs and lower winter costs. Each utility will have a load cap on the maximum number of tranches a bidder can win and serve. A statewide load cap is proposed as well.

The BGS-CIEP auction will seek offers for full requirements tranches for a one year term. The auction price will determine the Default Supply Service Availability Charge (DSSAC) for each utility, representing the cost of maintaining the availability of BGS-CIEP supply to all eligible customers. BGS-CIEP suppliers will receive a share of the DSSAC revenue proportional to the number of tranches won in the auction. The utilities propose a capacity cost of $20/MW-day in the summer and $5/MW-day in all other months. The transmission charges paid to BGS-CIEP suppliers will be based on OATT rates in effect on January 1, 2006 and will not be adjusted for changes in OATT rates. The full text of the Utilities' BGS Procurement Proposal is available on the NEM Website.

Order on Reliability Must Run Charges

The Board issued an Order approving the utilities' request to recover Reliability Must Run (RMR) charges through their BGS-FP and BGS-CIEP tariffs. The utilities must compensate BGS suppliers for RMR charges by the terms of their BGS Supplier Master Agreements and flow the difference between charges to customers and payments to suppliers through the BGS Reconciliation Charges. The new rates are to begin July 1, 2005. The full text of the Order is available on the NEM Website.

New York
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Retail Access Issues in Central Hudson and RG&E

The Commission's Office of Retail Market Development has highlighted two important retail access issues for the attention of marketers.

With respect to Central Hudson, in 2004, the company provided its customers a fixed price offering for gas commodity. Central Hudson and Staff are asking marketers to submit a letter ASAP to Michael Voltz(, Central Hudson's Director of Regulatory Affairs, regarding their plans to offer a fixed price gas option to residential customers. If several ESCOs confirm that they plan to offer a fixed price gas option, after PSC approval Central Hudson may discontinue providing a gas fixed price option to its customers. Last year, Central Hudson met its internal 10,000 residential and small commercial customer cap on the program, so it is clear that there is a customer need that ESCOs could meet in this service territory. If it is determined in the next two weeks that there is little interest from ESCOs, then the current program offering by Central Hudson would likely continue so that it would meet the needs of its customers. Central Hudson offers a purchase of receivables program as well as consolidated billing.

With respect to RG&E, its Voice Your Choice Program campaign involving several hundred thousand customers will begin in October and run through the end of December. Energy Fairs, consumer forums, and other media events will be held to solicit customer interest on the Voice Your Choice program. The next collaborative meeting in July, will discuss suggested changes to the customer enrollment kits and other parts of the message to consumers. For further information on the program, please contact Rose Hamm at:

If you are not currently an eligible ESCO in New York State, you must be deemed eligible by us and meet requirements (e.g., EDI) by the utilities in whose territories you plan to serve customers in. If you plan to participate in the campaign and are not yet an eligible ESCO, contact Paul Emerson at to start the eligibility process. In addition, if you need to schedule Phase III EDI testing with the utility prior to the campaign, please contact RG&E's Mark Marini at: You must meet RG&E's testing deadlines prior to printing of any campaign materials to ensure that your company name is included in the Voice Your Choice packet mailed to all customers in October. RG&E offers a purchase of receivables program as well as consolidated billing.

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