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September 23, 2002
ConEdison Solutions Elected to NEM Executive Committee

NEM is pleased to announce that ConEdison Solutions® has been elected to the Executive Committee. ConEdison Solutions provides a wide range of energy procurement and management services to companies, helping our customers successfully navigate the new competitive energy landscape. ConEdison Solutions will be represented within NEM by Stephen B. Wemple, Director, Retail and Regulatory Affairs, and Gil C. Quiniones, Managing Director, Product & Program Development.

EnergyClear Corporation Elected to NEM Executive Committee

NEM is pleased to announce that EnergyClear Corporation has been elected to the Executive Committee. EnergyClear Corporation is the first industry owned and sponsored clearinghouse for over-the-counter (OTC) energy markets. EnergyClear Corporation will be represented by Dennis Earle, President, and Holly Arney, Senior Vice President, Strategy and Risk Management, within NEM.

NEM Meeting on FERC SMD NOPR, Credit, Risk, Financial Governance, State Retail Programs and Consumer Aggregation Rights will be Held September 26 and 27, 2002, in Chicago

NEM's Executive Committee will hold an important meeting to review, identify and prioritize issues and vote on NEM's position on the FERC NOPR on Standard Market Design, Next Steps to Develop and Implement Industry Standards for Risk Valuation, Management and Financial Governance as well as review and prioritize NEM's positions on State Retail and Technology-related issues on September 26 & 27, 2002, in Chicago. The final agenda is hotlinked here. The meeting will be open to all NEM members and prospective members. A brochure and quick registration form are hotlinked here for your convenience. A listing of area hotels is also hotlinked here. Please be sure to reserve a hotel room and RSVP so that we can plan to have enough room and meals.

NEM Policy Chairs will lead the discussion on all issues. Your attendance and input on these important issues is encouraged and will be appreciated.

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 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. A hotlink for signup is provided here.

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

NEM Discuses Credit, Risk Management and Financial Accountability Issues with DOE's Electricity Advisory Board

NEM, EEI, CCROs and ESPSA presented a united industry front to support an industry based s9olution to the credit, risk management and Fincaial Accountability issues facing the industry. Officials from FERC, SEC , CFTC and Standard and Poors also presented thier views on current events. Copies of the materials presented will be supplied to those attending NEM's meeting in Chicago

FCC NOPR on Telephone Solicitations and Do-Not-Call Lists

FCC has issued a NOPR to reexamine its rules adopted under the Telephone Consumer Protection Act. The Commission seeks comments on: 1) its previous determination not to adopt a national do-not-call registry; 2) FCC actions to be taken in conjunction with the FTC's proposal to implement a national do-not-call list; 3) the burdens on telemarketers of compliance with a national registry and whether distinctions should be made for small businesses; 4) whether a national do-not-call registry should be established for a two-year trial period; 5) whether state do-not-call registries have been effective in preventing unwanted solicitations; and 6) whether the existence of state do-not-call lists eliminates the need for a national do-not-call list. The Commission also proposes revisions to its rules on the use of autodialers, prerecorded messages and unsolicited facsimile advertisments consistent with changes in technological developments and telemarketing practices. Comments are due 45 days after the date the NOPR is published in the Federal Register. The full text of the NOPR is available on the NEM Website.

NEM Meeting with FERC Staff on Standard Market Design

NEM and its members attended a meeting with FERC Staff last week to discuss the Standard Market Design NOPR. Issues discussed at the meeting included: utility socialization of Locational Marginal Pricing, market mitigation measures, supplier access to Congestion Revenue Rights, resource adequacy requirement alternatives, concerns about small Independent Transmission Providers, sector breakdown of advisory committees, and software standardization. The full text of the Meeting Notes are available on the NEM Website.

Senate Testimony of Chairman Wood on Standard Market Design

Testifying before the Senate Committee on Energy and Natural Resources about Standard Market Design, Chairman Wood stated that, "[t]he wholesale power market today has many of the worst features of both regulated and competitive markets, and few of the benefits of either." Standard Market Design will remedy these conditions.

Wood said that the SMD NOPR would not cause cost-shifting between states because the, "proposed rule does not abrogate existing contracts for power or transmission; it encourages load-serving entities in low-cost states to keep their existing low-cost power at home under long-term contracts and/or retail state regulation." Wood said that with respect to funding for new transmission lines that the NOPR expressed a preference for the "beneficiary pays approach" but the decision would rest with Regional State Advisory Committees. Wood also noted the opposition to the proposal to treat all transmission uses the same, but responded that, "it is not possible to create a fair and equitable marketplace without use of a single set of rules for uses of the transmission grid." Wood also said that he thought wholesale customers should be assured of protection against congestion costs for the life of generation supply contracts. The full text of Chairman Wood's Testimony is available on the NEM Website.

Order on RTO West Proposal

FERC issued an Order on the RTO West proposal. The Commission found that the RTO West proposal, "with some modification and further development of certain details, will satisfy not only the Order No. 2000 requirements, but also can provide a basic framework for a standard market design for the West." The Commission found the governance structure, short-term reliability requirements, license plate rate design, locational based pricing proposal, and proposal for OASIS, ATC and TTC calculations satisfy Order 2000 requirements. FERC directed the Applicants to file a complete list of their facilities and their disposition under RTO West. FERC then deferred the issue of operational authority pending resolution of which of those facilites will be under RTO West control. FERC approved the voluntary contract conversion proposal. FERC also approved the export fee based on the average cost of the RTO West transmission system on a transitional basis. FERC required the Applicants to develop RTO West-wide interconnection standards. FERC found that the market monitoring unit proposal is a reasonable interim measure subject to further Commission review. Finally, the Commission directed the Applicants to further consider incorporating a day ahead market, a resource adequacy plan, and market mitigation measures. The full text of the Order is available on the NEM Website.

Commission to Consider Rules on Gas Pricing

The Commission has prepared a draft NOPR that would establish rules as to, "whether the prices for natural gas paid by firm retail customers are not constrained by market forces and are significantly higher than such prices would be if they were constrained by market forces." The PSC delayed acting on the NOPR at its last meeting for 2 weeks, but it is expected that the NOPR will be released for comment by October 1, 2002. The draft NOPR provides that the Commission can temporarily direct distribution utilities to serve firm retail customers. The draft NOPR also provides for the imposition temporary price regulations on marketers. The price regulations would be imposed on a showing that market conditions are not competitive or prices are not constrained by market forces and are significantly higher than they would be if they were constrained by market forces. The draft NOPR would establish a rebuttal presumption that market conditions are not competitive if three or fewer marketers serve more than 90% of firm retail customers in a specific delivery group. The draft NOPR provides that prices are not contrained by market forces if 2 of 4 requirements are met: 1) the Herfendahl-Hershman Index exceeds 2500; 2) an individual marketer or group of marketers has excessive market power; 3) the market lacks the structure of an industry that is likely to result in competitive pricing; or 4) tacit or overt collusion between marketers has taken place in the delivery group. The draft NOPR provides that prices would be deemed significantly higher than if constrained by market forces if: 1) over the previous 12 months, the prices are more than 10% higher than such prices would be if constrained by market forces; 2) over the previous 3 months, the prices are more than 20% higher than the prices would be if they were constrained by market forces; or 3) current prices are more than 30% higher than the prices would be if they were constrained by market forces. The full text of the Draft NOPR is available on the NEM Website.

NEM Brief in Detroit Edison Unbundling Proceeding

NEM submitted a brief in the Detroit Edison unbundling proceeding arguing that DTE's unbundling application should be rejected because it fails to satisfy statutory unbundling requirements. NEM urged the Commission to require DTE to implement fully allocated embedded cost-based unbundled rates. NEM argued that the current proceeding is the proper forum to examine unbundling of DTE's rates beyond the basic elements of distribution, transmission and generation. NEM also urged that DTE's proposed alternative to unbundled billing should be rejected and that the Commission must ensure that any Transmission System Charge is implemented in a competitively neutral manner. The full text of NEM's Brief is available on the NEM Website.

New York
Order on Implementation of NYSEG's Retail Access Program

The Commission issued an Order on the implementation of NYSEG's retail access program. The Order requires that a collaborative process be used to develop a means of ensuring that NYSEG implements a single bill by January 1, 2003. Possible options discussed by the Commission include a metric-based penalty system or NYSEG's purchase of ESCO accounts receivable while temporary single bill protocols are in place. The Commission stated that Staff would review the data to address concerns about the objectivity of the energy supply data underlying NYSEG's Bundled Rate Option calculation. The Commission also extended the deadline for delivery rate promulgation to December 31, 2002, finding the delay is permissible because customers will pay the same delivery charge regardless of whether the utility or ESCO rate options are selected. The full text of the Order is available on the NEM Website.

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