NEM is pleased to announce that Total Gas & Electric (TG&E) has been elected to NEM's Executive Committee. TG&E is an energy marketer selling natural gas and electricity to approximately 50,000 customers in the Northeast and Mid Atlantic. Bill Kinneary, Chairman and CEO, and Michael D'Angelo, General Counsel, will represent TG&E within NEM. Mr. Kinneary joined TG&E in April of 2001 as its Chairman and CEO. Mr. Kinneary previously worked in the Brooklyn Union/KeySpan organization for 28 years; 25 in the utility where, as General Manager of Rates, he developed Brooklyn Union’s Natural Choice Program, and 3 years in KeySpan’s deregulated business as COO of KeySpan Energy Services and President of KeySpan Energy Supply. Mr. D'Angelo joined TG&E in April of 2001 with over 10 years of regulatory experience. Mr. D'Angelo's previous experience includes work in the telecommunications industry as Director of Regulatory Affairs for Nextlink, currently XO Communications. He also worked at the New York Public Service Commission in the General Counsel’s Office and has over 5 years experience as an Administrative Law Judge for New York State and New York City.

A number of very prominent speakers and PUC Commissioners have agreed to speak at 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. A quick registration form is hotlinked here for your convenience. A draft agenda is also hotlinked here.

Please contact NEM headquarters if you are interested in speaking, sponsorship or table-top space at the conference, as space will be limited.

NEM has publication opportunities in Harts Energy Markets and Power & Gas Marketing magazines. NEM members are encouraged to submit articles to headquarters for inclusion in these magazines ASAP.

The Wall Street Transcript will be holding a conference on June 6, 2002, on "Business Strategies in an Era of Volatile Energy Prices." Topics to be addressed include projections of domestic and world energy consumption, risk assessment in development and security of energy-related projects, geopolitics of oil, and alternative energy solutions. The meeting will be held at the Princeton Club in New York City. The full text of the Agenda is available on the NEM Website. Members wishing to speak should contact headquarters ASAP.

NEM submitted a letter to Senator Bingaman opposing the application of PUHCA requirements to power marketers. NEM argued that power marketers do not fall within the definition of utility companies subject to PUHCA because they do not own utility assets or other facilities used in utility operations. NEM also argued that PUHCA is intended to curb abuses of complex corporate structures and financing whereas the Federal Power Act is intended eliminate unjust and unreasonable rates. Power marketers are therefore properly excluded from PUHCA regulation. NEM also asserted that subjecting power marketers to PUHCA requirements would cause substantial harm to the power industry. The full text of NEM's Letter is available on the NEM Website.

CFTC plans to reorganize in order to better implement the Commodity Futures Modernization Act of 2000 that deregulated U.S. futures and derivatives markets. Pursuant to the plan, three new divisions assume the responsibilities currently held by the divisions of trading and markets and economic analysis. The three divisions will include: the division of market oversight, responsible for regulatory oversight of trade execution facilities, market surveillance, rule enforcement and amendment reviews; the division of clearing and intermediary oversight, responsible for oversight of the activities of clearinghouses and brokers; and the office of the chief economist, responsible for providing expert economic advice, policy analysis, economic research, education and training to the commission.

FERC will convene two sessions to coincide with the NARUC meetings next week. A session to address whether all wholesale and retail transmission services should be under the same rates, terms and conditions will be convened on February 10, 2002, at 10AM. FERC released a discussion paper on implementation of a single transmission tariff applicable to all wholesale and retail loads. The paper sets forth proposed terms for inclusion in the tariff such as interconnection and transmission rights, calculation of ATC and TTC by an independent entity, and explicit assignment of CBM costs to a load within the control area that is benefitted. State Commissioners are requested to consider whether the dual jurisdiction transmission model makes sense, how to transition to a single transmission tariff approach, and how to accomodate state commission obligations to protect retail customers and responsibility for bundled retail rates.

A session to address whether FERC should require RTOs to administer regional, long-term capacity obligations will be held February 11, 2002, at 4PM. FERC released a discussion paper on options to encourage new capacity construction. These options include: 1) requiring load serving entities (LSEs) to acquire specified amounts of generation capacity credits; 2) requiring LSEs to hold contracts with wholesale producers for generation and/or demand reduction in excess of the LSEs' projected demand; 3) requiring LSEs to secure control over generation and/or demand reduction in excess of projected demand; and 4) utilizing economic development incentives to attract new generation. The paper also sets forth considerations for a capacity reserve obligation that is only physical as well one that is contractual and physical.

The full texts of the Notice of FERC-NARUC Meetings, Discussion Document on Transmission Tariffs, and Discussion Document on Capacity Reserves are available on the NEM Website.

FERC will convene another Standard Market Design Technical Conference on February 19, 2002. The purpose of the conference is to discuss the allocation of RTO functions and characteristics among separate organizations in an RTO region. The discussions will also involve allocation of the responsibility for performing other wholesale market functions such as administration of a balancing market and security coordination. The full text of the Notice of Technical Conference is available on the NEM Website.

The topics of discussion at this week's technical conference included energy markets and operating reserves, transmission rights and financial rights, and market power mitigation. A Summary of the Technical Conference Discussions is available on the NEM Website.

FERC released a straw paper for discussion by the Market Power Monitoring and Mitigation Panel at this week's conference. The straw provides as follows: 1) Market power is defined as, "the ability to raise market price above the competitive level," exercised by withholding capacity or output from the market or by raising the price or offer. A price is above the competitive level if it reflects an excess over true scarcity value; 2) The promotion of price-responsive demand via market rules, meter dissemination and retail tariff structures should be a priority; 3) In regions that do not support workable competition, there should be more stringent preventive mitigation including denial of market-based rate authority and increased merger scrutiny; 4) Competitive prices recover marginal costs of production, and marginal costs include variable costs as well as the marginal opportunity cost of all legitimate opportunities, costs and risks, such as the opportunity cost of selling to neighboring regions, forced outage risk costs, start-up and no load costs, technical inflexibilities, and the opportunity cost of selling at other time periods because of limited hydropower reservoirs or environmental constraints. Offers should not be required to be below the marginal opportunity cost of any unit, including the geographic opportunity cost of selling to other regions, and the temporal opportunity cost of selling energy-limited resources during other periods; 5) Withholding of output should be the focus of monitoring as opposed to pure financial contracts; and 6) After the fact analysis of market power should rely on actual evidence of withholding output. Ex post mitigation, such as refunds and price revisions, should be avoided.

The full text of theStraw Discussion Paper for Market Power Monitoring and Mitigation Panel is available on the NEM Website.