Staff will convene the first meeting of the Phase II process to implement the Phase I wholesale bidding model settlement for standard offer service (SOS). A two-part meeting will be held December 17, 2002, at 11AM in the Commission's 16th floor hearing room. The first part of the meeting will be a general information session on procurement details. Discussions will include PJM's perspectives on serving SOS type services. The second part of the meeting will be a discussion of a general work plan for Phase II including what gets worked on first (e.g. auction vs. traditional bid models), what items could be worked on simultaneously by different technical groups, and whether some parties should be given long-term assignments to have proposed documents (such as contracts or template RFPs) for discussion by February.

Another meeting of the Maryland gas roundtable was convened this week. Topics considered at the meeting included modifications to the current payment allocation order between utilities and suppliers, proposals for the utilities to purchase receivables when they render consolidated bills, and a recommendation to increase the cost-effectiveness of telephonic enrollment by permitting marketers the option of using third party verification instead of taping enrollment conversations. NEM will be preparing proposals on these topics for inclusion in the final report to be prepared by the gas roundtable. All proposals for inclusion in the report are due December 20, 2002. The next meeting of the gas roundtable will be held January 6, 2003, at 10AM at BGE's Spring Gardens facility.

ConEd has filed a proposed Phase 6 electric retail access program for the period from May 1, 2003, to April 30, 2004. The filing was required because the Commission has not yet approved unbundled rates for ConEd. ConEd proposes the use of supply back-out credits in the amount of $0.00025/kwh for residential customers and $0.00018/kwh for all other customers (as it proposed in the unbundling case). ConEd also argues that the lost revenue recovery mechanism it proposed in the unbundling case, whereby a single transition charge would be assessed to all customers, should be adopted. ConEd maintains that if it is not permitted to implement its proposed recovery mechanism that it should be permitted, "to implement supply back-out credits equal to the Company's avoided costs associated with its electric supply function (i.e. 0.08 mill/kwh for residential customers and 0.01 mill/kwh for all other retail choice customers)." ConEd will convene a meeting to discuss the proposal in January 2003. The full text of ConEd's Phase 6 Proposal is available on the NEM Website.

HB 9 subjected Competitive Retail Natural Gas Service (CRNGS) providers to assessments for the purpose of maintaining and administering PUCO and the Office of Consumers' Counsel. The assessment will be removed from base rates of natural gas companies by creating a surcredit rider applicable to those customers that do not purchase commodity sales service from their natural gas companies. Staff proposed a method for establishing the surcredit riders. The Commission believes Staff's proposal is desirable, however, it has requested comments on the Staff proposal by January 6, 2003. Additionally, natural gas companies with customer choice in their service areas must file by January 6, 2003, information needed to calculate the surcredit rider as proposed by Staff. The full text of the Order Requesting Comments is available from NEM headquarters. NEM members should forward their comments on the proposal to headquarters ASAP.

PUCO denied an application filed by FirstEnergy to reduce the company's shopping credit incentives that NEM was instrumental in obtaining. PUCO, noting that significant customer switching has only recently been achieved for a number of customer classes, determined that the competitive market has not developed to a point where FirstEnergy should deviate from the shopping credit incentive levels established in the transition plans. PUCO agreed with FirstEnergy that shopping credits should be monitored and adjusted to maintain a balance between encouraging shopping and limiting the regulatory transition charges (RTC) recovery period. Therefore, PUCO will require that FirstEnergy annually file its projection of how long the RTC would need to remain in effect in order to complete the recovery period. The full text of the Order is available from NEM headquarters.

Noting that customer meter ownership is the next logical step in the development of competitive metering services, SCC directed Staff and the competitive metering work group to propose rules regarding financial ownership of meters by large C&I customers. Staff must file proposed rules by March 4, 2003. SCC granted Old Dominion Power a delay in the implementation of competitive metering services for all customer classes until the later of January 1, 2003, or the implementation of retail choice in its Virginia service territory, on or before January 1, 2004. SCC held that it was too early to develop rules for additional elements of competitive metering, beyond ownership for large customers. SCC directed the metering work group to continue to study the possibility of the utilities establishing voluntary and/or expanded time-of-use (TOU) rate programs for residential and small commercial customers. SCC held that it was premature to make a recommendation regarding the implementation of competitive metering for small customers. Additionally, SCC believes that Staff and the work group should continue to address the issue of voluntary TOU and demand side management pilot programs. The full text of the Order is available on the NEM Website.