September 1, 2000

Announcements

 Invitations to Industry Leaders.

If you would like an industry leader, regulator or policymaker to receive a special engraved invitation to participate in NEM's Leadership Roundtable and Golf Tournament in the Woodlands on October 30 and 31, please send the names and addresses to headquarters at your earliest convenience.

 NEM-EIA Conference Call Requires Your Participation

 EIA has agreed to discuss its Proposal to require marketers and billers to file a new form on Thursday, September 7, 2000 at 11:00 AM EST. NEM Draft Comments on the form are hotlinked here for your review. Please join the Internet Policy Conference Call on Tuesday September 5 at 11AM EST to help finalize these comments and prepare for the NEM-EIA call. Please dial into 303-248-1820. The Passcode is 428358. The full text of the Notice Requesting Comments and a copy of the Proposed Monthly Natural Gas Biller Survey are available on the NEM Website.

 Senior Level Executive Opportunity

Executive recruiting firms seeking senior level executives in the industry continually approach NEM for referrals. This week, NEM received an inquiry about a CFO position with an independent power producer. Please contact headquarters if you are interested in being referred for this or other positions.

Federal Issues

FERC

 Requests for Rehearing of NYISO Temporary Bid Cap Order

The NYISO, PPL EnergyPlus, Independent Power Producers of New York, Orion Power, the Southern Parties, and AES NY have petitioned for rehearing of the Commission's Order that directed the NYISO to impose a $1,000 temporary bid cap on its energy markets. The NYISO has requested the Commission to modify its directive for a fixed block-pricing rule and permit the NYISO to implement a hybrid-pricing rule. Under the hybrid pricing rule, the NYISO would apply its current pricing rule to calculate real-time prices when a fixed block unit must run to meet load, avoid the operation of a more expensive unit, or satisfy a NERC reserve requirement and consequently displace a less expensive unit. In all other circumstances, the NYISO proposes to follow the Commission's pricing rule. The full text of the NYISO's Petition for Rehearing is available from NEM headquarters.

 Morgan Stanley Capital Group (MSCG) Requests Postponement of NYISO Auction

MSCG has requested the Commission temporarily postpone the NYISO's auction of two and five year Transmission Congestion Contracts (TCCs) until the software and market flaws in the NYISO model are corrected. MSCG also argues that beginning September 1, 2000, the NYISO should only be allowed to auction the TCCs limited to terms of six months or less. The full text of MSCG's Request for Postponement is available from NEM headquarters.

 

State Issues

New York

 Five Months of Firm Primary Point Capacity Required

The NYPSC has ordered that marketers serving firm customers continue to have firm primary point capacity for the months of November through March. The Order also provides that:

  • LDCs may require a marketer to provide an affidavit certifying that it has firm primary point capacity for November through March and stating that the marketer will maintain availability of that capacity to serve New York. The affidavit must show contract number, pipeline, contract duration and maximum daily quantity. LDCs may also require marketers to show a redacted copy of its underlying contract.

  • There is a limited exception to apply to KeySpan Companies allowing marketers to meet the primary firm capacity requirements through three different methods: primary firm capacity purchased from KeySpan Companies at market rates, firm primary point capacity purchased from the KeySpan Companies at FERC tariff rates, and firm secondary capacity.

  • Protocols for implementing the capacity requirement are to be included in each LDCs Procedures Manual.

  • LDCs are required to identify liquid trading points from which marketers must have firm primary point capacity.

The full text of the Order Revising Pipeline Capacity Requirements for Marketers is available on the NEM Website.

 Order Approving NYSERDA'S Petition to Reallocate System Benefits Charge (SBC)

The Commission approved NYSERDA's Petition requesting permission to reallocate $4.6 million in SBC energy efficiency monies to the SBC's R&D and low-income program categories. The full text of the Staff's Recommendation is available on the NEM Website.

 PUC Establishes Information Access Procedures for NYSEG

The PUC established procedures to ensure access to information from NYSEG. NYSEG must implement electronic access to accounting information within 30 days, and must implement new procedures for filing financial statements within 15 business days at the end of September 2000. In addition, NYSEG must maintain confidential information, and must transfer that information to the custody of a Records Access Officer. The full text of the Order Establishing Information Access Procedures is available on the NEM Website.

 NYISO Transmission Congestion Contract (TCC) Auction Guidelines

The NYISO has released "Rules, Procedures and Guidelines for the Initial Auction of TCCs - Autumn 2000" to govern auctions of TCCs to be conducted by the NYISO from August 22, 2000 to November 10, 2000. The full text of the TCC Auction Guidelines is available on the NEM Website.

 NYISO Issues Wholesale Electric Market Report

The NYISO has issued the first weekly report to display the average wholesale electricity prices for energy traded in the NYISO's day-ahead market in each of New York's eleven zones. The full text of the Wholesale Electric Market Report is available on the NEM Website.

 NYISO Revised Rebill and True-Up Schedule

The NYISO has released the latest schedule for the rebilling of the billing months of November 1999 through June 2000 and the subsequent billing quality metering true-ups. The full text of the Revised Rebill & True-up Schedule is available on the NEM Website.

 NYSEG Back-Out Proceeding

A NYSEG settlement meeting was held in which NYSEG offered a $2.5 million marketer incentive proposal. (Please contact NEM headquarters for details.)

The customers eligible for the plan were current bundled sales customers and farm and food processors. The program was to start September 5, 2000, and end December 31, 2000. The program would also end if any changes to the RAC occur within the duration of the offer. The supplier payment was to be paid monthly.

After presentation of the proposal, NYSEG asked marketers to caucus and reach consensus on acceptance or modification of the offer. Consensus was difficult. In summary, the majority of marketers did not want to sacrifice the drive for market based pricing for a short-term incentive. Marketers supported the NEM stance on back-out credits, namely, back-out credits should reflect market prices plus retailing costs and supply costs. NYSEG refused to consider this point in formulating another proposal. It is NEM's thought that this proceeding may be our best chance to make a real change.

NYSEG refused to consider marketer issues.

Many thanks to Angelo Chambrone of Niagara Mohawk Energy Marketing for attending this meeting on behalf of NEM and providing this summary.

 Multiple Intervenors Serves Interrogatories on NYSEG in Back-Out Rate Proceeding

Multiple Intervenors has served interrogatories on NYSEG in the back-out rate proceeding requesting information on load served by alternate suppliers, information about NYSEG's marketing affiliate, energy prices, sales and delivery, and financial filing information.

 

New Jersey

NEM to Lead Opposition to Supplier Fees in New Jersey

NEM strongly opposes both existing and proposed increased supplier fees in New Jersey. NEM is looking to lead and fund the industry advocacy efforts against the fees and requests non-members to join us to support the effort. Expert witnesses are being interviewed, a budget is being prepared and initial analysis suggests that even the current $25 per megawatt fee could represent a confiscatory tax on marketer profits in a nascent New Jersey electric market. If you are interested in joining or supporting NEM's efforts in New Jersey, please contact Headquarters at (202) 333-3288 as soon as possible.

 Rockland Electric (RECO) Filing in Supplier Fee Proceeding

RECO proposes to continue to include its general administrative fee of $25 per MW of capacity obligation per month in its TPS Agreement for another year. RECO maintains it will file with the Board on August 1, 2001, to review this fee structure. At that time, RECO may adjust its fee structure, and other parties may reserve their rights to intervene. The full text of RECO's Filing is available on the NEM Website.

Pennsylvania

 Pennsylvania Provider of Last Resort/Supplier of Last Resort Working Group Meetings

The first PA POLR meeting took place on August 31, 2000, and participants began issue identification lists for the Working Groups to address. The initial list included: development of the common definition of provider of last resort, selection process, consumer eligibility, services to be included, consumer education, and SOLR/POLR functions. Staff will develop a final issue list and circulate guidelines for the progression of the proceeding. A conference call will be scheduled to coordinate NEM members' participation and approach in this proceeding. The full text of the Agenda of the Working Groups' first meeting is available on the NEM Website.

Texas

 Utilities File Business Separation Plans and Unbundling Applications

The following utility filings are available free of charge to NEM members on CD-Rom from NEM headquarters (these files are too large to be uploaded to the NEM Website).

  • Business Separation Plan of TXU;

  • Business Separation Plan of CP&L;

  • Unbundling Application of TXU;

  • Unbundling Application of CP&L; and

  • Unbundling Application of Reliant Energy.

Many thanks to George Phillips of MidAmerican Energy for providing these filings to NEM.

Ohio

 FirstEnergy Files Proposed Compliance Tariffs

FirstEnergy has filed compliance tariffs for Commission approval. The following compliance tariffs are available on the NEM Website:

The full text of the Proposed CEI Electric Service Tariff to be effective January 1, 2003 will be posted on the NEM Website when made available electronically.

 

Maryland

 Pepco Issues Fourteenth EDI Status Report

Batch Four testing, the first sequence testing both enrollment and billing concurrently, began on August 21st, 2000, as scheduled. As of August 22, 2000, Pepco processed production enrollment transactions from three licensed Suppliers, having received and processed 65 accounts. Pepco sent usage data transactions to each Supplier. The next Pepco status report is due September 7, 2000. The full text of Pepco's report is available from NEM headquarters.

 

Virginia

 Commission Approves Terms and Conditions of Virginia Power Pilot Program

The Commission has approved the Terms and Conditions of Virginia Power's Pilot Program. However, the Commission stated that the Competitive Service Provider and Trading Partner Agreements submitted by Virginia Power would be evaluated prior to the end of the Pilot Program to determine whether the Agreements are appropriate for full-scale retail choice. The full text of the Order Approving the Terms and Conditions of Virginia Power's Pilot Program is available on the NEM Website.

 Consumer Counsel Comments in Metering and Billing Proceeding

The Consumer Counsel supports the draft competitive metering and billing plan with the following provisos:

  • The Plan should include provisions for a consumer education program to provide specific information about metering and billing services.

  • The Plan should recommend developing quality of service standards.

  • The Plan should recognize that the Virginia Electric Utility Restructuring Act requires licensing of competitive metering and billing service providers.

  • The Plan should not eliminate the use of the "wholesale transaction" approach for delivery of competitive metering and billing services.

  • Unbundling should not impact rates for bundled service or default service.

  • The Commission should have the authority to delay implementation of the Plan based on consumer and supplier readiness.

The full text of the Consumer Counsel Comments is available from NEM headquarters.

 

Iowa

 Board Hearing on Natural Gas Marketer Certification

A Hearing of the Board was held on Wednesday, August 23rd, 2000, on the proposed certification rules for natural gas marketers. MidAmerican Energy (MEC) attended on behalf of NEM. Other parties present were the Office of Consumer Advocate (OCA), the Public Alliance for Community Energy (PACE), and Peoples Natural Gas (UtiliCorp).

Summary of the items discussed:

  • The split between large and small customers

    • MEC suggested the split should be at a lower usage level to provide consumer protection for small customers without requiring marketers to protect customers that don't need protection.

    • The OCA agreed that residential and small commercial customers need protection.

    • The Board felt it might be safer to err on the side of protecting more customers rather than fewer customers.

    • PACE thought if more customers were protected the costs of certification could be spread across more customers. On the other hand they thought the usage level where consumer protection would apply should be lower than suggested in the proposed rule.

  • Replacement penalty provision

    • The OCA thought the penalty should be uniform across the state.

    • MEC thought the penalty was too general and covered periods when no penalty should apply.

    • MEC thought utilities should develop penalty provisions in their own tariffs that would be based on maintaining system reliability.

    • PACE thought penalties should be operationally justified and applied on an aggregated basis. They thought the current penalty provision was exorbitant and unenforceable.

  • Consumer protection

    • The OCA wants more consumer protection than in other states and looks at Georgia as a model.

  • Certification application and fees

    • MEC requested the requirements imposed in Iowa be no more stringent than those imposed in other states. NEM's "Length of Application Approval" was used as an example.

    • MEC suggested fees be set initially on an estimated cost, and then adjusted annually to reflect actual costs.

Additional written comments are due on September 21, 2000. NEM members are asked to comment on the following:

  • The level of usage under which consumer protection would apply. The level suggested should be based on levels in other states, or some additional rationale should be provided.

  • Residential and small commercial definitions used in other states.

  • Certification requirements.

  • Comparison of Iowa's proposed rules with other states rules and identification of where the Iowa rule is more or less stringent.

Many thanks to George Phillips of MidAmerican Energy Company for representing NEM at this Hearing and for providing this summary.

 

South Carolina

 South Carolina to Revisit Deregulation

South Carolina is revisiting deregulation at the next session beginning in January. The majors (Duke Energy, SCANA & CP&L) seem to be in favor of some type deregulation, but no real coalition has been announced. The co-ops are against it, citing the problems in California. NEM plans to monitor developments.

Many thanks to Caleb Freeman of Vaxa Capital for this notice.

Other Issues

 NEM Submits Comments on NARUC's Analysis of Codes of Conduct

NEM urged that NARUC recognize and ascribe the full weight and value of NEM's Uniform Code of Conduct (UCC) in NARUC's Analysis and subsequent recommendations. NARUC's conclusion that no consensus exists on many of the Code of Conduct issues belies the degree of consensus represented in NEM's UCC. The full text of NEM's Comments on NARUC's Analysis of Codes of Conduct is available on the NEM Website.