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.

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.

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.

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(mvoltz@cenhud.com), 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: rose_hamm@dps.state.ny.us.

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 paul_emerson@dps.state.ny.us 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: Mark_Marini@rge.com. 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.