May 4, 2001


 NEM Summer Policy Development Meeting

NEM Executive Committee members are reminded that the summer policy development meeting will be held June 28-29, 2001, at the Hotel Boulderado in Boulder, Colorado. Please call 1-800-433-4344 for our special rate. Rooms at the Historic Boulderado are very limited. Agenda items will include NEM's strategy for summer shortages, the development of National Guidelines Distributed Generation/Self Generation, Interconnection and Back-up Power Policies, strategies for Utility offerings of long term fixed prices, competitive services by tariff, and the next steps on National Energy Technology Policy development and implementation. Please also send headquarters your nominations for next year's Regional, State and National Policy Chairs and Co-Chairs.

 NEM Executive Committee Conference Call

The Executive Committee conference call has been rescheduled for May 7, 2001, at 11AM EST. The purpose of the call is to discuss organizational issues, an agenda for the June 28-29, 2001, Executive Committee meeting, future leadership of the Executive Committee and Regional Policy Chairs. The conference call number is 303-248-1820 and the passcode is 428358.

 Member Opportunity

The North Dakota PSC issued an RFP for the conduct of telephone surveys to evaluate utility bill format and content. Bids must be received by May 10, 2001, at 5PM.

Federal Issues

 Subcommittee Hearings on Electricity Emergency Relief Act

The House Subcommittee on Energy and Air Quality held hearings this week on Congressman Barton's Electricity Emergency Relief Act. The bill includes provisions directing FERC to: 1) establish a clearinghouse for agreements between wholesale sellers and wholesale buyers willing to forego purchases they are entitled to buy under contract, and providing that compensation for foregone purchases meets Federal Power Act requirements; 2) implement a program providing incentives for retail customers in the Western Systems Coordinating Council to conserve and sell saved energy at market prices; and 3) establish a Western RTO upon petition of at least ten states in the Western Systems Coordinating Council. The bill also permits expansion of the Western Area Power Administration's transmission system, temporarily waives certain environmental constraints to increase generation including generation for private use, authorizes electric power transmission corridors across Federal Lands, and prohibits any mandated sale of electric energy or natural gas unless payment is ensured.

FERC Commissioners testifying generally supported the bill. However, Commissioner Massey urged Congress to immediately authorize price mitigation for the entire Western Interconnection, citing for example his proposed generator specific cap. The full text of the Draft Bill, and the testimony of Chairman Hebert, Commissioner Massey and Commissioner Breathitt, are available on the NEM Website.

 Senate Report Forecasts Rising Energy Prices and Calls for Increased Supply

Senator Schumer, a member of the Energy and Natural Resources Committee, and Senator Collins, released a report projecting that by 2010 wholesale natural gas prices will rise by 271% to $19.75/mcf while demand will increase 24%, and demand for electricity will increase by 22% with at least 700 new power plants needed. Their recommendations for reducing demand and increasing supply include: 1) using demand management techniques such as real-time pricing; 2) increasing incentives for investment in fuel efficiency and related technologies; 3) using new superconducting technology to increase electricity transmission capacity; 4) streamlining the siting process and promoting federal-state-local coordination to create greater supply infrastructure; and 5) reducing the backlog of applications for approved development rights on federal lands and building a new natural gas pipeline from Alaska. The full text of the Schumer-Collins Report is available on the NEM Website.

 Public Utility Holding Company Act (PUHCA) of 2001

The Senate Banking Committee approved Senate Bill 206 that would repeal the Public Utility Holding Company Act. The bill eliminates diversification restraints for private utilities and transfers jurisdiction over electric and natural gas holding companies to FERC. The full text of S.206 is available on the NEM Website.


 Commission Approves NYISO Hybrid Fixed Block Pricing Rule

The Commission approved NYISO's proposal to implement a hybrid fixed block pricing rule effective May 1, 2001. Fixed block units operate in two states: completely off or running at maximum capacity. When fixed block units must be run to meet load requirements, to avoid the operation of higher cost units or to satisfy reliability requirements, the fixed block units can set real-time locational based marginal prices (LBMPs). However, all day-ahead LBMPs, and real-time LBMPs when fixed block units are operating but are not actually required to meet load, are to be set at the bid of a less expensive generation resource that was backed-down to accommodate a more expensive fixed block unit. The full text of the Order is available on the NEM Website.

State Issues

New York

 NYSEG Trade Secret Ruling and Retail Access Credit

The Commission ruled that to protect ratepayers, NYSEG's annual projections of purchased power market prices and annual forecasts of purchased power quantities, will not be discoverable, but NYSEG's annual projected fuel expenses and earnings forecasts are subject to disclosure. The full text of the Ruling is available on the NEM Website.

As ordered by the Commission, a meeting will be held on May 10, 2001 at 10:30AM at the Commission's Albany offices to discuss the computation of NYSEG's market-based retail access credit.

 Utility Comments on Distributed Generation

The utilities have filed comments arguing that the recommendations of the non-utility parties on the benefits of distributed generation are speculative. The utilities argue that the proceeding should be limited to the consideration of the proposed RFP process by which the utilities would consider proposals for distributed generation in lieu of otherwise needed distribution system upgrades. The full text of the Utilities' Comments is available on the NEM Website.

 Unbundling Proceeding Revised Procedural Schedule

The following revised procedural schedule has been set in the unbundling proceeding: May 10, 2001- compilers issue summary of questions and issues received; May 15, 2001 - active parties submit comments on summaries; May 18, 2001 - compilers circulate revised summaries; May 25, 2001 - prehearing conference; May 31 and June 6, 2001 - technical conferences to substantively examine issues; July 17, 2001 - initial comments due; and July 30, 2001 - reply comments due. NEM comments on these issues are hotlinked here.


 Draft Competitive Metering Report

A draft competitive metering report has been prepared with two different implementation recommendations. One approach requires the full unbundling and offering of competitive metering functions on a phased in basis beginning on January 1, 2002, for commercial and industrial customers and for residential customers when benchmarks of market penetration are achieved. The second approach focuses on the provision of meter information on a near real-time, on-command basis and would allow large customers or third party ownership of the meter. The full text of the Report is available on the NEM Website.


 Proposed Revised Retail Access Rules

Staff filed proposed revised retail access rules that: clarify that competitive energy services include services provided by aggregators for retail customers; provide that enrollment requests should be submitted to local distribution companies (LDCs) at least 15 days prior to the next scheduled meter read date; clarify how "price to compare" information should be presented on bills; and direct LDCs to accommodate rate ready billing protocols. The full text of the Proposed Revised Rules (clean version) and Proposed Revised Rules (redlined version) are available on the NEM Website.

 Virginia Power Retail Access Program Report

Virginia Power has filed a report on its retail access program detailing compliance with rules on acknowledgement of Competitive Service Providers (CSPs) notice of termination of service, notification to customers of CSP service termination, notification to customers of CSP enrollments, and notification to CSPs of customer cancellations. The full text of the Report is available from NEM headquarters.


 PG&E OFO Report

PG&E filed a report on OFO events for the first quarter of 2001. Due to confidentiality concerns, NEM members that want to review the Report should contact headquarters.

Other Issues

 CUBR Conference Call on UBP Proposals

A CUBR conference call will be held on May 9, 2001, at 4PM EST to discuss the statement of work for the independent UBP proposal as well as the UBP electronic transaction efforts. Members interested in participating should contact NEM headquarters.