May 11, 2001


 Belmont Customer Acquisition Inc. Joins NEM

NEM is pleased to announce that Belmont Customer Acquisition Inc. has joined NEM. Belmont Customer Acquisition Inc. (BCA) is a dedicated customer acquisition and lead generation agency for the energy marketing industry. Peter Ward, President and CEO, Raymond Shapira, Vice President, Business Development, and Christopher J. Roth, Director of Sales, will represent BCA within NEM.

 NEM Summer Policy Development Meeting

NEM Executive Committee members are reminded that the summer policy development meeting will be held June 28-29, 2001, at the Hotel Boulderado in Boulder, Colorado. Please call 1-800-433-4344 for our special rate. Rooms at the Historic Boulderado are very limited. Agenda items will include NEM's strategy for summer shortages, the development of National Guidelines Distributed Generation/Self Generation, Interconnection and Back-up Power Policies, strategies for Utility offerings of long term fixed prices, competitive services by tariff, and the next steps on National Energy Technology Policy development and implementation.

 NEM-FERC Meeting Scheduled

NEM will be meeting with FERC's Office of Markets, Tariffs & Rates on June 1, 2001, from 2PM-3:30PM EST. A conference call will held on May 24, 2001, at 2PM EST to prioritize issues for discussion. The conference call number is 303-248-1820 and the passcode is 428358. A tentative list of issues that has been developed for discussion that day include RTO development (slow pace, independence, access, ATC, seams, configuration, California takeover of transmission) and price caps. NEM members will meet for lunch prior to the meeting. Those NEM members interested in participating should contact headquarters ASAP.

Federal Issues

 NEM Opposes New EIA Reporting Requirements to be Imposed on Electricity Marketers

NEM filed comments opposing EIA's proposed electric surveys that would require reporting and recordkeeping from unregulated energy service providers. NEM argued the proposed surveys are not within EIA's statutory authority. NEM also argued the proposed surveys are a major rulemaking, with significant microeconomic and macroeconomic impacts, that has not been propounded in accordance with administrative law principles. Accordingly, NEM argued the proposed surveys should be rescinded and directed solely to regulated entities. Alternatively, NEM argued that if Congress did grant EIA the requisite authority to impose the surveys, reporting should only be made on a voluntary basis and only after 25 percent customer migration has been achieved. The full text of NEM's Comments is available on the NEM Website.

 H.R.794 Energy Security for American Consumers Act of 2001

The House Ways and Means Committee is considering H.R. 794 which would extend the Section 29 tax credit for gas wells to the year 2016 with a gradual phase out beginning in 2012. The full text of H.R. 794 is available on the NEM Website.


 Technical Conference on California Gas Markets

Staff will convene a technical conference to address current and projected interstate natural gas pipeline capacity to California and the adequacy of the natural gas infrastructure within California. The conference will be held May 24, 2001, at 10AM. The full text of the Notice of the Conference is available on the NEM Website.

 Commission Orders Bid Cap Extensions for NYISO and ISO-NE

The Commission has ordered an extension of the $1,000/MWh bid cap for NYISO-administered energy markets effective May 1, 2001, through October 31, 2001. The Commission also ordered the extension of the $1,000/MWh bid cap for ISO-NE's energy, automatic generation control and operating reserves markets effective April 1, 2001, through October 31, 2001. The full text of the NYISO Order and the ISO-NE Order are available on the NEM Website.

NYISO Hybrid Fixed Block Pricing Tariff

NYISO has filed a tariff to implement the hybrid fixed block pricing rule approved by the Commission. The full text of the Filing Letter, OATT (clean), OATT (redlined), Services Tariff (clean), and Services Tariff (redlined) is available on the NEM Website.

State Issues

New York

 Unbundling Proceeding Issue Compilations

The initial issue compilations in the unbundling proceeding have been circulated for comment. The full text of the compilations of Issue 1-Calculating Unbundled Costs, Issue 3-Stranded Costs and Competitive Losses, Issue 4-Interutility Inconsistencies, and Issue 5-Competitive/Monopolistic Functions are available on the NEM Website. The full text of the compilation of Issue 2-Forward Looking Cost Studies will be posted on the NEM Website when made available electronically.

 POLR Proceeding Reply Briefs

Staff filed a reply brief in the POLR proceeding arguing that all functions that can be provided competitively should be and that utilities should not be allowed to remain in markets that become competitive. Staff did however oppose setting a specific date for utilities to exit competitive functions. The full text of Staff's Brief is available on the NEM Website.

 Distributed Generation Emergency Regulation and Emissions Standards

The Department of Environmental Conservation issued an emergency regulation allowing generators that are part of NYISO's Emergency Demand Response Program to operate up to 200 hours per year. The Department will also begin a stakeholder process and technology review to establish emissions standards for new sources of distributed generation. The Notice of Emergency Regulation and a Press Release on the emissions standards process are available on the NEM Website. When additional details on the stakeholder process become available, they will be posted on the NEM Website.

 ConEd Draft Tariffs for Back Up and Supplementary Service

ConEd filed draft tariffs to establish retail rates for service at 138 kV for customers taking service under back-up service or supplementary service classifications. The proposed rate components include a monthly contract demand charge per kilowatt of contract demand, energy charges per kilowatthour of actual usage, a market supply charge (applicable to full service customers only), and a monthly adjustment clause. The contract demand charge is proposed to be applicable every month as a capacity reservation charge whether or not back-up service or supplementary service customers require energy delivered by ConEd. The full text of the draft tariffs is available from NEM headquarters.

 Staff's Central Hudson Settlement Proposal

Staff has prepared a settlement proposal in the Central Hudson proceeding. Due to confidentiality concerns, NEM members interested in reviewing the proposal should contact headquarters.

 NYSEG Revised Tariffs for Market-Based Retail Access Credit

NYSEG filed a revised tariff to implement the Commission's Order requiring NYSEG to remove its proposed cap on the retail access credit and limit on enrollment of new retail access customers, to extend the waiver of twelve month lock in of customers until June 1, 2001, and to remove the proposed surcharge to recover NYSEG's projected costs associated with the 2 mill and 4 mill adders. The full text of NYSEG's revised tariff is available from NEM headquarters.


 HB 2107 and Commission Order on Stranded Cost Recovery

The House passed an amended version of HB 2107, providing that if a utility has negative stranded costs it must reverse prior mitigation to the extent necessary to eliminate any estimated excess of market value over net book value of generation assets and reflect the reversal in transmission and distribution rates. The full text of the Amended HB 2107 is available on the NEM Website. The Commission issued an Order with similar provisions regarding negative stranded costs including a reduction in transmission and distribution charges. The full text of the Order will be posted on the NEM Website when made available electronically.

 Proposed Standard Permit for Small Electric Generators

Texas Natural Resource Conservation Commission (TNRCC) Staff issued a proposed Standard Permit for Small Electric Generators setting forth strict emissions requirements for distributed generation. Industry participants are planning to meet with Staff on May 17, 2001, at 1:30PM at the TNRCC to voice their concerns, and interested persons are invited to attend. The full text of the Proposed Permit is available on the NEM Website.

New Jersey

 Basic Generation Service Meeting

Staff has called an initial meeting to discuss the utilities' bidding of basic generation service for 2002. Utilities and other interested parties are to provide position statements and a procedural schedule will be reviewed. The meeting will be held on May 16, 2001, from 1PM to 4PM in the Board's 8th floor hearing room.

 New Jersey Natural Gas and South Jersey Gas File Revised Tariffs

In compliance with the Board's Unbundling Orders, NJNG and SJG filed revised tariff sheets effective May 1, 2001 and April 1, 2001, respectively. The revised NJNG tariff and SJG tariff are available on the NEM Website.

 Board Approves Customer Response Card

In the Customer Account Services proceeding, the Board approved a customer response card proposed by NJNG, Conectiv, PSE&G, and GPU. The card is a one-time bill insert to customers to assist third party suppliers, registered aggregators and government entities in locating and marketing to customers. The Board approved the use of the card with respect to licensed suppliers and private aggregators only, pending the Consumer Protection and Anti-Slamming Standards rulemaking which will address concerns over government aggregators' ability to maintain confidentiality of customer information. The full text of the Order is available on the NEM Website.


 Natural Gas Supplier Licensing Requirements

The Commission issued final rules on natural gas supplier licensing requirements. In response to NEM concerns about the release of proprietary information, the Commission limited reporting requirements for retail selling agreements between suppliers and nontraditional marketers or marketing consultants to only the disclosure of names and addresses of the marketers or consultants with whom the suppliers arranged for service. Also in response to comments by NEM, and in light of an upcoming collaborative on the subject, the Commission deleted a section on regulatory assessment. Additional requirements include the burden of providing technical and financial fitness information, allowing third-party protests prior to licensing approval, and reporting changes in organizational structure and operations whether in or out of the state. The full text of the Order is available on the NEM Website.

 First Energy-GPU Merger/POLR Proceeding Briefs

Briefs have been filed on the ALJ's Recommended Decision in the FirstEnergy-GPU proceeding. The full text of First Energy-GPU's Brief and Proposed Settlement and Staff's Brief are available on the NEM Website.


 Competitive Metering Report

A competitive metering report has been filed with the Commission with two different implementation recommendations. One approach requires the full unbundling and offering of competitive metering functions on a phased in basis beginning on January 1, 2002, for commercial and industrial customers and for residential customers when benchmarks of market penetration are achieved. The second approach focuses on the provision of meter information on a near real-time, on-command basis and would allow large customers or third party ownership of the meter. The full text of the Report is available on the NEM Website.

 Order on Consumer Protection Requirements

The Commission issued an order providing that: 1) customer lists sold to competitive suppliers may include customer telephone numbers; 2) competitive suppliers need only send a mailing of post-contract consumer rights information if the required information has not already been provided; 3) third party verification of contracts made by telephone is not mandatory, but suppliers must maintain recordings of their telephone transactions; and 4) suppliers must provide customers with an initial notice of the pending renewal of evergreen contracts at least 60 days before the customer's enrollment/termination date and a second notice at least 30 days before the customer's enrollment/termination date. The full text of the Order is available on the NEM Website.