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March 28, 2002
Amerex Elected to NEM's Executive Committee

NEM is pleased to announce that Amerex has been elected to the Executive Committee. Amerex is a leading over-the-counter commodity brokerage, providing voice and electronic brokerage services to the energy and other related markets. Amerex will be represented within NEM by Steven W. Town, Co-CEO of the Amerex group of North American Companies and Michael Prokop, CIO of the Amerex group of North American companies. Steve Town can be reached at 281-340-5201 or Mike Prokop can be reached at 281-340-5290 or

NEM Master Margin and Netting Agreement Taskforce

NEM held its first meeting on the drafting of a Master Margin and Netting Agreement. It is anticipated that NEM and EEI will collaborate on this effort. 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 10 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.

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 1, 2002.

NEM Meeting with Chairman Wood Postponed

NEM's meeting with Chairman Wood that had been scheduled for May 1, 2002, has been postponed. In the midst of all of the initiatives currently pending at the Commission, Chairman Wood has requested that the meeting be postponed until the fall. The pre-meeting conference call scheduled for April 16, 2002, will be rescheduled as well.

NEM Comments on FTC's Telemarketing Sales Rule

NEM submitted comments on FTC's Telemarketing Sales Rule rulemaking arguing that at this stage in the development of competitive energy markets, it is imperative that unnecessarily restrictive measures do not increase the cost of U.S. energy supplies and do not impede consumers' ability to understand their energy choices or to exercise choice. NEM submitted that the national Do-Not-Call registry and possible prohibition of utilities providing competitive suppliers access to customer lists could have such an effect without yielding an appreciable increase in consumer protection. NEM urged that energy consumer enrollment should be a matter of state and local jurisdiction and will be appropriate until the country has implemented national uniform rules, including electronic signature rules, that permit the aggregation of large groups of customers across the country. NEM also urged that competitive suppliers use of customer lists continue to be permitted. NEM recommended that the transaction authorization and recordkeeping requirements of the Rule follow the requirements of the energy industry UBP to avoid the imposition of duplicative and costly burdens on energy consumers as well as competitive energy supplies. The full text of NEM's Comments is available on the NEM Website.

NEM Comments on FERC's Standardized Transmission Service and Wholesale Electric Market Design Working Paper

NEM submitted comments supporting the direction the Commission charted in the "Standardized Transmission Service and Wholesale Electric Market Design" Working Paper. NEM supported FERC's proposals with respect to network access service that provide both pricing and scheduling flexibility and the requirement that transmission rights holders must sell unscheduled transmission rights. NEM also supported the inclusion of demand response measures, independent MMUs, the use of modular software systems and both standardized data formats and transfer protocols in standard market design. NEM urged the Commission not to include the proposed limits on bidding flexibility and bid caps. NEM also recommended that the Commission clarify the embedded cost components associated with the Network Access Charge and the assignment of transmission rights as well as the effect of the RTO regional planning process on market participants. The full text of NEM's Comments is available on the NEM Website.

Commission Decision on Direct Access Suspension Date

The Commission issued a Decision affirming September 20, 2001, as the date for suspension of direct access. The Commission reasoned that the state is better served by maintaining the September 20, 2001, suspension date and imposing a direct access surcharge or exit fee to recover Department of Water Resources costs from direct access customers. The issues concerning direct access surcharges or exit fees are to be decided in a separate proceeding. The Commission also decided that customers who signed a direct access contract as of September 20, 2001, can renew the contract, enter into a new contract with a different ESP for the same load, or can switch ESPs via assignment or other permissible mechanisms. The full text of the Decision is available on the NEM Website.

Standard Offer Service Briefs

NEM and others submitted reply briefs on standard offer service. NEM opposed Staff's argument that because utilities control the wires they will have an unending obligation to supply commodity. NEM argued that the fact of utility ownership of wires only indicates that utilities will have a continuing obligation to deliver. NEM also opposed Staff's argument that the utilities must always offer a form of standard offer service, specifically provider of last resort service to customers that cannot arrange for competitive supply. NEM asserted that Staff's position was not supported the restructuring law. The full text of NEM's Reply Brief is available on the NEM Website.

Staff argued that the Commission can extend the electric companiesí obligation to provide SOS to residential and small commercial customers only as long as it can reasonably find that the electricity market is not competitive or that no acceptable competitive bid has been received. Staff said that for a variety of reasons the electric companies are likely to be required to provide some form of POLR service. The full text of Staff's Reply Brief is available on the NEM Website.

The Office of Peoples Counsel (OPC) argued that the statute requires that the Commission establish procedures for the competitive selection of a retail provider of SOS, but the Commission is not prohibited from including provisions that would allow the electric company to obtain wholesale bids to procure electricity in order to continue as an SOS provider. The full text of the OPC's Reply Brief is available on the NEM Website.

New York
Comments on ConEd Phase 5 Filing

NEM filed comments on ConEd's Phase 5 filing urging the Commission to reject ConEd's proposed reduction in the retail access credits as well as ConEd's proposed contract assignability requirement. NEM argued that the proposed reduction in the retail access credits should be rejected because ConEd failed to make a showing that it could not avoid costs associated with the Phase 4 credits and did not justify a reduction for Phase 5. NEM also argued that a reduction would further misalign ConEd's credits with those in effect in other utility service territories. NEM argued that at a minimum, the level of ConEd's Phase 4 credits should be allowed to remain in effect for the short period until embedded-cost based unbundled rates are implemented. NEM also urged the Commission to reject ConEd's proposed contract assignability requirement as an impermissible intrusion in ESCOs' ability to transact business. The full text of NEM's Comments is available on the NEM Website.

The Attorney General urged that the Commission should maintain the retail access credits at their current levels and should modify ConEd's assignment proposal to ensure that ESCO customers are notified of pending assignments and that customers consent is obtained. The full text of the Attorney General's Comments is available on the NEM Website.

Order on Demand Response Programs

The Commission ordered the utilities to develop awareness and education plans regarding demand reduction and curtailment of energy for implementation by May 1, 2002. The utilities must also develop specific marketing plans for C&I customers to include identified best practices. The Commission also directed the utilities to cooperate with ESCOs and curtailment service providers in getting small customers to participate in the NYISO's statewide aggregation pilot for summer 2002 for the Emergency Demand Response Program and the Day Ahead Demand Response Program. The full text of the Order is available on the NEM Website.

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