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October 18, 2002
NYMEX Elected to NEM Executive Committee

NEM is pleased to announce that the New York Mercantile Exchange, Inc. (NYMEX) has been elected to the Executive Committee. NYMEX is the world's largest physical commodity futures exchange, and the preeminent trading forum for energy, and precious metals, in North America. NYMEX will be represented by Joe Raia, Managing Director, within NEM.

NEM Winter Executive Committee Meeting to Be Held in San Diego on January 16 and 17, 2003

NEM's Winter Executive Committee Meeting will be held in San Diego at the Sheraton San Diego Hotel & Marina, West Tower, on January 16 and 17, 2003. This meeting will be for NEM Executive Committee Members only. As in the past, the Executive Committee will establish the policy positions and priorities for NEM for the coming year. A registration form is hotlinked here for your convenience. A block of rooms has been reserved at the rate of $189 per night. Place your reservations at 619-291-2900 or 888-625-5144. Reservations must be received by December 16, 2002, in order to guarantee the discounted rate.

All Executive Committeee Members are requested to attend. An agenda will be sent out prior to the meeting.

NEM's Annual Membership Meeting and National Restructuring Conference for 2003 - Invitation for Speakers, Sponsors and Exhibitors

Next year’s Annual Membership Meeting and National Restructuring Conference will be held April 3 and 4, 2003, at the Hyatt Regency on Capitol Hill. We have arranged for additional space to accommodate more attendees with a special room for exhibits and added sponorship opportunities. Breakfast and all breaks will be in the exhibition room that is adjacent to and visible from the general session. The Agenda is hotlinked here for your convenience. A registration form is hotlinked is hotlinked here for your convenience.

Members who wish to be speakers, sponsors or exhibitors should contact headquarters immediately. Government officials and PUC commissioners have already started to RSVP.

NEM Meeting with CCRO Group

Thanks to the efforts of Steve Greene, a meeting has been scheduled for NEM members to be briefed on the work of the CCROs on Thursday, October 24, 2002, in PG&E Corporation's DC office located at 700 Eleventh Street, NW, Suite 250 (12th & G Street exit from Metro Center stop) between 1PM EST and 3PM EST. For emergencies, directions, etc., the office number is (202) 638-3500. There is only room for 25, so please advise NEM headquarters if you plan to attend.

For those who cannot make the meeting in person the NEM bridge will be available by dialing 703-788-0600 and using passcode 209353.

EPRI Activity on RTO Data Standards

An EPRI CME (CIM Market Extensions) subcommittee is compiling a glossary of terms used in the electricity wholesale market. They are trying to set up a central data repository for all the terms and definitions used by the various players in the wholesale electricity markets in North America. They already have several glossaries of such terms, including the SMD Tariff, NERC, EIA, and CME. They will also be getting terms used by the various ISOs, such as NYISO, PJM, CAISO. They would like to ensure inclusion of all the possible terms used by the market participants. A draft glossary of terms compiled thus far is available. NEM members are requested to forward glossaries or other sources that they believe should be included to The full text of the Draft Glossary is available on the NEM Website.

Standard & Poor's Study on Transparency and Disclosure

Standard & Poor's prepared a study entitled, "Transparency and Disclosure: Overview of Methodology and Study Results-United States." The study assesses transparency and disclosure practices of major public companies around the world. The study ranks U.K. and U.S. companies as providing the highest levels of disclosure. The study notes that the main similarity in disclosure practices across regions is that financial information is disclosed more than information pertaining to ownership, investor rights, or board information. With respect to U.S. companies in particular, the study found that there is considerable variance in the disclosures set forth in annual reports. The report also found that transparency and disclosure rankings were inversely related to market risk and that, "U.S. companies that provide more voluntary disclosure in their annual reports command a higher stock price." The full text of the Standard & Poor's study is available from NEM headquarters.

SEC Proposes Additional Rules to Implement Sarbanes-Oxley Act

SEC has proposed additional rules to implement the Sarbanes-Oxley Act. The proposed rules would require companies to report: 1) the number and identity of financial experts on a company's audit committee as well as their status as independent of management; and 2) whether (and if not, why not) a company has adopted a code of ethics applicable to the principal executive officer and senior financial officers as well as whether amendments to the code have been made. It is proposed that companies file an annual internal control report as part of their annual report and conduct quarterly evaluations of internal controls and procedures for financial reporting. Finally, the proposed rules prohibit officers and directors of an issuer as well as those acting under their direction from taking action to, "fraudulently influence, coerce, manipulate or mislead the auditor of the issuer's financial statements for the purpose of rendering those financial statements materially misleading." Comments on the proposed rules are due thirty days after publication in the Federal Register. The full text of the Press Release is available on the NEM Website. The full text of the Proposed Rules will be posted on the NEM Website when made available electronically.

Order on CAISO Market Redesign Proposal

The Commission has issued an additional order on the market redesign proposal of the CAISO. The Commission retained the $250/MWh bid cap but clarified that in order to allow generators to recover operating costs, they may submit bids above the bid cap (although such bids can't set the market clearing price and will be subject to justification and refund). With respect to the Automatic Mitigation Procedures (AMP), the Commission ordered that it should not be applied to imports. However, bidders outside of California must continue to submit zero bids into CAISO markets. The 10% creditworthiness adder to the market clearing price paid to generator bids will expire October 31, 2002. The Commission also approved the modification to the implementation schedule such that a modified day ahead market will be implemented by January 1, 2003, and the remaining Phase II issues will be postponed until the implementation of Phase 3 in Fall 2003. The full text of the Order is available on the NEM Website.

ALJs Issue Proposed Order in ComEd POLR Proceeding

The ALJs in the proceeding on ComEd's petition to declare service to customers 3MW or above on Rate 6L as competitive have issued a proposed order. The Proposed Order adopts many of the recommendations of NEM. The Proposed Order concludes that the petition for competitive declaration should be granted by operation of law. The Proposed Order reasons that ComEd's petition has met the statutory requirements for a competitive declaration as follows: 1) ComEd has identified a subject customer segment or group of customers for the declaration; 2)RES flowed power and energy is a reasonably equivalent substitute service; 3) comparable prices for power and energy to Rate 6L are available; 4) customers with usage of 3MW and above are being served by more than one provider other than the electric utility or an affiliate of the electric utility; 5) ComEd has sustained a loss of business to alternative suppliers for the relevant customers; 6) ComEd has adequate transmission capacity into the service area to make electric power and energy reasonably available; and 7) there has been substantial customer switching in the relevant customer class. The Proposed Order also finds that new customers can initiate service under Rate 6L during the three-year transition period. The Proposed Order rejects Staff’s proposal to require ComEd to allow customers that are taking service from competitive suppliers to return to service under Rate 6L by giving thirty days notice prior to the end of their contract. The full text of the Proposed Order is available on the NEM Website.

ComEd Files Proposed Revisions to Market Value Index Tariff

Pursuant to Commission Order, ComEd has filed proposed revisions to its Market Value Index (MVI) tariffs to take effect on or before the May 2004 billing period. ComEd proposes the following revisions to the calculation of the Market Value Energy Charge (MVEC): 1) use "into Cinergy" off-peak wrap forward prices instead of historical off-peak spot market prices; 2) use multiple years of historical PJM West real-time prices and customer load data instead of a single year in the shaping and loading adjustments; and 3) use average positive off-peak values for the applicable month in place of zero or negative values in PJM West price data for the shaping and loading adjustments. ComEd proposes the following revisions to Rider Purchase Power Option (PPO) and Rate CTC-Customer Transition Charge: 1) move the market data collection period for Applicable Period A up from March to January; 2) limit enrollment windows for Rider PPO; 3) increase the number of customers receiving individually calculated CTCs to include customers in the 1,001 kw to 3,000 kw customer class; and 4) ComEd will make available preliminary estimates of customer class MVECs and CTCs. ComEd is proposing a new experimental tariff that would allow certain customers receiving generation service from a retail electric supplier (RES) to lock in their CTC for a two-year period. ComEd is also proposing a change to Rider ISS-Interim Supply Service such that customers that received service under the experimental tariff that are transferred to Rider ISS by their supplier and fail to select a new RES will receive service under Rate HEP instead of the bundled tariff. The full text of ComEd's Filing is available on the NEM Website.

Distributed Generation Collaborative

DTE ordered the use of a collaborative process to propose by December 16, 2002, interconnection standards, policies, and procedures to be uniformly applicable to all utilities. Five day-long meetings of the colloborative are proposed as follows: November 4, 12, and 20, and December 6 and 13 (locations still to be determined). The Collaborative Invitation Letter is available on the NEM Website.

New Jersey
Staff Comments on Basic Generation Service

Staff submitted comments on the Basic Generation Service (BGS) post-transition procurement process. Staff argued that the Board could now determine the “next logical group of customers” for which the utilities could start installing interval meters and collecting data to be used to determine class profiles and to convert those customers to Hourly Energy Pricing in Year 6. Staff also recommended the use of a 5 mill adder for Fixed Price BGS customers and Hourly Energy Pricing BGS customers. Staff recommended that "green" retailers be provided with an additional 5 mill retail adder for each kilowatt-hour of green power supplied. The full text of Staff's Comments are available on the NEM Website.

Proposed Rule on Retail Market Performance Measure Reporting

The Commission issued proposed rules to establish reporting requirements for ERCOT, retail electric providers (REPs), and transmission and distribution utilities (TDUs). REPs would be required to file a copy of each monthly EIA Form 826, data on customer enrollment transactions with the utilities to assess customer enrollment success, and data on meter read transactions with the utility to assess meter read transaction success. Comments are due November 11, 2002, and reply comments are due November 25, 2002. The full texts of the Proposed Rule and Proposed Filing Package are available on the NEM Website.

Proposed Rule on Complaint Procedure for ERCOT Action

The Commission issued a proposed rule to establish procedures for making written complaints to the commission about ERCOT. The proposed rule describes the process for filing the complaint, issuing replies, providing notice, intervention, and requests for oral argument or evidentiary hearings. The proposed rule would allow complainants to forego the step of the ERCOT ADR process and complain directly to the Commission under certain circumstances. Initial comments are due November 12, 2002, and reply comments are due November 25, 2002. The full text of the NOPR is available on the NEM Website.

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