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May 20, 2005
NEM Summer Executive Committee Meeting

NEM is currently planning its Summer Executive Committee Meeting. We are tentatively exploring the possibiity of returning to the Marriott Metro Center in Washington, DC sometime during the week of June 20th. Member thoughts on the timing of the meeting would be appreciated and should be forwarded to headquarters ASAP.

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 discuss, debate and approve NEM Recommendations for Structuring Retail Auctions and Accelerated Migration Strategies.

Nominations for NEM's national policy leadership positions should be forwarded to headquarters no later than June xx, 2005.

NEM Litigation Control Group

Input from senior members is needed on a matter concerning NYSEG. NEM will be forming a litigation control group to conduct discussions on a confidential basis and to preserve attorney client privilege. Those interested in participating should contact headquarters immediately. A conference call of those members that have expressed interest will be held next week.

Staff White Paper on Long Term Transmission Rights

Staff issued a White Paper on the establishment of long term transmission rights in markets with locational pricing. The longest term financial transmission right currently offered in any RTO or ISO is one year. The Commission requests comments on the following issues associated with long term transmission rights: 1) whether long term transmission rights are needed and what problems are caused by the lack of them - do certain entities have a greater need for such rights? 2) what will be the impact of introducing long term transmission rights; 3) specific RTO/ISO plans for introducing long term transmission rights; and 4) the substantive and procedural options available to the Commission to address long term transmission rights. Comments are due June 27, 2005. The full text of the Staff White Paper, "Long Term Transmission Rights Assessment," is available on the NEM Website.

FERC Adopts Small Generator Interconnection Rules

FERC issued standard interconnection procedures for generators 20 megawatts or less. Utilities must amend their open access transmission tariffs to offer non-discriminatory, standardized interconnection service for small generators, including a Small Generator Interconnection Procedures (SGIP) document and a Small Generator Interconnection Agreement (SGIA). The SGIP sets forth technical procedures to follow in the course of connecting the generator with the utility's lines. The SGIA sets forth the contractual provisions for the interconnection. The full text of the Order is available on the NEM Website.

FERC Requests Comments on Rules Governing Interlocking Positions Held By Officers of Utilities, Suppliers and Financial Services Firms

FERC issued a proposed rulemaking to clarify and strictly enforce the section of the Federal Power Act prohibiting officers and directors from holding interlocking positions with public utilities, utility suppliers and certain financial services firms absent timely filing and approval by FERC. FERC has requested comments on various related issues, including whether it should waive the full informational filing requirements for public utilities and affiliates with market-based rates.

Comments are due by May 24.

Order on AGL Capacity Release Program

FERC affirmed that it has the authority under the Natural Gas Act to request that local distribution companies file a Statement of Operating Conditions listing their capacity release provisions. The Commission clarified that such a requirement is not intended for all shippers releasing capacity in conjunction with a state retail unbundling program, but rather is for LDCs that have developed extensive, highly detailed rules that govern how the LDCs release and recall interstate capacity on an ongoing basis, in conjunction with state retail unbundling programs. FERC also accepted AGL's proposed Statement of Operating Conditions subject to its explanation of several ambiguities. The full text of the Order is available on the NEM Website.

Click here to view all past updates.
California Proposes New Department of Energy

The California Governor has proposed to consolidate four energy agencies and create a Department of Energy. The Energy Commission would be consolidated with the Power Authority, the Electricity Oversight Board, and Water Resources. Siting authority over power lines and gas facilities would be shifted from the Public Utilities Commission to the new Department.

Commission Report on Broadband Deployment

The Commission issued a report for the Governor and state legislature entitled, "Broadband Deployment in California." The Report recommends that the state should "encourage deployment of BPL [Broadband over Power Lines] by its electric utilities by providing regulatory certainty in the areas of affiliate transaction rules, in the treatment of BPL program expenses and revenues, and exemption from Section 851 requirements for the use of utility assets." The Commission notes it will initiate a rulemaking to develop a BPL policy framework. The full text of the Report is available on the NEM Website.

Click here to view all past updates.
Allegheny Power Changes Tariff Rates to Reflect Wholesale Supply Auction

The Commission will consider Allegheny Power's request to change its tariff to reflect the wholesale supply contracts awarded. Based on the weighted average of all awarded supply prices, new standard offer service rates are proposed, to be effective June 1.

Maryland to Consider Adoption of Renewable Portfolio Regulations

The Commission will consider the proposed Renewable Portfolio Standards regulations for adoption. The Commission Staff has been working with a Renewable Portfolio Standards Working Group.

The regulations establish the framework for implementing the renewable energy porfolio standard program, which begins in 2006 and is mandatory for all suppliers and utilities. The program will be implemented between 2006 and 2018 with a 1-6% requirement for Tier I resournces and a 2.5% Tier 2 requirement. After 2018, the requirment is 7.5% for Tier I resources. Suppliers must pay a compliance fee for any shortfall. The regulations address the voluntary market for renewable energy credits, as well as the renewable energy portfolio compliance market required under the Renewable Portfolio Standard law.

New Jersey
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Order on 2006 BGS Auction Process

The Board issued an Order on the 2006 BGS auction process setting forth a preliminary schedule that would permit a decision on a final auction process in October 2005 and an auction and award of supply contracts in Feburary 2006. The Board directed the utilites and other interested parties to file proposals for modifications to the current BGS auction process by July 1, 2005. The Board also requested comment on the implications of providing a transitional rate design to larger C&I fixed price customers that would expose such customers, "to the hourly variations in energy costs without the uncertainties and volatility of hourly pricing." The full text of the BGS Order is available on the NEM Website.

Atlantic City Electric Announces Plans to Re-Auction its Generation Assets

Atlantic City Electric announced that it will re-auction its 555 MW generation assets in a competitive bidding process. Atlantic City's generation assets have been for sale for approximately 5 years and there have been 2 auctions. The bidding process will begin in mid-May 2005.

New York
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Commission Approves Central Hudson Retail Access Plan

The Commission approved Central Hudson's retail access plan. The Central Hudson plan is modeled after O&R's successful PowerSwitch program offering two months of discounted service, which has resulted in significant levels of residential customer migration. The Commission's approval of this element of the plan is important because of the increased scrutiny given to the O&R plan in recent months.

Central Hudson's plan also included: 1) purchase of accounts receivable at a discount without recourse; 2) hourly pricing for SC3 and SC13 customers; 3) website enhancements to include more information about choice; 4) a migration incentive; and 5) customer education. The full text of the Order Approving Central Hudson's Retail Access Plan will be posted on the NEM Website when made available electronically.

NYSEG and RG&E File Retail Access Plans

NYSEG and RG&E have filed their retail access plans maintaining that their current programs are "comprehensive retail access programs." NYSEG proposes to continue its Voice Your Choice program, "with new two-year commodity-offering programs beginning January 1, 2007." NYSEG also proposes to implement a purchase of receivables program for energy marketers. NYSEG requests approval of the plan by September 30, 2005.

RG&E's current Voice Your Choice program was approved by the Commission in 2004 and continues through December 31, 2008. RG&E implemented a purchase of receivable program effective January 1, 2005.

The full texts of NYSEG and RG&E's Retail Access Plans are available from NEM headquarters.

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