On November 27, 2002, the electric distribution companies submitted the Massachusetts Electronic Business Transaction (MAEBT) Working Group Report on Internet Transmission Protocols. For security purposes, the report recommended Secure Socket Layers (SSL) or Pretty Good Privacy (PGP, version 7.1 or later). The preferred recommendation for data transport was HTTP/S. On the issue of standardization and inter-operability, the report recommended the implementation of the Electronic Data Interchange-Internet Integration Applicability Statement 2 (EDIINT AS2). The report did not recommend the North American Energy Service Board/Electronic Delivery Mechanism (NAESB/EDM) solution because it is a much more limited solution. Additionally, there is only one vendor supporting NAESB/EDM, unlike the EDIINT AS2 solution, which is offered by several vendors.

Certain marketers voted against the final recommendation because marketers have already invested considerable resources to develop NAESB/GISB standards. They argued that having to support the new UCCnet standard of the EDIINT AS2 will increase their operating costs.

The full text of the Report is available on the NEM Website.

In conjunction with Consumers gas rate proceeding, the Commission has addressed NEM's recommendation of embedded cost-based unbundling of competitive services. The Commission declined to require further unbundling of services such as metering, billing, balancing, storage, backup, peaking, and turn-on and turn-off services at this time. The Commission argued that, "it makes little sense to establish a rate for a service before the details of the service are known. To do so is to inform potential alternative suppliers of contested services of the price to beat before they design the services to be offered to customers." The full text of the Order is available on the NEM Website.

The Commission issued an Order approving Consumers application to unbundle its residential electric rates. By the terms of Consumers' proposal, it will include the percentages represented by the unbundled components on residential customer bills, rather than the detailed unbundled charges. The Commission found that Consumers' proposal was consistent with the terms of the state restructuring law. The full text of the Order is available on the NEM Website.

HB 6522 has been introduced and referred to the Committee on Energy and Technology. The bill would eliminate the provision in the electric restructuring law providing for true-ups of over- or under-collections of net stranded costs. The full text of HB 6522 is available on the NEM Website.

JCP&L has filed a RFP for a Basic Generation Service (BGS) Green Energy Program. JCP&L is seeking bids to provide green power for ten 20MW tranches of residential BGS customers from August 1, 2003, to May 31, 2004. The price paid to the winning bidders will be determined in the statewide BGS auction. The full text of JCP&L's BGS Green Energy Program RFP is available on the NEM Website.

The Board adopted a process for dealing with electric distribution utility (EDC) default or credit impairment as it affects the BGS suppliers. If an EDC is a prospect for a potential downgrading to a rating below investment grade, the EDC will have 3 days to file with the Board a plan to mitigate or remove the threat of such downgrade. The EDC filing must contain an assessment of the EDC's present and future sources of liquidity necessary to assure continued payments for the BGS supply for its customers. The affected suppliers may also file their position with the Board. The Board will issue an Order, which will include assurances to the suppliers of BGS to the effected EDC that their payments will continue in a timely manner. The adopted process will be included in the BGS Supplier Master Agreement. The Board approved final versions of the BGS-FP and BGS-HEP Supplier Master Agreements, with the new creditworthiness procedure. The documents are available at: www.bgs-auction.com/bgs.bidinfo.cc.asp.

Additionally, the Board accepted the EDCs' proposed form of financial guarantee from the BGS bidders or any such guarantees approved through the revised policy on alternative forms of guarantee announced by the EDCs on November 7, 2002.

The full text of the Decision and Order is available on the NEM website.

NEM submitted Initial Briefs in the ConEd and NYSEG unbundling proceedings. NEM argued that the Commission should reject ConEd and NYSEG's studies and proposed unbundled rates since they did not comply with Commission Orders requiring the filing of an embedded cost study. Rather, they filed what amounted to an avoided cost study. The Commission has ordered that electric customer choice be provided for the following services: supply, meter ownership, meter service, meter data service and billing. NEM urged that ConEd and NYSEG must be required to fully unbundle the embedded costs associated with those functions, including an appropriate allocation of indirect costs and overhead in proportion to the revenue requirements not associated with delivery services.

NEM also argued that the energy companies' proposed stranded cost recovery mechanisms do not conform with Commission directives requiring a two-tier recovery mechanism, whereby competitive service costs are not applied to migrating customers. The utilities must be required to implement a transition surcharge in conformance with the Commission Orders that allows customers that migrate to avoid embedded costs of contestable services.

In its Panel Testimony, Staff proposed consideration of two methods for functionalizing retailing costs, a utility retailer model (URM) and a generalized allocation method (GAM). NEM recommended that the Commission reject Staff's URM as it produces artificially low costs associated with contestable services, as admitted by Staff. NEM urged that Staff's GAM also yields artificially low rates. Additionally, NEM urged rejection of ConEd's minimum delivery bill proposal.

The full text of NEM's Initial Briefs in the ConEd and NYSEG unbundling proceedings are available on the NEM Website.