September 21, 2001


 NEM's Fall and Spring Meetings

All NEM members and prospective members are invited to join the Executive Committee for an open meeting on October 3-5, 2001, at the Palmer House Hilton in Chicago. A revised agenda for the meeting is hotlinked here for your convenience. Discussions at the meeting will include infrastructure security, and Paula Scalingi, Director of the Office of Critical Infrastructure Protection for the U.S. Department of Energy will join us for this topic. Also of note, the National Petroleum Council recently released a report entitled, "Securing Oil and Natural Gas Infrastructures in the New Economy," (hotlinked here) recommending an industry information sharing mechanism to share information on physical and electronic threats and solutions. Many thanks to Exelon, Nicor, Peoples, InBusiness Teleservices and Encorp for sponsoring the meeting.

Please also mark your calendar for April 1 and 2, 2002, the Annual Membership Meeting and National Restructuring Conference, that will be held at the Marriott Metro Center in Washington, DC.

 NEM Member Opportunity

The following Michigan cities have agreed to establish an agency to aggregate electric load for direct access service: Albion, Alma, Alpena, Ann Arbor, Augres, Battle Creek, Berkley, Breckenridge, Brighton, Cadillac, Caro, Cheboygan, Coopersville, Dewitt, Elk Rapids, Frankenmuth, Gladwin, Grand Rapids, Grant, Harper Woods, Holly, Ionia, Lapeer, Lincoln Park, Northville, Ortonville, Rochester, Saline, Southgate, Tecumseh, and Trenton. The agency will be established within the Michigan Municipal League (MML). Members interested in pursuing this opportunity should contact Bill Mathewson of MML at (734) 669-6305 or Douglas Thomas, City Manager of Alma, at (517) 463-8336.

 MAPP Tariff Based on NEM Master Power Purchase and Sale Agreement

MAPP's Power and Energy Market filed a new market rate tariff with FERC based on the NEM/EEI Master Power Purchase and Sale Agreement which established standardized products and delivery terms for wholesale power transactions. Many thanks to Chris Bernard and Marty Jo Rogers of Entergy-Koch for their fine work on this standardized contract. The full text of Version 2.1 of the NEM/EEI Master Power Purchase and Sale Agreement is available on the NEM Website.

Federal Issues

 EIA Electric Power Surveys

EIA issued revised proposed electric power surveys for OMB review. Comments are due on the revised surveys by October 11, 2001. Significantly, EIA changed the surveys to afford fewer data responses with confidentiality protection despite the comments made by NEM and others that such confidentiality is necessary to preserve competitive information. The full text of the Notice Requesting Comments, EIA's Summary of Changes, and EIA's Statement in Support Including Revised Forms is available on the NEM Website.


 Report on Northeast RTO Mediations Released

The ALJ in the Northeast RTO mediations has issued a report concluding that the Business Plan developed by the parties represents a viable blueprint for the creation of a single Northeast RTO. The ALJ further recommended that: 1) the Commission should initiate settlement procedures for the "going-forward" phase of this proceeding; 2) the Commission should endorse the market design proposal whereby market rules, tariffs, operating criteria, business processes, implementation teams and functional requirements are completed during an initial twelve month period with a twenty-four month systems and market implementation phase to follow based on the PJM platform but also incorporating best practices from other ISO markets; 3) the Commission must provide further guidance on stakeholder governance process issues, perhaps in conjunction with settlement procedures; and 4) independent, non-vendor experts should be involved in technology assessment from the beginning, including the IT and applications technologies assessments. The full text of the Report and Business Plan are available on the NEM Website.

 FERC Ethics Briefing

The Commission will host a briefing on the ethical considerations of inviting FERC employees to attend and participate in events, particularly those sponsored by the regulated community. The briefing will take place at 10AM on October 17, 2001, in the Commission Meeting Room at 888 First Street, N.E., Washington, D.C. Those who wish to attend should contact Sylvia Taylor at 202-208-0457/ by October 10, 2001.

State Issues

New Jersey

 S.1908 - Permits Energy Telemarketing

S.1908, which permits energy telemarketing, was signed into law on September 7, 2001. It requires that a list be maintained by the BPU for customers who do not want to be contacted by phone. Staff is looking for additional cost projections for maintaining a "no call" list either at the Board or through a subcontractor and anticipates that it will be reaching out to both suppliers and utilities for business practice suggestions in the next few weeks. The full text of S.1908 is available on the NEM Website.


 Purchase of Receivables and Bill Ready Guidelines

The Commission approved non-binding guidelines for the purchase of receivables from a certified retail electric service provider by an electric distribution utility and bill ready billing. The full texts of the Order and Guidelines are available from NEM headquarters.


 ComEd Delivery Services Tariff Proceeding

ComEd filed rebuttal testimony in the delivery services tariff proceeding arguing that: 1) marginal cost pricing should be used to set ComEd's rates; 2) marginal costs should be used to set the back-out credit for unbundled metering and billing services despite the fact that the Commission previously ordered that embedded costs be used; 3) the allocation of costs to delivery rates that were previously allocated to generation is reasonable and reflects the loss of economies of scope due to divestiture; 4) unbundling rates may not improve customers understanding of the costs underlying services provided, and further unbundling is not an appropriate subject for this case; 5) compliance with federal and state electronic signature laws will not satisfy state customer switching requirements of "written authorizations"; and 6) restructuring of the electric industry and ComEd's obligations as provider of last resort create new risks for ComEd's distribution business. The full text of ComEd's Testimony is available on the NEM Website.

 Peoples Gas Choice Proceeding

Peoples filed rebuttal testimony in its gas choice proceeding arguing that its proposed 3% daily delivery tolerances, twelve month minimum stay requirement, enrollment limits (year 1 - 75,000, year 2 - 125,000, and year 3 - 180,000) should be accepted. Peoples also argued that its proposed charges (application charge-$2000, aggregation charge-$200 per pool plus $1.25 per customer in each pool, customer pool activation charge-$10, LDC billing option-$.50) are cost-based and should be accepted. Peoples also opposed adoption of supplier single billing but included a proposed tariff rider in the event that it is required to implement this service. The full text of Peoples Testimony is available on the NEM Website.


 PUC Suspends Direct Access

On September 20, 2001, the PUC voted to suspend the right of customers to enter into new contracts for direct access effective immediately. They reasoned that the suspension was necessary because in order to sell the Department of Water Resources (DWR) bonds at investment grade the DWR will need a stable customer base from which to recover its costs. They further said that customers might be tempted to switch from utility bundled service to electric service providers in order to avoid the impact of higher rates and take advantage of lower spot market prices and that would not be in the public interest. The PUC did not decide the issue of the treatment of contracts executed prior to September 20, 2001. The PUC also gave notice that it was still considering retroactive suspension of contracts entered into on or after July 1, 2001. The full text of the Order is available on the NEM Website.


 Consumer Counsel Comments on Delmarva Functional Separation Plan

The Consumer Counsel filed comments on Delmarva's functional separation plan. The Consumer Counsel opposed Delmarva's proposal to charge returning customers a Market Priced Supply Service Charge that would include a monthly administrative charge of $750 per month per customer account, a market hourly energy charge and a market hourly capacity charge. The Consumer Counsel argued that the proposal violates state law requiring the utility to charge its customers a capped rate and could deter customer switching. The full text of the Consumer Counsel's Comments is available from NEM headquarters.