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November 14, 2003
NEM Winter Executive Committee Policy and Planning Meeting

The Winter Executive Committee Policy and Planning Meeting is scheduled for January 20th and 21st, 2004, in Houston, Texas. The meeting will be held at the Pennzoil North Tower, 700 Milam, 20th Floor, Room 20014 (Pennzoil Conference Tower) Houston, TX 77002. The Executive Committee will prioritize the states, issues, utilities and advocacy positions for NEM in 2004.

NEM's Annual Membership Meeting and National Restructuring Conference

Please register early for NEM's Annual Membership Meeting and National Restructuring Conference. It will be held on March 31 and April 1, 2004, in Washington, DC at the Capitol Hyatt. Energy Subcommittee Chairman Barton, Chairman Wood, Commissioner Brownell, CFTC Chair Newsome, CFTC Commissioner Brown-Hruska, NARUC President Wise, NJBPU President Fox, Illinois Chairman Hurley, Michigan Commissioner Chappelle, Ohio Commissioner Mason, Massachusetts Commissioner Keating and a number of other important speakers have already confirmed. If you wish to sponsor this event, please use this hotlink and contact headquarters. The exhibit space for this year is three times larger than last year's space, and Harts Magazine has offered to do a special section featuring our VIP sponsors. You may view the agenda and register for the event by using this hotlink. Registration Information is also available on the NEM Website.

NEM Holds Meeting on Advanced Energy and Advanced Power Line Technology Policies

NEM's Advanced Technology Policy Team addresses commingling the De Minimus use of power lines to (1) significantly upgrade grid reliability; (2)transmit "radio frequency energy" below FCC signal radiation emmission levels, (3) at speeds in excess of 3Gbps, with advanced energy related products and services (e.g. advanced metering, AMR, billing, back office and customer services, demand side management, DG, fuel cells, interactive residential load shifting technology, credit & risk management, indexes, clearing, financial services, and predictive settlement technology).

The NEM Advanced Technology Policy Committee convened a conference call to discuss FCC policies on Broadband over Power Lines (BPL), Power Line Communications (PLC) and Hybrid PLC commingled with energy-related products and services. Members who wish to meet with the FCC to discuss the legal, technical and policy issues relating to commingled energy, BPL, telecom and cable-related products should contact NEM headquarters immediately. A meeting will be scheduled during the first two weeks in December.

Many thanks to NEM's Advanced Technology Policy Team for excellent insights into this area of law, technology and public policy. A Discussion Draft is available to members upon request.

NYC Attempts to Impose Gross Receipts Tax on Out of State Sales of Natural Gas

NYC is attempting to impose Gross Receipts Taxes (GRT) on out of sales of natural gas contrary to Advisory Opinion No. Z950626B and Section 20-b of the NY Consolidated Laws which prohibit cities from "imposing a tax on any transaction originating or consumated outside of the territorial limits of the city. A conference call will be convened on November 26, 2003, at 12PM EST. The dial in number is 703-788-0600, and the pass code is 209353.

NEM Member Opportunity

NEM has space in several industry publications for member articles. NEM members interested in providing articles for publication should forward them to headquarters ASAP.

Senate Reviews Prohibition on Market Manipulation

Senator Cantwell introduced Amendment 2087 to H.R. 2673 to prohibit market manipulation. The Senate approved the amendment being considered as part of 2004 appropriations legislation. The language amends the Federal Power Act and provides that, "[i]t shall be unlawful for any person, directly or indirectly, to use or employ, in connection with the purchase or sale of electric energy or the purchase or sale of transmission services subject to the jurisdiction of the Commission, any manipulative or deceptive device or contrivance in contravention of such regulations as the Commission may promulgate as appropriate in the public interest or for the protection of electric ratepayers."

NEM Comments on NYISO Creditworthiness Compliance Filing

NEM submitted comments on NYISO's proposed 25 day advanced payment requirement. NEM urged that NYISO's requirement be modified to permit customers to promptly pay within 7 days of delivery, with three 3 days to cure a default. NEM argued this would reduce the NYISO’s exposure by 80%, from 50 days to 10 days for prompt paying customers. NEM also argued that requiring a minimum “A” rating from some customers, and only a BBB- for others is not competitively neutral and is prejudicial to smaller entities. The full text of NEM's Comments is available on the NEM Website.

Many thanks to Kyle Storie of Advantage Energy for his assistance on this issue.

FERC Adopts Market Behavior Rules

FERC has adopted market behavior rules applicable to sellers in gas and electric markets. The rules pertain to market manipulation, reporting and record retention. The electric rules also pertain to unit operations, communications and related tariffs. Sellers found to have engaged in prohibited conduct would be subject to disgorgement of unjust profits as well as non-monetary remedies such as revocation of market-based rate authority or blanket certificate authority. The full text of the Market Behavior Rules will be posted on the NEM Website when made available electronically.

Two Nominations For FERC Confirmed

The Senate confirmed two nominations to fill vacant seats at FERC. The nominations of Joe Kelliher, a senior advisor at the Energy Department, and Suedeen Kelly, former New Mexico state utility commissioner, were approved by voice votes. As a senior policy advisor to Energy Secretary Spencer Abraham, Kelliher in 2001 was the department's day-to-day point man with Vice President Dick Cheney's energy task force. He served as an aide to Abraham when he was a senator from Michigan. Kelly, a Democrat, is a former member of New Mexico's utility commission and served as its chair for two years. She currently teaches energy and utility law at the University of New Mexico and practices law in Albuquerque.

ComEd Wins Vote in Senate Committee on ICC Fast-Track Review Bill

On November 4, 2003, the Illinois Senate Environment and Energy Committee approved by a vote of 7-3 a bill that would approve a 5 percent to 6 percent rate hike to help Commonwealth Edison purchase Illionois Power. The rate hike would occur in two steps, in 2007 and 2009, and stay in place through 2010. Lt. Governor Patrick Quinn said it would be better for the legislature to separately decide the issues of the rate hike and the purchase of Illinois Power. The full text of the ComEd Bill is available on the NEM Website.

MichCon Rate Case

MichCon has filed a rate case for rates to be effective as of January 1, 2005. By the terms of its filing, MichCon seeks to implement a new transportation rate schedule XLT, increase sales and transportation rates, continue offering rate discounts to certain customers, alter storage capacity pricing, increase the maximum storage charge rate for third party storage service and institute a demand and commodity-based charge for third party transportation service. NEM will be intervening in this proceeding. Members interested in participating should contact headquarters ASAP. The full text of MichCon's Rate Filing is available on the NEM Website.

Many thanks to NEM member Jack Dempsey, Partner with the law firm of Dickenson and Wright for his help on this and all other cased in which NEM intervenes or monitors in Michigan.

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