March 16, 2001


 White House to Brief NEM Members at April 3 Annual Membership Meeting and Restructuring Conference

A final head count is needed ASAP for NEM's Annual Membership Meeting and National Restructuring Conference on April 3-4, 2001, in Washington, D.C. Leaders from Congress, NARUC, academia and the industry have also confirmed. A hotlink to the event is provided here for your convenience. NEM, Keyspan, Lodestar PowerTrust, and AES New Energy are hosting a VIP Reception in the U.S. Capitol Building the evening of April 3rd. Please use this hot link to register for the reception. NEM members that wish to distribute logo items at the conference should contact headquarters. The rooms reserved at Marriott Metro Center have been sold-out. Please call headquarters if you need assistance with a room.

 Cedar Elected to Executive Committee

NEM is very pleased to announce that Cedar has been elected to NEM's Executive Committee. NEM is looking forward to Cedar's leadership on cutting-edge technology issue identification and policy development. Cedar is an enterprise solutions provider with 45 offices around the world and is already heavily involved in the energy marketplace. It offers a unique Knowledge Management solution, Content Value Management (CVM) developed initially by the former British Gas Technologies (BGT) for use via its intranet in markets across the world. CVM takes a company's unstructured data and makes sense of it - turning information into useable business knowledge, gathering business intelligence from both in-house and public sources. Mike Harrison, Managing Director, Rachel Meade, Vice President, Market Making, Andrew Burns, Vice President, Market Making, Martin Vasey, Knowledge Solutions Manager, and Nichola Ibe, Program Manager will represent Cedar within NEM.

 Conference Call on Comments to FTC on Retail Electricity Competition Plans

Pursuant to testimony filed by NEM, Congressman Tauzin and Congressman Barton have requested that FTC examine the different states' retail electric competition programs and identify which features yielded consumer benefits and which did not. The Congressmen also asked FTC to examine possible jurisdictional limitations on the states' authority to design successful retail competition plans. Comments are sought on retail supply issues, retail pricing issues, market structure issues, and other miscellaneous issues. NEM will hold a conference call on March 22, 2001, at 11AM EST to discuss the comments. The dial-in number is 303-248-1820 and the passcode is 428358. Comments are due to FTC by April 3, 2001. FTC will update its report of last year on Competition and Consumer Protection Perspectives on Electric Power Regulatory Reform as a result of this process. The full text of the Notice Requesting Comments on Retail Electricity Competition Plans and the Report on Competition and Consumer Protection Perspectives on Electric Power Regulatory Reform are available on the NEM Website.

Federal Issues

 NEM Discussions with Congressman Barton's Office

At a meeting with Congressman Barton's staff this week, NEM was advised that after the Bush energy policy team announces its plan in April, the Congressman will focus on energy supply issues in May and then specific energy issues during the summer.

 EIA Electric Power Surveys

EIA is seeking comments on electric power surveys revised to reflect competitive markets. The proposed revised surveys are available on the NEM Website as follows:

EIA-411-Coordinated Bulk Power Supply Program Report voluntarily collects data compiled from utilities and other electricity suppliers by North American Electric Regional Councils.

EIA 412-Annual Electric Industry Financial Report is to be completed by each municipality, Federal entity or other unregulated company engaged in the generation, transmission, or distribution of electricity (including generation and transmission cooperatives), which has 150,000 megawatthours of sales to ultimate consumers or 150,000 megawatthours of sales for resale for the 2 previous years.

EIA-423-Cost and Quality of Fuels for Electric Plants is to be completed by selected electric generators to report electric energy information on a monthly basis. The owner or operator of each unregulated electric generating facility and the owners of regulated gas turbine generating plants must submit the Form EIA-423 survey, if the plants' total fossil-fueled nameplate generating capacity is 50 or more megawatts;

EIA-826-Monthly Electric Sales and Revenue Report with State Distributions is to be completed by selected electric utilities, electric service providers and distribution companies that sell or distribute electric power to end users to report electric energy information on a monthly basis;

EIA-860-Annual Electric Generator Report is to be completed by all electric generating plants which have or will have a nameplate rating of 1 megawatt (1000 kW) or more and are operating or planned within 5 years of the year of the form;

EIA-861-Annual Electric Power Industry Report is used to collect retail sales of electricity and associated revenue from all electric utilities, electric service providers and distribution companies on an annual basis;

EIA-906-Power Plant Report is to be completed by selected electric generating plants to report electric energy information on a monthly basis.

Comments on the revised surveys are due May 14, 2001. The Notice of the Proposed Surveys is available on the NEM Website.


 Order on Increased Electric Generation and Natural Gas Supplies in the Western U.S.

The Commission issued an order instituting measures to help increase electric generation supply and delivery in the Western states including: 1) requiring CAISO and transmission owners within the WSCC to file short term grid enhancements; 2) extending temporary waivers of operating and efficiency standards and fuel use requirements for qualifying facilities; 3) authorizing market-based rates for wholesale power sales from generation used primarily for back-up and self generation located at businesses within the WSCC; and 4) authorizing wholesale customers and retail customers, as permitted under state rules, to resell load reduction at wholesale at market-based rates.

The Commission is also seeking comments on premiums on equity returns, and 10-year depreciation, for projects that increase transmission capacity in the short term; premiums on equity returns, and 15-year depreciation, for transmission upgrades involving new rights of way that can be in service by November 1, 2002; premiums on equity returns for new interconnection facilities required for new entrants that can be in service by November 1, 2002; allowed revenue recovery for non-capital intensive expenditures made to increase transmission capacity on constrained interfaces; allowed rolling in of interconnection and upgrade costs associated with new supply, rather than directly assigning such costs to the generator; and the use of the interconnection authority contained in section 210(d) of the Federal Power Act to help alleviate impediments to electric supply reaching load. Comments are due March 30, 2001. The full text of the Order is available on the NEM Website.

 California Refund Order

Pursuant to its December Order on California wholesale rates, the Commission ordered certain public utility sellers with transactions made above a Commission-developed proxy market clearing price of $273/MWh in January 2001 while a Stage 3 Emergency was in effect to file notification with the Commission on or before March 23, 2001, that they will either: (1) refund the amounts in excess of the proxy market clearing price or offset such amounts against any amounts due and owed in the ISO and the PX markets for the month of January 2001; or (2) supply further cost or other justification for prices charged above the proxy market clearing price for the month of January 2001. The Commission will determine a proxy market clearing price for each month through April 2001. The full text of the Order is available on the NEM Website.

State Issues

New York

 NEM Statement on ConEd Phase 4 Proposed Settlement

NEM has filed a Statement on the proposed settlement in ConEd Phase 4 maintaining that the Commission should increase the proposed back-out credit to more fully reflect identified long run avoided costs to permit meaningful price competition and offset potential price increases forecasted for the summer. NEM urged that the Commission should institute a fully consolidated proceeding to perform a full "bottoms up" analysis of ConEd's natural monopoly functions and thereby determine the amount of funds that consumers should receive to shop for energy and related products, services, information and technology. The full text of NEM's Statement is available on the NEM Website.

 NEM Responds to NYSEG's Proposed Price Protection Plan

NEM has filed a letter responding to NYSEG's proposed Price Protection Plan urging the Commission to reject the Proposal and institute a "bottoms up" unbundling of NYSEG's system. NYSEG proposes to institute a seven-year rate freeze plan in which it would retain POLR responsibility. The plan also seeks to impose rules concerning customer switching and back-out credits. The full text of NEM's Letter is available on the NEM Website. The full text of NYSEG's Price Protection Plan is available from NEM headquarters.

 Order on Farm and Food Processor Pilot Program

The Commission has declined to extend the expiration of the Farm and Food Processor program from March 31, 2001, to October 31, 2001. The Commission ordered that the utilities shall provide an interim back-out credit adder (reduced from the current pilot adder of 1 cent/kWh) in the amount of 0.7 cents/kWh through the pilot customers first meter reading dates after October 31, 2001. The credit shall then be reduced to 0.4 cents/kWh unless and until higher credits are available generally to other farm customers. The Commission also ordered that current pilot customers shall be entitled to one free switch of ESCOs through the remainder of 2001. Utilities are directed to assume that pilot customers will return to utility service at the end of the Pilot Program unless timely notices are submitted by ESCOs. The full text of the Order is available on the NEM Website.

 Standby Rates Proceeding

A Staff straw proposal for standby rates and delivery service rate design guidelines is expected to be distributed to parties on March 28, 2001. Pending the distribution of the straw proposal, a plenary session of the standby rate collaborative will be held April 9, 2001, to discuss revisions and recommendations. Initial comments and reply comments on the revised straw proposal will be due May 1, 2001, and May 15, 2001, respectively.


 Order on Interim Guidelines for Electric Generation Supplier (EGS) Notification of Service Changes

The Commission issued an Order adopting interim guidelines for EGS notification to customers of impending contractual changes pending the institution of a formal rulemaking on the subject. The Order provides that customers shall be provided two notices of a proposed adverse change in terms of service and one notice when the change is a reduction in price to be charged the customer. An Initial notice of a change in terms must be given 52 to 90 days prior to the effective date and a subsequent Options notice must be given at least 45 days prior to the effective date of a change in terms. These notice requirements are also applicable to EGS notification to customers being dropped (for reasons other than nonpayment or wholesale abandonment). The Options Notice must state: information about any new pricing or renewal pricing; the EDC's or POLR's price to compare; any rules applicable to return to POLR service, such as a mandatory twelve-month stay rule; instructions on selecting an alternative supplier; a date certain for action if the customer elects a new alternative provider or elects the changes in the terms; and telephone numbers and internet addresses for the OCA and Commission. The full text of the Order is available on the NEM Website.


 Comments Sought on Virginia Proposed Retail Access Rules and Staff Report

Virginia Commission Staff prepared a Report on proposed retail access rules. The proposed rules concern codes of conduct, licensing, competitive service provider registration with the local distribution company, customer information, marketing, enrollment and switching, billing and payment, load profiling, and dispute resolution. NEM will file comments if interested members submit their written comments to headquarters by March 26, 2001. Comments are due to the Commission on April 6, 2001. The full text of Staff's Report, Appendix A (Proposed Rules Governing Retail Access to Competitive Energy Services) and Appendix B (Interim Rules Governing Electric and Natural Gas Retail Access Pilot Program) are available on the NEM Website.

 Virginia Power Functional Separation Plan

Virginia Power has filed an application for approval of a functional separation plan. The filing proposes the transfer of generating assets and operations to a new company, Dominion Generation. Virginia Power will retain the transmission and distribution assets and will be responsible for performance of distribution, metering, transmission, billing and customer service operations directly or through an affiliate arrangement. The full text of the application, including cost of service studies, unbundled rates and terms and conditions is available from NEM headquarters.

District of Columbia

 Gas Working Group

NEM has joined a Commission working group to address third-party gas supplier licensing and certification, consumer education and customer protection standards, and incentives to increase third party supplier participation. The next working group meeting will be held March 20, 2001. NEM members interested in participating should contact headquarters. The full text of the Order is available on the NEM Website.