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November 18, 2016
NEM Executive Committee Meeting

NEM’s Annual Winter Executive Committee Meeting will be held at the Hyatt Regency Hotel in Orlando, Florida on January 16-18, 2017. The Winter Executive Committee Meeting is where the members identify and prioritize the issues, states, and utility markets of greatest import for NEM advocacy efforts in 2017. Please register for the meeting at this link.

Reserve your hotel room at Hyatt Regency Orlando at the NEM Rate of $229 using this link.

A golf tournament will be held on Monday, January 16, 2017, at noon at the Hyatt Grand Cypress. The golf tournament fee of $150.00 includes golf, shuttle service, lunch, and a NEM golf shirt. Make your reservation by calling NEM headquarters (202) 333-3288. Please remember to provide your golf shirt size by December 31st.

A welcome reception and dinner for all members and their families will be held at the Hyatt Regency Orlando, on Monday, January 16, 2017, from 6pm–8pm in the Orchid Room.

Order 831, Offer Caps in RTOs/ISOs

At yesterday's agenda meeting, FERC adopted Order 831 on offer caps in RTOs/ISOs. The Order requires that each RTO/ISO: "(1) cap each resource’s incremental energy offer at the higher of $1,000/megawatt-hour (MWh) or that resource’s verified cost-based incremental energy offer; and (2) cap verified cost-based incremental energy offers at $2,000/MWh when calculating locational marginal prices (LMP) (hard cap)." FERC also clarified that, "the verification process for cost-based incremental offers above $1,000/MWh should ensure that a resource’s cost-based incremental energy offer reasonably reflects that resource’s actual or expected costs." The change was premised on a finding that the RTO/ISO current offer caps on incremental energy offers are not just and reasonable. The decision was also premised on the Commission's price formation goals. For instance, LMPs will be more likely to reflect the true marginal cost of production when resources’ short-run marginal costs exceed $1,000/MWh, and also, to give resources the opportunity to recover their short-run marginal costs, which will encourage resources to participate in RTO/ISO energy markets. The full text of Order 831 is available on the NEM Website.

FERC Office of Enforcement 2016 Report and White Papers on Market Manipulation

FERC's Office of Enforcement issued its 10th Annual Report. The Report details that:

"* Investigations staff opened 17 new investigations while closing 11 pending investigations either with no action or through a Commission-approved settlement. Staff negotiated settlements for almost $12.25 million in civil penalties and disgorgement of nearly $5.7 million in unjust profits. These settlements also included provisions requiring the subjects to enhance their compliance programs and periodically report back to Enforcement regarding the results of those compliance enhancements. Since 2007, the total payable, non-pending civil penalties assessed by the Commission amounts to approximately $641 million, and the total disgorgements amount to slightly over $401 million.
* Audits and accounting staff reviewed the conduct of regulated entities through 14 audits of oil pipeline, public utility and natural gas companies, resulting in 214 recommendations for corrective action and directing refunds and recoveries totaling $5.3 million.
* Analytics and surveillance staff worked on more than 40 investigations and reviewed numerous instances of potential misconduct, with some reviews resulting in referrals to Investigations."

Concurrent with issuance of the 2016 Enforcement Report, Staff also released two white papers on its views and emerging trends related to manipulation of the FERC jurisdictional markets. The White Paper on Effective Energy Trading Compliance Practices is intended to provide industry guidance on how to prevent and detect market manipulation and other violations. The White Paper on Anti-Market Manipulation Enforcement Efforts Ten Years After EPAct summarizes FERC and federal court caselaw regarding development of the Commission’s anti-manipulation doctrine and factors Staff considers in deciding whether or not to pursue allegations of manipulation.

The full texts of the 2016 Annual Report, White Paper on Effective Energy Trading Compliance Practices, and White Paper on Anti-Market Manipulation Enforcement Efforts Ten Years After EPAct are available on the NEM Website.

New York
Click here to view all past updates.
Clean Energy Standard Order on NYSERDA Cost Recovery, Standardized REC and ZEC Agreements and Backstop Principles

The Commission issued an Order in the Clean Energy Standard proceeding on a petition filed by NYSERDA for approval of cost recovery for program administration fees, standardized agreements to govern REC and ZEC transactions between NYSERDA and Load Serving Entities (LSEs), and a backstop financial mechanism for REC and ZEC generator payments. Of particular importance, the Commission directed LSEs to provide NYSERDA with executed copies of the standardized REC and ZEC agreements no later than 30 days from the date of issuance of the Order.

The Commission approved the following:
1- a ZEC adder for the recovery of ZEC administrative costs;
2- other REC and ZEC administrative costs to be recovered by NYSERDA from existing fund balances;
3- the form and content of standard ZEC and REC agreements to govern REC and ZEC transactions between NYSERDA and the LSEs;
4- principles for a customer-funded financial backstop guarantee mechanism for payments to REC and ZEC generators; and
5- electric utilities shall collaborate with NYSERDA and Staff to develop an implementation process to effectuate the backstop mechanism.

The full text of the Order is available on the NEM Website.

ConEd Petition for Low Income Customer Shared Solar Pilot Program

ConEd filed a petition with the Commission for approval of a pilot program to provide shared solar (community distributed generation (CDG)) to its electric low income customers. ConEd asserts, "[t]his customer segment has been underserved by the marketplace for clean energy products for a variety of reasons, including the financial limitations of customers," and that, "[t]o date, to the Company's knowledge, no CDG offerings have been provided to the low-income customer segment in the Con Edison's service territory." ConEd argues that the program would provide for, "lower costs of solar built under a 'Universal Renewables' model; the utility's ability to work effectively with its low-income customers, community groups, and other interested stakeholders; the development of solar generation on Company-owned roof space and other Company-owned locations for the benefit of customers; and the ability to efficiently apply solar credits to the customer's bill."

ConEd proposes that the pilot begin with a competitive procurement for 3MW of solar generation to serve 800 to 1600 low income customers. If supported by customer response, ConEd proposes that the program be expanded to an additional 8MW of solar generation. The total 11MW would cost an estimated $33 million.

ConEd estimates participating customers would save up to 7% of their monthly bill. Participating customers would receive solar bill credits that, "will only be positive or zero so participating customers' electric bills will not be higher than if they did not participate in the Program."

The full text of ConEd's Pilot Program Proposal is available on the NEM Website.

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