The Commission has approved mandatory hourly pricing for large utility customers. The Commission found, "it is in the public interest to implement accurate price signals which will reduce peak usage, in order to mitigate peak period prices, increase peak period reliability, encourage wholesale market power mitigation, and reduce New York State's dependence on natural gas-fueled generation. The steps we take in this Order will enable customers to benefit from shifting load to off-peak, less expensive time periods, and for all ratepayers to realize the benefits of reducing the electric system's peak period demand." The Commission estimated demand reductions during peak hours of approximately 750MW could be achieved from the 5300 MW of aggregate load subject to mandatory hourly pricing.

ConEd and O&R are to implement hourly pricing for their mandatory time of use customers as of May 1, 2006. National Grid will implement hourly pricing for its SC3 customers at 500kw and above as of September 1, 2006. NYSEG and RG&E must implement mandatory hourly pricing as of January 1, 2007, for their time of use customers at 1000kw or above. NYSEG and RG&E must file plans for converting the remainder of their mandatory time of use customers to hourly pricing.

Responding to stakeholder concerns about standardization of hourly pricing rate mechanisms, the Commission ordered each utility to include hourly pricing tariff language that explains its development of hourly day ahead retail prices. Utilities will recover incremental costs of interval meters from affected customers, and the implementation and outreach and education costs of the hourly pricing program will be recovered from all ratepayers through delivery rates. Retail access customers are to receive interval meters as well. The utilities are to assess the impact of hourly pricing on economic development customers. The full texts of the Hourly Pricing Order, ConEd's Tariff Filing and O&R's Tariff Filing are available on the NEM Website.

Commission Staff will convene a collaborative to discuss the development of an ESCO Referral Program for NYSEG. The meeting will be held May 16, 2006, at 10AM at the Commission's Albany offices on the 19th floor. Teleconferencing will also be available. The call-in number is 866-266-3697, and the passcode is 3592865#.

The Commission recently approved the terms of ESCO Referral Programs for ConEd, O&R and National Grid. The utilities programs are based on the Commission's "ESCO Contract Option" and provide consumers enrolling in the choice program with a seven percent introductory discount for two billing cycles. The full texts of the ConEd Order, O&R Order and National Grid Order are available on the NEM Website.

The Ohio Supreme Court issued a decision rejecting portions of the FirstEnergy Rate Stabilization Plan (RSP). The OCC and aggregation groups raised five issues associated with the Commission's approval of the RSP: (1) approval of the rate-stabilization plan without an option to purchase electric service at a price to be determined through a competitive-bidding process, (2) approval of the rate-stabilization charge, (3) approval of shopping credits, (4) grant of interest on shopping credits, and (5) approval of FirstEnergy's financial-separation plan. The Supreme Court upheld the Commission's Order on issues 2 through 5.

On issue 1 the Court found that, "PUCO exceeded its statutory authority by approving a rate stabilization plan that did not meet [statutory] requirements." The Court held that, "because the PUCO approved the implementation of a rate-stabilization plan in this instance for the purchase of retail electric service, the price of which had not been determined through a competitive-bidding process, and made a unilateral decision to eliminate the offer to customers of a price determined through competitive bids without developing a reasonable means for customer participation, its actions fell outside the parameters of R.C. 4928.14(B) and are, in that regard, unlawful." Accordingly, the Commission must reexamine its decision. The full text of the FirstEnergy RSP Order is available on the NEM Website.

The Commission is considering revisions to its gas choice rules. Significantly, Staff recommends deleting the provisions pertaining to when choice customers switching to and from GCR service pay GCR adjustments. Staff recommends the change to enhance customers ability to make comparisons between the GCR rate and marketers' rates. Initial comments are due May 12, 2006, and reply comments are due June 2, 2006. The full text of the Proposed Rules are available on the NEM Website.

Equitable and Dominion Peoples filed an application for approval of a merger. In examining the utilities' application, the Commission is required by the Natural Gas Choice and Competition Act to consider whether the proposed transaction “is likely to result in anticompetitive or discriminatory conduct, including the unlawful exercise of market power, which will prevent retail gas customers from obtaining the benefits of a properly functioning and effectively competitive retail natural gas market.” Both companies have choice program provisions in their tariffs. NEM has intervened in the proceeding to ensure that the merger does not impede or limit the opportunities for choice, but rather supports and advances consumers’ ability to exercise choice in the Equitable and Dominion Peoples service territories and that competitively neutral choice tariff provisions be applicable in both service territories. The companies’ propose to “blend” their purchased gas cost rates. NEM noted its concern as to whether and how the proposal will impact the transparency of price signals to consumers. Moreover, Equitable intends to utilize Dominion Peoples’ storage assets for the “blended” joint gas cost without the review and oversight of a base rate proceeding. The full text of the Equitable-Dominion Application and NEM's Intervention are available on the NEM Website. Those members interested in participating in this proceeding should contact headquarters.