March 9, 2001


 White House to Brief NEM Members on Administration Energy Strategy at its April 3 Annual Membership Meeting and Restructuring Conference

The Director of the Vice President's Energy Policy Development Group will hold a "closed-door" meeting with NEM members at its 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. Members and guests who wish to attend must provide their name, social security number and birth date to headquarters ASAP for security reasons. Please use this hot link to register for the reception. NEM members that wish to distribute logo items at the conference should contact headquarters. Please note that hotel rooms may be limited.

 Washington Post Column on California Energy Crisis

The Washington Post opinion columnist David Broder wrote a piece on the California energy crisis entitled, "Power and Politics." detailing the political backlash against deregulation in the state. The full text of the Broder Column is available on the NEM Website.

Federal Issues

 FTC Seeks Comments 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 specific aspects of the states' retail competition programs including:

  1. Retail Supply Issues: a) difficulties suppliers encounter in entering marketers, conditions and incentives that attract suppliers to retail markets, and what causes suppliers to exit the market after beginning to provide service; b) customer acquisition costs and operational costs to service retail customers and the comparison of these costs to profit margins for electric power generation services; c) customer switching incentives and penalties; d) new products and services offered by suppliers; and e) benefits and drawbacks to the different approaches to the supplier of last resort function for customers that do not switch.
  2. Retail Pricing Issues: a) effect on market entry of the price for provider of last service or default service; b) rationale and effect of state-mandated retail rate reductions on retail competition; and c) effect of seasonal price fluctuations in the price of wholesale generation on market entry.
  3. Market Structure Issues: a) effect of RTO development on retail competition; b) requirements for divestiture of generation assets; c) how and by whom should retail sales of bundled transmission services and retail sales of unbundled transmission be regulated; d) are the states capable of remedying transmission constraints or is federal jurisdiction necessary; and e) effect of state siting regulations for new generation and transmission facilities on retail competition and whether federal jurisdiction is needed for siting of generation facilities.
  4. Other Issues: a) retail competition issues that require cooperation and coordination with other states; b) prevalence of use of distributed resources and barriers to implementation; c) specific jurisdictional issues that prevent state retail competition programs from being successful; d) technological developments likely to effect retail or wholesale competition that may alter the structure of retail competition plans; and e) lessons to be learned from other formerly-regulated industries that allow customer choice.

Comments are due 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.

 EIA Proposed Monthly Natural Gas Marketer Survey

EIA is seeking OMB approval of Form EIA-910, Monthly Natural Gas Marketer Survey. The form is intended to collect information to develop estimates of state level prices paid by commercial and residential consumers of natural gas and for modeling and analytical efforts. Initial respondents will be all natural gas marketers in selling to residential and/or commercial customers in Georgia, Maryland, New York, Ohio and Pennsylvania. Comments are due April 9, 2001. The full text of the Notice of the Proposed Survey is available on the NEM Website.


 Staff Conference on Natural Gas Markets Affiliate Issues

NEM will participate in the Staff conference on affiliate issues in competitive natural gas markets to be held on March 15, 2001, at 1PM. Additional comments on issues raised at the conference are due April 30, 2001. The full text of the Notice Organizing Staff Conference is available on the NEM Website.

 NEPOOL Proposed Market Rules for 3 Part Bidding and Net Commitment Period Compensation

NEPOOL Participants have filed proposed market rules for 3-part bidding and net commitment period compensation. NEPOOL requests the market rules become effective July 1, 2001. The full text of the NEPOOL Filing is available on the NEM Website.

 NYISO Report After Fifteen Months in Operation

Pursuant to the Commission's Order, NYISO has filed a, "Report After Fifteen Months in Operation," providing an analysis of ancillary services markets, options for dealing with storm watch conditions, use of external suppliers of ancillary services, the reconfiguration auction and a process to allow parties to request a reconfiguration of existing Transmission Congestion Contracts, and the auction mechanism and proposed changes. The full text of the NYISO Report and the following attachments, New York Market Advisor Annual Report on The New York Electric Markets for Calendar Year 2000: Ancillary Services Section, Inter-ISO Coordination of Regulation and Reserve, and Emergency Reserve Operating Procedure, are available on the NEM Website.

State Issues

New York

 NYSEG Price Protection Plan

NYSEG will submit a Price Protection Plan to the Commission on March 14, 2001, and has requested a proceeding be instituted to review the plan. NYSEG's Price Protection Plan would: provide for extension of its settlement for seven years after the date the plan is approved; freeze electric prices for seven years; offer a market-based back-out credit for supply with a credit based on avoided costs for customers that participate in the competitive market; create a deferred revenue account to allow NYSEG to absorb increased service costs due to government-mandated programs and other uncontrollable costs; allow for current rates to absorb NUG contract and market power costs; and require NYSEG to operate under performance-based ratemaking principles.

 ConEd Price Mitigation and Excess Earnings Proposals

Comments are due on the price mitigation proposals submitted by Staff, ConEd, AARP, NYC, and the Public Interest Coalition and ConEd's excess earnings proposal by March 13, 2001. Due to confidentiality concerns, members interested in reviewing the proposals should contact headquarters.

 Resolution on Electric Metering Regulations

The Commission issued a resolution adopting modifications to regulations to allow for the approval of new types of electricity meters, instrument transformers and auxiliary devices and to allow any energy services company, competitive meter service provider, or any nonresidential customer that qualifies for the host utility's mandatory time of use rates, to apply for the approval of a type of meter intended for use in the state. The full text of the Resolution is available on the NEM Website.

 POLR Proceeding Prehearing Conference

The prehearing conference in the POLR proceeding has been rescheduled for March 14, 2001, at 1 PM at the Commission's Albany offices.


 FirstEnergy-GPU Rebuttal Testimony

FirstEnergy-GPU filed rebuttal testimony on the POLR issues defending the proposed deferred tracking mechanism and generation rate cap increase. They suggest in the testimony that to encourage retail competition, average retail rates calculated in the proceeding should be increased, specifically, MetEd and Penelec's average retail generation credit and the retail shopping credit. The full text of the Rebuttal Testimony is available on the NEM Website as follows: Witness 1, Witness 2, Witness 3 and Exhibit.


 House Bill 9 on Gas Marketer Certification

NEM will host a conference call on March 13, 2001, at 11 AM to formulate an approach of how best to use NEM resources to address House Bill 9 on gas marketer certification. The bill was passed by the House on February 27, 2001, and has been introduced in the Senate. The bill would impose requirements pertaining to certification of managerial, technical and financial capability to provide service, contract disclosures, and bill content, and customer complaint procedures and penalties. The call-in number is 303-248-1820 and the passcode is 428358. The full text of HB 9 as passed by the House is available on the NEM Website.


 Proposed Retail Access Rules

The proposed retail access rules have been released concerning 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. Staff's report on the rules is due March 13, 2001. The full text of the Proposed Retail Access Rules is available on the NEM Website.