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September 24, 2004
National Grid Elected to Executive Committee

NEM is pleased to announce that National Grid USA has been elected to NEM’s Executive Committee. National Grid USA is a wholly owned subsidiary of National Grid Transco, an international, London-based company. National Grid USA will be represented within NEM by Sharon Rodriguez, Vice President, Retail Markets, Michael Calviou, Vice President, Transmission and Nancy Testani, Director of State and Regulatory Affairs.

Entergy Solutions Nominated to Executive Committee

NEM is pleased to announce that Entergy Solutions has been nominated to NEM’s Executive Committee. Entergy Solutions, Entergy’s retail affiliate, provides competitive energy products and services to help residential, commercial and industrial customers in Texas better manage their energy needs and requirements. Entergy Solutions will be represented within NEM by Jim DeLong, Vice President of Retail Markets.

Upcoming NEM Events

Please reserve the dates September 29-30, for NEM's Fall Industry Leadership Roundtable to be held in Boston. The meeting will be held at the Hyatt Harborside. Please reserve your room ASAP (617-568-1234 or 1-800-233-1234) to receive the NEM rate of $189 per night. Many thanks to Nate Owen and Bob Potter of Energy Services Group for hosting the meeting. A hotlink is provided here for registration.

NEM's Winter Executive Committee Meeting will be held in Newport Beach, California on January 19-20, 2005. Many thanks to Peter Weigand and Ian Carter of Commonwealth Energy (now called Commerce Energy Group) for offering to host this event.

Lastly, NEM's Annual Restructuring Conference in Washington, DC, will be held at the Marriott Metro Center on April 26-27, 2005. Please email or call headquarters if you wish to speak at or sponsor this event. Advertisements will begin later this month.

FERC's Market-Based Rate System Upheld by Ninth Circuit

The Ninth Circuit rejected California's contention that FERC's market-based rate tariffs violate section 205 of the Federal Power Act (FPA), which requires "just and reasonable" rates. Likewise, the court rejected California's argument that the market-based rates should be disallowed because FERC could not review them in advance. The court held that FERC, acting under its authority from the FPA, may utilize market-based rate systems in its tariffs for wholesale sales of electricity. However, because the court found FERC's reporting requirements to be essential to the tariff, the court found FERC may recover retroactive refunds for quarterly reporting violations, even though the Commission found that it could not. The court remanded the case to the Commission to determine its remedial options for reporting violations. The full text of the Decision is available on the NEM web site.

FERC to Hold Interstate Gas Pipeline Technical Conference

Through this conference, FERC intends to determine whether a generic rulemaking should be instituted that requires interstate gas pipeline owners to electronically post the preceding day's actual natural gas storage inventory levels. The conference will consider three components to be posted: 1) net aggregate actual injection or withdrawal data, 2) actual total available working gas and 3) actual total storage inventory volume. Panels will discuss the costs and benefits of such enhanced reporting, including a possible increase in market efficiency and decrease in price volatility. The conference will take place on September 28, 2004 at 9:30 a.m. at Commission headquarters.

FERC to Hold Technical Conference on Connecticut Infrastructure

The conference will consider energy infrastructure in and around Connecticut, focusing on new electric transmission proposals, their impact on the region's reliability, their costs and their consequences for connectivity with the New England grid as well as surrounding regions. The conference will be held on October 13, 2004, in Hartford, Connecticut. Register if attending in person by October 11, 2004.

New York
NEM Submits Comments in Support of NY Policy Statement

NEM supports the Commission authority to limit “utility services” to functions that only a utility can provide. It is completely correct to determine that a voluntary contract to serve is a binding “obligation” to serve. By separating the obligation to serve into utility delivery services and ESCO-commodity services, the Commission potentially enhances the reliability of both energy supply as well as delivery. NEM also supports the Commission's finding that: a) market-based rates are just and reasonable, and b) qualified suppliers may reliably provide commodity functions at just and reasonable rates. A copy of the comments is hotlinked here for your review.

Commission Votes to Increase Renewable Energy Production

The Commission voted to approve a policy calling for 25% of electricity to be generated from renewable resources by 2013, a 6% increase from the current 19.3%. The program will require the voluntary green market to contribute 1% of the 25%. The program divides resources into two categories: 1) "main tier" generation, including larger electric generation facilities like hydroelectric and 2) "customer-sited tier" generation, including smaller, on-site generation such as fuel cells. A non-bypassable volumetric charge on the delivery portion of electric bills, beginning in the fourth quarter of 2005, will fund the development of eligible resources through competitive selection of programs from both tiers. This competitive procurement program will be administered by NYSERDA. The program will commence on January 1, 2006 and will be reviewed in 2009. The full text of the release is available on the NEM web site. The order, when made available, will also be available on the NEM web site.

Commission Approves NEM-Backed ConEd Gas Rate Plan

As urged by NEM, the Commission approved ConEd's gas settlement that incorporated many of the migration strategies outlined in the Commission's recently released Policy Statements, such as purchase of receivables. The plan also requires ConEd to institute a marketer referral program akin to O&R's PowerSwitch, use an ESCO ombudsman and conduct a Market Match and Market Expo program. ConEd's rate plans will become effective on October 1, 2004. The full text of the release is available on the NEM web site. The Order, when released, will also be available on the NEM web site.

NEM Submits Comments on RG&E's Purchase of Receivables Plan

NEM filed comments supporting RG&E's plan to purchase receivables without recourse. Under RG&E's plan, the company would purchase receivables effective January 1, 2005 through December 1, 2008. Discount rates would be set at .61% and 1.99% for electric and gas, respectively. If a customer, either residential or non-residential, failed to make payment on a consolidated bill, under its plan, RG&E would retain the authority to disconnect delivery and competitive supplier service. NEM supports purchase of receivables programs as a first step in a transitional market design for New York utilities and has recommended statewide adoption of the O&R model. The full text of the comments is available on the NEM web site.

Working Group to Hold Meeting on Reverse Migration Rider

The Gas Operations and Logistics Support Working Group will meet to discuss the reverse migration rider. The Working Group will first consider whether the rider should even be implemented, in light of the potential customer confusion. If the group reaches consensus to go forward with the rider, specific discussions on the draft customer notices and customer education effort will take place. The meeting wiill be held October 5, 2004 at 10:00 a.m. at the Commission offices.

Dominion Virginia Issues Request for Qualifications to Participate in Pilot Program

Dominion Virginia will be seeking competitive bids to supply electricity to geographic sub-blocks of retail customers. Bids must provide for service beginning in December 2004 through the Customer's January 2006 meter reading date. The three geographic sub-blocks are Northern Virginia, Central/Western Virginia and Eastern Virginia. Each geographic area will consist of two customer sub-blocks - 1) Residential Service and Worship Site Service and 2) non-residential GS-1 and GS-2 customers.

Bids will be sought through a two-step process, consisting first of a Request for Qualifications (RFQ) followed by the solicitation of competitive bids from those entities duly qualified. Suppliers previously qualified do not need to respond to the RFQ. Responses to the RFQ are due either by email ( and or mail by October 12, 2004. The full text of the RFQ is available on the NEM web site.

Commission Adopts Washington Gas Light Interim Financial Security Requirement

Metromedia Energy filed a complaint seeking an investigation into the financial security requirement imposed upon it by Washington Gas Light. MME argued that the requirement violated competitive access rules because the amount of security did not bear a reasonable relationship to risk assumed by WGL. In his report, the Hearing Examiner recommended that WGL be allowed to collect an interim financial security deposit until the Commission approves its permanent security requirement. WGL requested an interim requirement consisting of a 60-day delivery risk coverage factor as well as the highest NYMEX price for 2004-2005 heating season as published on or about August 31, 2004. The Hearing Examiner recommended a 15-day delivery risk coverage factor and a forecast price set on or around September 30, 2004. While allowing WGL's request for the price component of the delivery risk to stand, the Commission modified the delivery risk coverage factor to 15 days. The Commission adopted the Hearing Examiner's recommendation that the injunction be extended until the Commission can approve WGL's financial security requirement. The full text of the order is available on the NEM web site.

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