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April 12, 2002
KWI Elected to NEM Executive Committee

NEM is pleased to announce that KWI has been elected to the Executive Committee. KWI, a global company specializing in risk management and trading software for energy companies, helps clients execute forward market trading, portfolio management and risk management. KWI's primary product is kW3000(tm), a suite of integrated applications designed to manage risk and trading in the rapidly changing electricity and multi-commodity energy markets. KWI will be represented within NEM by Thomas (Trip) M. Ray III, President and General Manager, North America, Gordon Allott, Vice President Business Development, North America, David Bucknall, Chief Executive Officer, and Greg Keers, Chief Strategy Officer.

NEM Risk Valuation, Management and Financial Accountability Taskforce Meeting

NEM's Risk Valuation, Management and Financial Accountability Taskforce meeting at the Georgetown Club, 1530 Wisconsin Ave. in Washington, DC will be held on April 19, 2002, beginning at 11AM and lasting no later than 5:30PM. The purpose of the meeting is to forge consensus on accounting and disclosure standards to promote the proper valuation of energy assets, equity securities and forward energy contracts, including derivatives. The full text of the Meeting Agenda is available on the NEM Website.

We currently have eighteen people confirmed to attend representing brokerage firms, accounting firms, power traders, generation owners, risk management firms, electronic trading platforms and financial services firms. We only have room for 20 and need a firm headcount to order food and decide whether we need a larger room at the Georgetown Club. Please RSVP as soon as possible. Call (202) 333-3288 or email

NEM Annual Membership Meeting and National Restructuring Conference

Senators, FERC, PUC and FTC Commissioners have confirmed for NEM's Annual Membership Meeting and National Restructuring Conference to be held June 20 and 21, 2002, at the Marriott Metro Center in Washington, DC. An updated agenda, registration form and electronic brochure is hotlinked here for your convenience. Please note that the registration fee for the conference increases as of April 14, 2002. Also there are only a limited number of rooms at our discounted rate of $139/night.

NEM-EEI Master Margin and Netting Agreement Drafting Efforts

NEM and EEI started collaboration on the drafting of a Master Margin and Netting Agreement. Many thanks to Chris Bernard and Marty Jo Rogers from Entergy-Koch, Dede Russo from Reliant, and Vince Duane from Mirant for their help in coordinating this effort.

At a meeting yesterday, the issues associated with netting agreements were discussed. Attorneys from Bracewell and Patterson gave a detailed discourse in the law of setoff as well as the Bankruptcy Code. The recommendations they discussed for the structure of a master netting agreement included cross-collateralization with counterparties receivables, joint and several liability for the counterparties, cross default and comprehensive termination and liquidation provisions, and exclusion of nonqualifed contracts or segmenting qualified contracts from non-qualified contracts. The full text of this presentation will be posted on the NEM Website when made available electronically.

Please note that the full Drafting Committee will meet on April 25, 2002, from 9AM to 4PM in Houston at the offices of Entergy-Koch located at 20 East Greenway Plaza, First Floor Meeting Facilities, Houston, TX. Those interested in helping to draft a standardized netting agreement should register by e-mailing name, title, company, phone, fax and email numbers to General questions should be directed to Esmeralda at (713)544-4795. The full texts of the Drafting Committee Meeting Details, Registration Form, Draft Master Netting Agreement, Draft Cover Sheet, and Draft Collateral Annex are hotlinked here and available on the NEM Website.

NEM and Cedar Offer Free Webinar on New Visualization Technology

NEM invites its members to a free "webinar" hosted by Cedar Enterprise Solutions to overview an exciting technology that Cedar has deployed on NEM's archives of regulatory pleading and policy statements. Session 1 will be held April 25, 2002, at 11AM EST, and Session 2 will be held April 26, 2002, at 10AM EST.

This technology can be especially helpful in: compliance & regulatory management, technology and research development, new business development & competitor intelligence, business strategy and CRM analytics, security of assets, staff, environment and public, and collaborative knowledge sharing and on line learning.

Please respond with your preferred time to NEM headquarters or Patrick Hogan, Vice President, Cedar Content Value Management, at or (847)607-0310. All participants will also receive a White Paper on Energy and Utility Infrastructure Management using knowledge visualization applications.

FERC Releases Options Paper on Electric Market Design and Structure

FERC issued an options paper for "Resolving Rate and Transition Issues for Standardized Transmission Service and Wholesale Electric Market Design." The paper sets forth options related to the manner in which embedded costs of the transmission system will be recovered, the manner in which transmission rights will be allocated, the transition of customers under existing contracts to new service, and long-term generation adequacy. Parties are requested to file recommendations on which of the options should be included in the Giga-NOPR and the advantages and disadvantages of the options. An NEM summary on the document is available from headquarters. Comments are due May 1, 2002. The full text of the Options Paper is available on the NEM Website.

A Conference Call to Discuss NEM's position will be held on April 17, 2002, at 2PM Eastern Time. The phone-in number is 703-788-0600, and the Passcode is 209353.

NOPR on Assignment of Firm Capacity on Upstream Interstate Pipelines

FERC issued a NOPR proposing to remove the requirement that pipelines assign their upstream capacity to their firm shippers. FERC reasoned that since the unbundling of interstate gas sales from transportation has been completed for the most part, and since FERC has allowed unbundled open access pipelines to acquire capacity on other pipelines, the requirement is no longer necessary. Comments on the NOPR are due 45 days after publication in the Federal Register. The full text of the NOPR is available on the NEM Website.

Rulemaking on Residential Customer Deposits and Termination of Service

The Commission has instituted a rulemaking to consider modification of the regulations on residential customer deposits and termination of service. A Hearing Examiner is to convene discussion sessions in order to submit a report by May 15, 2002, with recommended changes to the regulations. The first discussion session will be held April 30, 2002, at 9:30AM in the Commission's 16th floor hearing room. Initial comments on the Hearing Examiner's Report are due June 4, 2002, and reply comments are due June 14, 2002. NEM has intervened and members interested in this proceeding are encouraged to contact headquarters. The full text of the Notice of Rulemaking Proceeding is available on the NEM Website.

NEM Conference Call with Staff on Detroit Edison

NEM convened a meeting with members to discuss issues with the DTE unbundling. Thereafter, NEM and several members had a conference call with PSC Staff. NEM proposed that: 1) the interval metering requirement be relaxed to allow customers to choose profiling instead; 2) it is reasonable to allow Detroit Edison to do manual reads pending the installation of a phone line and change of meter in order to lessen the time to enroll customers; 3) utilities should use web-based systems for access to customer usage and payment history information; 4) when utilities render consolidated bills they should purchase suppliers' receivables up front; and 5) meters should be open architecture.

NEM also expressed its concern with the unbundling application filed by Detroit Edison including the utility's unwillingness to implement unbundled rates as well as Detroit Edison's proposal to lower generation rates to accommodate its proposed increase in transmission rates.

New Jersey
Basic Generation Service Working Group Meeting

The next BGS Working Group meeting is scheduled for May 3, 2002, in the Hearing Room at the Board's Newark office. The BGS Structure Working Group will meet in the morning beginning at 9AM. The BGS Pricing Working Group will meet in the afternoon beginning at 1PM. An agenda will be available next week.

New York
Expert Hired to Help Marketers in NY Unbundling Proceeding

NEM is contracting for an expert to assist with analysis of the embedded cost of service studies. NEM has requested that members not be charged again for these fees if they are using outside law firms in New York.

It should be noted that the Commission directed that draft tariffs including a revenue recovery mechanism are to be filed by ConEd and NYSEG by May 15, 2002. The ALJ will set the date for the other utilities filings and develop a procedural schedule to allow for a policy level and utility level review of the embedded cost studies and tariffs so that unbundled rates can be implemented for ConEd and NYSEG by September 30, 2002, and for the other utilities by the end of 2002. The full text of the Order is available on the NEM Website.

Commission Order on Natural Gas Supplier Rules

The Commission issued an Order on rehearing with respect to the natural gas supplier rules. The Order provides that: 1) suppliers are not required to provide promotional and advertising materials to utilities and the Office of Consumers Counsel; 2) when a supplier has provided a customer with a separate copy of the terms and conditions of the contract for the customer's records, the supplier is not required to immediately provide the customer with a legible copy of the signed contract; 3) if a customer is slammed and the original supplier cannot take the customer back at the original contract price, the customer can enter into a new contract with the original supplier, enter into a new contract with a new supplier or return to utility sales service; 4) for contract renewals of six months or longer in which there is are no material changes to the contract, suppliers must send customers one advance notice to allow customers to decide if the renewal should take effect but affirmative consent is not required; 5) for contract renewals of six months or longer in which there is a material change and there is an early termination or cancellation option for customers with a fee of $25 or less, suppliers must send customers two advance notices but affirmative consent is not required; 6) for contract renewals of six or months or longer in which there is a material change, there is an early termination or cancellation option with a fee of greater than $25, or there is no early termination or cancellation option, the customer's affirmative consent is required for the contract renewal to take effect; and 7) the operational support workgroup should address whether price to compare information should be included in customer bills.
The first meeting of the operational support workgroup will be held April 30, 2002, at 10AM, in Room 1252 of the Commission's offices. The full text of the Order is available on the NEM Website.

Aggregation Working Group Meetings

The first meeting of the aggregation working group will be held May 1, 2002, at 9AM, in the Commission's third floor training room. The workgroup is to discuss different models of aggregation, review the restructuring law and Commission rules pertaining to aggregation, and discuss necessary rule changes. The second meeting will be held May 7, 2002, and a third meeting will be held May 15, 2002, if necessary. The full texts of the Meeting Agenda, Relevant Code and Rule Sections, and List of Aggregation Scenarios are available on the NEM Website.

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