The California Senate is considering SB 2000 on "Unlawful Electric Power and Natural Gas Practices." By the terms of the bill, any person engaged in the business of generating, selling, distributing, transferring, marketing, or trading electricity or natural gas is prohibited from engaging in or knowingly facilitating the following conduct: 1) physical withholding of electricity; 2) economic withholding of electricity by submitting bids above the reasonable price for that electricity in a fair and competitive market; 3) creating, prolonging, or using shortages or outages; 4) scheduling electricity with the intent or knowledge that it will create congestion or the false impression of congestion or will result in a congestion counterflow payment or compensation to reduce congestion; 5) selling electricity to a person in another control area knowing that a similar amount of electricity will be repurchased in the original control area to avoid market rules; and 6) selling, distributing, transferring, marketing, or trading electricity or natural gas between subsidiaries of the same company. Those who engage in this conduct will be required to disgorge the profits of that conduct as well as pay three times the amount of the disgorgement in damages. The full text of SB 2000 is available on the NEM Website.

Contrary to many of NEM's recommendations, the Commission issued an Order on standard offer service (SOS) providing that: 1) it can extend the electric utilities obligation to provide SOS upon a finding that the retail electric supply market is not competitive or that no acceptable competitive proposal has been received; 2) the Commission can delay the competitive selection of an SOS provider for any reason consistent with the public interest; 3) the electric restructuring law permits competitive selection of electricity suppliers to provide either retail or wholesale SOS or both; 4) an electric utilities obligation to provide SOS ends July 1, 2003, unless extended by the Commission for residential and small commercial customers; and 5) the electric utilities remain obligated to perform SOS pursuant to the terms of the settlements. The Commission has requested additional comments on the following issues: 1) the definition of small commercial customer; 2) under what circumstances should default or POLR service be provided and under what circumstances should competitive suppliers perform this service; 3) the state of electric competition in Maryland; and 4) procedures to implement a wholesale or retail SOS bidding process, what factors to consider in whether or not to conduct SOS bids, and the time frame needed to conduct the bids. Comments are due June 21, 2002. The Commission also directed that the parties resume discussions on other SOS matters and provide an updated status report by July 19, 2002. The full text of the Order is available on the NEM Website.

The Commission issued an Order clarifying its decision on lost revenue recovery mechanisms. Affirming NEM's arguments, the Commission stated that, "customers who migrate to ESCOs must be able to avoid the utility's retail service costs. No market can develop if the ESCO customer must continue to pay the utility for retail service the utility no longer provides." The Commission also said that no customer should be able to avoid paying for POLR service. The Commission further explained that it will not allow lost revenue recovery when customers migrate unless the utility "appropriately manages and mitigates its costs and its customer base and/or sales are below those assumed in its rate proceeding."

The Commission also rejected ConEd's objection to the incremental cost study methodology. The Commission reasoned that if all joint and common and administrative and general costs were exclued and the extent of the contestable market was limited to less than 100% it would produce a study that, "would not include all costs which a customer should be able to avoid in migrating to an ESCO." The full text of the Order is available on the NEM Website.

RG&E filed draft electric and gas tariffs as well as a proposed lost revenue recovery mechanism in the unbundling proceeding. RG&E proposes to continue the revenue recovery mechanism in its currently effective gas tariff. RG&E proposes to include a net lost revenue recovery mechanism for the difference between the competitive service credits and its unitized short-run avoided costs for electric customers. The full text of the RG&E Filing is available on the NEM Website.

A conference will be convened for RG&E to present its standby rate tariff filing. The conference will be held on June 11, 2002, at 10:30AM in the 19th floor boardroon of the PSC's Albany offices. The full text of RGE's Proposed Standby Delivery Service Rates is available on the NEM Website.

Staff has filed a report on supplier consolidated billing. Staff recommends that: 1) the existing LDC consolidated billing rules should apply reciprocally to CSP consolidated billing; 2) competitive suppliers should be required to provide the relevant LDC and Staff written notice at least 30 days in advance of its initial offering of consolidated billing service in the service territory of each LDC; 3) competitive suppliers should be required to establish adequate financial security for estimated liability associated with the collection and remittance of state, local, and special regulatory consumption taxes; and 4) an interim consolidated billing implementation plan providing for EDI transaction workarounds on a utility-by-utility basis should be implemented rather than full EDI development and associated LDC billing system modifications. Comments are due on the report by June 27, 2002. The full texts of Staff's Report and the Order Soliciting Comments are available on the NEM Website.