November 30, 2001


 NEM Winter Meeting

Please mark your calendar for NEM's winter meeting to be held in Houston, Texas on January 17 and 18, 2001. Chris Bernard of Entergy-Koch and Tami Pallas of CMS MS&T have generously offered to sponsor the winter meeting that will be held at Entergy's headquarters. The Executive Committee will be prioritizing NEM advocacy goals, issues, states, utilities and resource allocations for 2002 and urges maximum participation by all Executive Committee members. Also, a new membership structure will be discussed including new membership categories for public officials, law firms, consulting firms, and tribal nations. Drafts of the proposals are available upon request. The agenda is hotlinked here for your convenience. A quick registration form is hotlinked here for your convenience. A block of rooms has been reserved at the Renaissance Hotel located at 6 Greenway Plaza East in Houston. Be sure to request the special NEM rate of $119 per night. Contact Jennifer Webster at 281-230-1563 with any problems.

 NEM Spring Meeting

Please make sure you reserve a room at the Marriott Metro Center in Washington, DC, for NEM's April 2 and 3, 2002, Annual Membership Meeting and National Restructuring Conference. A quick registration form is hotlinked here for your convenience. Please contact NEM headquarters if you are interested in speaking, sponsorship or table-top space at the conference, as space will be limited.

State Issues

New York

 NIMO-National Grid Compliance Filing in Standby Rate Proceeding

NIMO-National Grid submitted a compliance filing in the standby rate proceeding. The filing reactivates its SC 7 service classification. The proposed standby service rates are applicable to: 1) customers with on-site generation serving load that is not isolated from the grid; 2) wholesale generators that rely on the electric utility to serve electric loads that would otherwise be served by the generator; and 3) wholesale generators that take station service through the same bus bar as they supply the wholesale grid. Customers served under SC 7 will be subject to minimum charges comprised of a customer charge, an incremental customer charge (if applicable), a standby contract demand charge, and a competitive transition charge. The Company proposes to establish a deferral mechanism to recover the revenue shift resulting from customers being served under the new standby tariff rather than under Rule 12, its existing standby provisions. A technical conference and settlement will held on the filing on December 10, 2001, at 10AM in conference room 308A of NIMO offices in Albany. The full text of NIMO's Compliance Filing is available on the NEM Website.

New Jersey

 Third Party Supplier Fees

Staff proposes to take up the procedural aspect of addressing third party supplier (TPS) fees on its biweekly conference call set for December 10, 2001, at 3PM. Around August 1, 2001, the EDCs made filings concerning their TPS fee structure. All EDCs are going to have distribution rate case proceedings beginning in early 2002. Staff proposes that it may be appropriate to role TPS expenses into the distribution rate and eliminate any separate TPS fees, and that if parties agree, it would make sense to maintain the current fee structure and move the issue into the rate case process.


 Comments Sought on Electric Minimum Stay Requirements

The Commission is seeking comments on a uniform alternative to minimum stay restrictions to be made available to returning customers. The OSPO taskforce was unable to reach a consensus on the matter, and the utilities have submitted tariff filings. The Commission has requested that in addition to addressing the tariff filings, commenters consider the following questions: 1) should the alternative minimum stay be uniform for all utilities?; 2) what principles must be met in implementing a minimum stay requirement to ensure conformance with state restructuring law?; 3) if an exit fee is adopted should it be based upon the utility's loss of receiving the amount it would have under its annualized frozen rate rather than the utility's actual or projected costs of serving the customer?; 4) rather than implementing a minimum stay, should the Commission use its emergency ratemaking authority to rectify losses the utilities may incur?; 5) is there a justification for a market-based "come and go" rate to be imposed in lieu of a minimum stay requirement?; and 6) rather than implementing a minimum stay, should the Commission require that all competitive retail electric supplier contracts be for a 12 or 24 month term. Initial comments are due December 11, 2001, and reply comments are due January 2, 2002. The full text of the Order Requesting Comments is available on the NEM Website.

 Commission Approves Uniform Interconnection Service Requirements

The Commission has approved a settlement agreement on uniform interconnection service requirements. The settlement sets forth a Pro Forma Interconnection Tariff, an Application for Interconnection and Parallel Operation with a Company Distribution System, Technical Requirements for Interconnection and Parallel Operation of Distributed Generation, and the Interconnection Request Screening Process. The utilities are required to file supporting documentation on the cost basis for individual company fee schedules by January 19, 2002. The full text of the Order is available at: and the full text of the Settlement is available at:$E8LRHLF6S5L.pdf.


 Order on Mid-Sized LDC Gas Choice Programs

The Commission issued an Order on mid-sized LDC gas choice programs adopting Staff's Report with a modification. The Staff Report recommended that:

  1. Customer enrollment should be phased in for MGU at 10%, 20%, 40% and 100% levels beginning in 2002, and all customers should be able to participate by June 2005. Customer enrollment for SEMCO should be phased in at 40%, 60% and 100% levels beginning in 2002, and all customers should be able to participate by April 2004. Customers should be able to enroll in a program at any time during the year.
  2. A customerís selection of a Supplier should be effective until (i) terminated by the customer or supplier, (ii) the Supplier becomes disqualified from participating in the choice program, or (iii) the company receives an enrollment for that customer from another Supplier. A customer must stay on a choice tariff for at least 12 months before returning to sales service, although the customer should be permitted to switch between Suppliers. If a Supplier defaults, the customer should return to the LDCís sales tariff, but the customer should have 60 days to find and switch to another Supplier before being required to remain on the sales tariff for 12 months.
  3. Customers that stay on a Choice tariff for at least 12-months and then voluntarily switch back to the LDC should be provided a sales service that includes a GCR Factor. Choice customers that are forced back to the LDCís sales service because of a Supplier default or actions beyond the customerís control, should pay the higher of the market based commodity rate or the GCR based commodity rate for up to three months. Choice customers returning to the LDC sales service because of a Supplierís default, should not have to stay with the LDC for a 12-month period before they can switch back to a Choice tariff. Choice customers forced back to a sales service who choose another Supplier should not be charged a $10.00 switching fee.
  4. LDCs should provide supplier of last resort services to non-transportation customers within their service territories.
  5. The Daily Delivery Obligation (DDO) proposal and Failure Fee proposed by SEMCO should be adopted.
  6. The buy/sell agreement proposal of SEMCO should be adopted. Suppliers should be required to provide their price to the LDC 3 days before the end of the prior billing cycle, and the utility, within 21 days, will pay the Supplier based on gas delivered times the price per Mcf billed less fees. When a Supplier has more than one pool and delivers a monthly cumulative amount of gas that is different from the total DDOs issued, the utility should allocate any gas shortages to the highest priced pools first, and any gas excesses to the lowest priced pools first when making remittances.
  7. Suppliers on SEMCO's system should not be required to demonstrate firm capacity only that they retain pipeline capacity sufficient to meet their customer requirements. MGU should be permitted to assign capacity at its actual cost. If MGU sheds pipeline capacity by not renewing existing contracts, Suppliers should have to demonstrate via an affidavit that the Supplier possesses firm primary capacity to MGU city gates for the five winter months equal the capacity turned back by MGU.

The Commission modified Staff's recommendations to allow MGU to use an annual reconciliation process that recognizes supplier underdeliveries and overdeliveries. The full text of the Order and Staff's Report are available on the NEM Website.

 Order on Slamming and Cramming Rules

The Commission issued an Order adopting slamming and cramming rules for electric suppliers. The rules provide that:

  1. Supplier transfers are to be accomplished in writing, telephonically with independent third party verification, telephonically via customer voice response unit, via internet, or through a three-way call initiated by a prospective new supplier with the customer and the old supplier;
  2. Customers and suppliers being replaced shall receive notification within seven days of a request for change in service from a new supplier by internet, fax, letter or telephone;
  3. Suppliers shall not bill a customer for a service without the customer's prior consent authorizing the provision of the service;
  4. Disputes should be resolved through informal dispute resolution if possible. Otherwise formal dispute resolution will be utilized. Penalties that may be imposed include fines, issuance of refunds to customers and authorized suppliers, and supplier license revocation.

The full texts of the Order and the Slamming and Cramming Rules are available on the NEM Website.

Other Issues

 Commissioners from important states have indicated interest in speaking at NEM's Annual Membership Meeting and National Restructuring Conference in Washington, DC, on April 2 and 3, 2002. NEM members interested in moderating and presenting competitive perspectives are urged to contact headquarters to ensure a slot on this agenda.

 NEM headquarters is offering career networking for its members. Members wishing to take advantage of this new service are urged to contact headquarters - all communications will be held in the strictest of confidences.

 NEM will be testing its new intra-internet functions, list serves and advanced Website functions over the next few months. We urge all members to contact headquarters to with suggestions to make it the best available site for members and the industry. Please let us know any glitches you experience during this testing phase so we can fix them before our formal launch. All ideas, suggestions and recommendations are welcomed and encouraged.