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November 19, 2004
PPLSolutions Nominated to Executive Committee

NEM is pleased to announce that PPLSolutions has been nominated to the NEM Executive Committee. PPLSolutions, LLC was formed as a subsidiary of PPL Corporation, a Fortune 500 company, to provide front-, mid- and back-office services in the competitive retail energy market. PPLSolutions will be represented within NEM by Michael R. Toner, Vice President, Operations, Joseph P. Clifford, Director - Sales and Marketing, Thomas W. Lockner, New Market Manager, Dennis R. McGraw C.E.M., Manager Business Development, and Natalie A. Vega, Business Development Manager.

NEM's Annual Winter Policy Development Meeting - January 19 & 20, 2005

NEM's Winter Executive Planning and Policy Development Meeting for 2005 will be held on January 19-20, 2005. Because several members have expressed concern about making travel arrangements to Newport Beach, California, headquarters has looked into possible alternative locations. Constellation NewEnergy has agreed to host the meeting at their offices in Chicago, in order to provide members with a more central location. Headquarters would like to thank Katie Papadimitriu and Constellation for offering an alternative location. Many warm thanks, also, to Peter Weigand and Ian Carter of Commerce Energy Group for their gracious offer to host this event.

The Agenda will include NEM member priorities for States, Utilities, Issues and Positions for NEMís advocacy in 2005. Please use the following hotlinks to view NEM's Issues Lists for the following topics: wholesale issues, retail issues and technology issues.

Issues identified by members for consensus include Accelerated Migration Strategies, Consolidated Utility Billing, the Single Retailer Model; the proper timing and structure of retail auctions, and the formation of working groups to develop a national model for accelerated migration strategies.

Member recommendations will be sought on the formation of Nomination, Budget and Recruitment Committees as well as the identification and recruitment of Industry Leaders to serve on the NEM Board of Directors, the Retail Policy Council and the recruitment of selected utilities into the organization to work closely with members to develop a national model for accelerated migration in a equitable, expeditious and reliable manner that engenders consumer confidence and support.

The draft agenda for the event is available on the NEM web site. Please use this hotlink to sign up for the event.

NEM's Annual Restructuring Conference - April 26 & 27, 2005

NEM's Annual Spring Membership Meeting and Restructuring Conference will be held at the Marriott Metro Center on April 26-27, 2005. in Washington, DC. Please email or call headquarters if you wish to speak at or sponsor this event. Agenda items should also be sent to headquarters at your earliest convenience. FERC Chairman Patrick Wood, Commisioners Brownell, Kelly and Kelliher in addition to CA Deputy Secretary of Energy Joe Desmond and NYPSC Chairman William Flynn have already confirmed to speak, Governor Schwartzenegger and high-ranking Administration officials have also been invited.

Please use this hotlink to register for the event.

FERC to hold Technical Conference on Market-Based Rates Rulemaking Proceedings

FERC will hold a conference on December 7, 2004 to examine issues surrounding a rulemaking proceeding on market-based rates. The conference will examine issues such as transmission vertical market power and barriers to entry in electric markets. The Commission will also explore the pro forma open access transmission tariff, especially whether it mitigates transmission market power, and other proposals to mitigate market power and barriers to entry. FERC will also hold a two-day conference in January 2005 to discuss additional issues such as affiliate abuse/reciprocal dealing as well as generation market power. The full text of the Notice is available on the NEM web site.

FERC Clarifies Credit Policy for Transmission Providers and ISOs/RTOs

The Commission's Policy Statement on Credit Policy encourages OATT transmission providers, ISOs and RTOs to undertake three actions: 1) to increase the transparency of their credit-related procedures, 2) to publish credit analysis procedures on their web sites, and 3) to explain to customers, in written format, how these procedures are applied to them. FERC also clarified that both quantitative and qualitative factors should be considered when assesing credit risk and listed actions, such as shortening settlement periods, that could reduce the impact of a default by a market participant. The full text of the Press Release is available on the NEM web site.

Commission Approves Pricing Structure Between PJM and MISO

FERC recently approved a pricing structure for PJM and MISO that would eliminate multiple transmission rate "pancaking" and become effective December 1, 2004. The Commission conditionally accepted the "license plate" rate design, which will be in use for an initial fixed period ending January 31, 2008, at which point the license plate rate design will be re-evaluated. Likewise, to counter a possible abrupt cost shift when the rate design goes into effect, the Commission adopted the Seams Elimination Charge/Cost Adjustments/Assignments (SECA) to be in effect from December 1, 2004 - March 31, 2006. The full text of the Press Release is available on the NEM web site.

FERC Approves 10 Indices to be Used as Part of Commission-Approved Tariffs

In its order, the Commission approved the indices of 10 publishers found to fully or substantially meet the standards outlined in the July 2003 Policy Statement for publishing price indices. Provided that they meet a minimum average criteria for the volume or number of transactions, the hourly, day-ahead, weekly and month-ahead indices published by these developers may be used in jurisdictional tariffs. The full text of the Press Release is available on the NEM web site.

Commission Issues Winter Market Report

In its Winter Assessment, FERC concluded that the market is behaving in the same manner as other commodity markets under tight conditions. The report came to four major conclusions. First, prices are being driven by concerns about production, despite record storage levels. Some studies show a decrease in production and the most optimistic show this year's production flat with that of last year's. Second, supply and demand conditions are a greater obstacle than any speculative futures trading. According to the Commission, trading has probably had some effect on price volatility, but there is no evidence it has affected sustained price levels. Third, the Commission predicted possible congestion in Northeast infrastructure with severe cold. PJM's expansion as well as the new market software in NYISO should help with this, but has not been proven yet. Finally, the Commission held that higher gas, oil and coal fuel prices will likely lead to an increase in power prices nationally. The full text of the Report is available on the NEM web site.

Click here to view all past updates.
NEM Analysis of Electric Settlement Provisions

NEM has compiled a detailed analysis of electric settlement provisions. NEM provides analysis of PG&E, Southern California Edison (SCE), Sierra Pacific, PacifiCorp and San Diego Gas and Electric electric tariffs. Copies of the analyses are available from NEM Headquarters upon request. The analyses are also posted on the NEM web site, but are available for members only.

Click here to view all past updates.
NEM Analysis of Gas and Electric Settlement Provisions

NEM has compiled a detailed analysis of electric settlement provisions. NEM provides analysis of Consumers Energy and DTE electric tariffs. Likewise, NEM provides analysis of Consumers Energy, Michigan Gas Company and SEMCO gas tariffs. Copies of the analyses are available from NEM Headquarters upon request. The analyses are also posted on the NEM web site, but are available for members only.

New Jersey
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BGS Auction Bidder Information Session

A half-day information session will be held on December 3, 2004 in Philadelphia. The session will cover the following topics: 1) summary of the Board decision and of modifications to the EDCs' proposal, 2) information regarding the CIEP/FP line, 3) overview of the BGS-FP and BGS-CIEP Auctions, and 4) detailed description of the application process. Registration is required and space is limited. Please use this hotlink to register.

New York
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Commission Rolls out Energy Supplier Comparison Charts

The Commission's Power to Choose site includes charts comparing ESCO and utility offerings, arranged by utility service territory as well as questions to consider when shopping for a supplier. The charts allow customers to compare utility and ESCO service by providing information such as estimated monthly bill, term and cancellation notice/fee. Valued added services are also listed. To view the Power to Choose Comparison charts, please click here.

Commission to Hold Standby Rates Workshop

The workshop, also hosted by NYSERDA, is designed for ESCOs, utilities, distributed generation developers and equipment manufacturers and will take place on December 8, 2004. The morning session will feature discussion as well as a question and answer period on electric standby rates and interconnection and exemption issues. The afternoon session will follow the same format and discuss DG targeted gas transportation rates and the National Fuel Gas Pilot. Please e-mail Anne Dalton ( if attending. The agenda for the workshop is available on the NEM web site.

Commission Approves Revisions to Standardized Interconnection Requirements

In its order, the Commission approved most of the recommended revisions to standardized interconnection requirements for distributed generation units of 300 kVA or less operating in parallel with the radial distribution systems of the electric utilities. In terms of the application process, the Commission approved a requirement that the general operating constraints be provided. Likewise, the Commission will require the location and arrangement of utility metering equipment be included on applicant's drawings. The Commission also adopted a 30-day review period for systems under 300 kW and a 60-day period for systems greater than 300 kW. For equipment certification procedures, the Commission adopted Underwriter's Laboratories Standard 1741 as the appropriate testing protocol. The Commission also approved a revision that linked the definition of "required operating range" to the UL 1741 protocol as well. The full text of the Order is available on the NEM web site.

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NEM Intervenes in Dominion East Ohio Gas Case

DEO filed an application to increase its GCR rate from $8.793/Mcf to $9.984/Mcf. NEM requests that the Commission approve DEO's application because the increase will provide customers with accurate pricing signals and is consistent with maintaining competitive market conditions. The City of Cleveland opposes DEO's application, claiming that it would harm customers participating in the local gas aggregation program and that price volatility indicates the GCR ought not be revised. NEM responded that utilities will recoup any underrecovery and that any benefit to consumers will be short-term and a mere postponement of price impacts that will distort the GCR on a go-forward basis. The full text of NEM's Motion to Intervene, as well as DEO's application and the City of Cleveland's motion is available on the NEM web site.

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Legislaure Passes Alternative Energy Portfolio Standards Act

On November 20, 2004, both the House and Senate passed a bill requiring, for the next 15 years, 1.5% of electric energy sold to be from Tier I alternative energy sources. Tier I resources include, but are not limited to: solar energy, wind power, fuel cells and boimass energy. The percentage of energy required to come from Tier II resources increases every four years: 4.2% (years 1-4), 6.2% (years 5-9), 8.2 (years 10-14) and 10.0% (years 15 and beyond). Tier II resources include, but are not limited to: waste coal, demand side management, municipal solid waste and large-scale hydropower. These requirements will not apply to electric distribution companies that have not reached the end of their cost-recovery periods. Those companies not meeting their Tier I and Tier II requirements will be subject to Alternative Compliance Payments in the amount of $45 times the number of additional alternative energy credits needed for compliance. The full text of the bill is available on the NEM web site.

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