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April 5, 2002
NEM Risk Valuation, Management and Financial Accountability Taskforce Meeting

NEM's Risk Valuation, Management and Financial Accountability Taskforce meeting at the Georgetown Club, 1530 Wisconsin Ave. in Washington, DC will now be held on April 19, 2002, beginning at 11AM and lasting no later than 5:30PM. The purpose of the meeting is to forge consensus on accounting and disclosure standards to promote the proper valuation of energy assets, equity securities and forward energy contracts, including derivatives.

We currently only have room for 20 and need a firm headcount to order food and decide whether we need a larger room at the Georgetown Club. Please RSVP as soon as possible. Call (202) 333-3288 or email

NEM Annual Membership Meeting and National Restructuring Conference

Senators, FERC, PUC and FTC Commissioners have confirmed for NEM's Annual Membership Meeting and National Restructuring Conference to be held June 20 and 21, 2002, at the Marriott Metro Center in Washington, DC. An updated agenda, registration form and electronic brochure is hotlinked here for your convenience. Please note that the registration fee for the conference increases as of April 14, 2002. Also there are only a limited number of rooms at our discounted rate of $139/night.

NEM Master Margin and Netting Agreement Taskforce

NEM and EEI will collaborate on the drafting of a Master Margin and Netting Agreement. Many thanks to Chris Bernard from Entergy-Koch and Dede Russo from Reliant for offering to coordinate this effort. A small drafting group will prepare a strawman over the next few days. The strawman will be circulated to everyone who has expressed an interest.

EEI will discuss this topic at a meeting on April 11, 2002 at EEI's Washington, D.C. offices. The Agenda for the Meeting is available on the NEM Website. NEM and its members will also be present for this meeting.

The full Drafting Committee will meet for the first time on April 25, 2002, from 9AM to 4PM in Houston at the offices of Entergy-Koch located at 20 East Greenway Plaza, First Floor Meeting Facilities, Houston, TX. Since this will be a detailed drafting session, in-person participation is requested. Those interested in helping to draft a standardized netting agreement should register by e-mailing name, title, company, phone, fax and email numbers to General questions should be directed to Esmeralda at (713)544-4795. Specific substantive questions should be directed to DeDe Russo at Reliant Energy Services at (713)207-5240 or at Questions about the meeting location or logistics should be directed to Marty Jo Rogers at Entergy-Koch Trading, LP at (713)544-5282. The full text of the Drafting Committee Meeting Details is available on the NEM Website.

NEM and Cedar Offer Free Webinar on New Visualization Technology

NEM invites its members to a free "webinar" hosted by Cedar Enterprise Solutions to overview an exciting technology that Cedar has deployed on NEM's archives of regulatory pleading and policy statements. Session 1 will be held April 25, 2002, at 11AM EST, and Session 2 will be held April 26, 2002, at 10AM EST.

This technology can be especially helpful in: compliance & regulatory management, technology and research development, new business development & competitor intelligence, business strategy and CRM analytics, security of assets, staff, environment and public, and collaborative knowledge sharing and on line learning.

Please respond with your preferred time to NEM headquarters or Patrick Hogan, Vice President, Cedar Content Value Management, at or (847)607-0310. All participants will also receive a White Paper on Energy and Utility Infrastructure Management using knowledge visualization applications.

NEM Conference Call on Detroit Edison Electric Unbundling and Commonwealth Edison Delivery Services Proceedings

NEM will conduct a conference call to discuss the Commonwealth Edison delivery services proceeding and the Detroit Edison electric unbundling proceeding. The call will be held April 9, 2002, at 2PM EST, or, if a significant number of people indicate they are unavailable, the call will be held April 10, 2002, at 2PM EST. The call-in number is 703-788-0600 and the passcode is 209353.

Staff will convene a meeting to discuss possible settlement of some or all issues in the ComEd case on April 11, 2002, at 9:30AM, at the Commission's Chicago offices. Due to other outstanding commitments, we need member assistance for coverage and participation in the meeting.

Detroit Edison filed its second application to unbundle its electric rates. The application unbundles existing tariffs into distribution, transmission and generation components. Detroit Edison is not proposing to include the unbundled rates in its schedule of rates or in customer bills other than a transmission service charge. Detroit Edison argues this is necessary to comply with the statutory rate freeze requirements. The ALJ has set the procedural schedule for the case and intervenor testimony is due May 10, 2002. Issue identification and a strategy for NEM's participation in this case will be discussed on the call. The full texts of Detroit Edison's Application, Testimony (Part 1), and Testimony (Part 2) are available on the NEM Website.

NEM Member Publication Opportunity

The schedule for submission of NEM member articles for publication in Harts has been changed. The articles are now due by the 1st of the month for publication in the next month's magazine. Members interested in submitting articles for publication should contact headquarters ASAP.

NEM Legislative Analysis and Update

NEM has prepared an update, analysis and a side-by-side comparison of the Senate Energy Bill, the Energy Bill Passed by the House and the Barton Bill that has yet to come to the floor.

NEM has been in contact with Congressional leaders and expects a bill to pass the Senate by the end of next week. Depending on the shape of that bill, Congressman/Chairman Tauzin will either mark up additional language or go directly to conference. Either way it will likely be in Conference into the summer. Once we see the shape of the Senate Bill, NEM can talk to the House to see if we need additional language to leverage into a conference settlement.

If any NEM members have specific issues or requests regarding this bill, please contact headquarters. The full texts of NEM's Legislative Analysis and Side-by-Side Comparison are available on the NEM Website.

H.R.4038, Market Oversight Consolidation and OTC Derivatives Regulation Act Introduced

Congressman DeFazio introduced H.R.4038, the Market Oversight Consolidation and OTC Derivatives Regulation Act on March 20, 2002, and the bill was referred to committee. The bill establishes the Securities and Derivatives Oversight Commission (SDOC) as an independent regulatory commission to assume the functions of CFTC, SEC and the Federal Reserve's Board of Governors with respect to margin requirements. By the terms of the bill, over-the-counter derivatives dealers and over-the-counter derivatives transactions would be subject to the jurisdiction of SDOC. The bill also establishes the Federal Financial Markets Coordinating Council to coordinate the regulatory operations of financial oversight agencies. The full text of H.R.4038 is available on the NEM Website.

SEC to Propose New Corporate Disclosure Rules

SEC announced it will propose changes to corporate disclosure rules. The proposed rules will: 1) require accelerated reporting of transactions by company insiders in company securities; 2) require accelerated filing of quarterly and annual reports; 3) increase the types of significant events for current disclosure on Form 8-K, such as changes in rating agency decisions and obligations that are not currently disclosed; 4) require web posting of Exchange Act reports simultaneous to filing with SEC; and 5) require disclosure of critical accounting policies. The full text of the Release on New Corporate Disclosure Rules is available on the NEM Website.

Order Issued in ComEd Delivery Services Proceeding

The Commission has issued an Order in the ComEd delivery services proceeding providing that: 1) an embedded cost methodology should be used for rate design and revenue requirements because such an approach sends economically-correct price signals; 2) single bill option and metering service provider credits should be set based on embedded costs as this ensures that customers pay only for costs that they incur; 3) ComEd's proposed 24-month minimum stay requirement for return to bundled service is consistent with state law and can be imposed by ComEd; and 4) the parties should enter into a workshop to develop a process to implement electronic signatures. The full text of the Order is available on the NEM Website.

Order Issued in Illinois Power Delivery Services Proceeding

The Commission has issued an Order in the Illinois Power delivery services proceeding providing that: 1) rate design and revenue requirements are to be based on embedded costs; 2) IP's proposed standby charge, that would bill a customer at triple the applicable charge for monthly demand in excess of the customer's standby capacity requirement, is rejected; 3) single bill option credits are to be set as follows: a) $0.439 and $1.133 for residential and non-residential electric only customers, respectively, if the supplier assumes responsibility for payment, b) $0.213 for residential and non-residential electric-only customers, respectively if the supplier does not assume responsibility for payment, and c) $0.226 and $0.920 for residential and non-residential combination customers, respectively, if the supplier assumes responsibility for payment; 4) the parties shall use a workshop to develop a process to implement electronic signatures; and 5) Staff shall host workshops to address the issue of splitting electric and gas bills and accounts. The full text of the Order is available on the NEM Website.

Order on Slamming and Cramming Rules

The Commission issued an Order clarifying the slamming and cramming rules. The Commission directed that the distribution utility has the burden of notifying the customer, the new supplier and the existing supplier of an actual switch date. The full text of the Order is available on the NEM Website.

New Jersey
Staff Proposal to Delay Customer Account Services Proceeding

Staff has a drafted a proposal to delay a new customer account services (CAS) proceeding. Staff believes that efforts should be focused this year on the design of Basic Generation Service and Basis Gas Supply Service for the post-transition period and the electric utilities rate proceedings. Staff recommends that the CAS proceeding be deferred until no later than May 15, 2003. This topic will be discussed on during Staff's biweekly supplier conference call on April 8, 2002, at 3PM. The full text of Staff's Proposal is available on the NEM Website.

New York
Order on Standby Rates

The Commission issued an Order responding to petitions for review of its standby rate guidelines. The Commission ordered that: 1) standby rates do apply when station power is self-supplied from a remote location; 2) when self-supplied energy is sent and returned from the same bus bar by an independent feed, as-used demand charges do not apply; 3) interconnection costs should be recovered by a utility through contractual arrangement; 4) all customers using delivery service should share the responsibility for stranded production costs in a proportionately equivalent manner; 5) different customer classifications may be established based on sufficient load data; and 6) direct assigned facilities costs should not be double-recovered. The full text of the Order is available on the NEM Website.

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