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June 10, 2005
NEM Summer Executive Committee Meeting

NEM is currently planning its Summer Executive Committee Meeting. The meeting is scheduled for July 12-13, 2005. 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.

Nominations for NEM's national policy leadership positions should be forwarded to headquarters ASAP.

FERC Chairman Wood Testifies on Electricity Infrastructure and Reliability

Chairman Wood testified before the House Government Reform Subcommittee on Energy and Resources about electricity infrastructure and reliability. Wood discussed how transmission investment is not keeping up with load growth. Increased transmission congestion is resulting in higher congestion costs being paid by consumers and the curtailment of otherwise economic transactions.

Wood stated that, "industry and its regulators (state and federal) must find ways to accelerate investment in transmission, if customers are to receive the many benefits achievable with competitive wholesale markets. Underdevelopment of the transmission grid impedes the achievement of the benefits of competitive markets. Significant transmission constraints limit access to competing electric resources. Since generation units cannot always be built close to load, competition in generation relies on the existence of sufficient transmission infrastructure to support such competition. This needed level of transmission infrastructure is missing in many areas of the nation."

Wood noted that the Commission is working within its current statutory authority to encourage infrastructure investment, for example granting rate incentives to utilities that engage in beneficial transmission expansion. However, Wood urged Congress to focus on three issues in the pending energy legislation: 1) create a mechanism for mandatory, enforceable reliability standards; 2) provide federal backstop authority for electric transmission siting; and 3) repeal PUHCA.

The full text of Chairman Wood's Testimony is available on the NEM Website.

Click here to view all past updates.
Order on Capacity Assignment

The Department issued an Order in its inquiry as to whether to modify the existing mandatory method for capacity assignment. The Department concluded that the upstream capacity market for Massachusetts is not yet workably competitive enough to change the mandatory, slice of system capacity assignment policy. Accordingly, the utilities are directed to continue to procure upstream pipeline capacity for firm customers.

In order to address impediments to the transition to a competitive gas marketplace, the utilities were ordered to improve performance or implement procedures on: 1) monthly recall and release of assigned capacity; 2) access to and modification of consumption algorithms; and 3) monthly true-ups of differences between forecast usage and billed usage. The utilities and marketers were directed to work together to resolve issues associated with synchronization of nomination schedules and procedures and report back to the Department in six months. The Department declined to reduce the imbalance penalty level.

The full text of Order is available on the NEM Website.

New York
Click here to view all past updates.
Commission Approves Central Hudson Retail Access Plan

The Commission approved Central Hudson's retail access plan. Of particular significance the Commission approved Central Hudson's implementation of its Energy Choice program modeled after O&R's PowerSwitch program. Citing 31% residental electric customer and 37% residential gas customer migration in O&R with only an approximate 1% of customer returns to utility service after participation in the program, the Commissison found, "the 'Power Switch' type of ESCO savings program has demonstrated its worth." In response to NYSEG/RG&E's criticism, the Commission said, "the 'Power Switch' type of program is intended as a transitional mechanism to assist and encourage willing customers in exploring the benefits of the competitive marketplace, and Central Hudson's proposed program should reasonably perform that function. NYSEG/RG&E's proposal to require that yet more benefits be demonstrated before an additional company can implement such a program is unjustified."

With respect to other retail access issues in the Central Hudson territory the Commission found that: 1) the utility should continue to monitor customer aggregation and migration proposals of other utilities for discussion in its on-going collaborative; 2) the utility should report on ESCO balancing and cash out issues; and 3) the utility should file a new unbundled embedded cost of service study either by January 1, 2006, for the twelve months ending December 2004, or with its next rate plan filing using the same test period as the rate filing, whichever is earlier, with the purpose of establishing revised retail access credits.

The full text of the Order is available on the NEM Website.

ConEd Meeting on Green Power Marketing

A ConEd collaborative on green power issues will be initiated on June 22, 2005, at 10AM in the NYPSC's New York City office in the 4th floor board room. The meeting will provide an opportunity for green power providers to make presentations, to discuss how ConEd and ESCOs can support green power purchases including referral of customers to ESCOs that provide green power, and how to disseminate information to customers about green power. Those wishing to attend should contact by June 20, 2005.

Central Hudson to Install Real-Time Metering for Large Gas Customers

The Commission reviewed Central Hudson's request to delay implementation of real-time metering for its large gas customers. The Commission found that real-time metering and daily balancing are "important features of a competitve market for gas supply," and accordingly further delay in implementation could adversely affect system reliability and growth of the competitive market. Central Hudson was ordered to file a plan for installing real-time metering for its large gas customers by August 8, 2005. The Commission also seeks comment on proposed balancing and cashout procedures for daily metered customers by August 8, 2005. The full text of the Order is available on the NEM Website.

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