PSC Rules On Amount Of SOS Load To Be Procured Under Long-Term Contract

April 2, 2024

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Copyright 2010-23 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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The District of Columbia PSC has again affirmed that the long-term renewable energy PPA to be procured by Pepco for SOS customers shall not exceed 5% of SOS load

See background on the RFP for such a PPA here

Certain parties had proposed an increase in the amount of load covered by the PPA, which once again is before the PSC because the developer who was previously selected under an RFP terminated the agreement, so Pepco is once again seeking to procure the long-term supplies

The PSC said in its new order that, "The Commission disagrees with DOEE as the cap for the PPA is equivalent to approximately 5% of the SOS load and expressly limits the PPA from going beyond 5%. As the Commission previously noted, starting small in this manner would help minimize risks to ratepayers since the price risk would be significantly reduced as the impact of procuring 5% of SOS load in this manner on SOS prices is very slight."

Commissioner Richard A. Beverly issued a concurrence stating that 5% should be a floor, writing that, "I think it’s time to revisit raising the 5% cap or reconsider giving Pepco more flexibility to exceed the 5% cap so that we don’t inadvertently frustrate Pepco’s ability to attract bidders."

The PSC did modify one of the requirements under the RFP to attract more bidders

DOEE had requested that the RFP requirement that bidders must have participated in the operation or development of a facility that has a nameplate capacity of not less than 300 MW in the aggregate be removed. Pepco responded that the provision is meant to attract bidding from experienced entities that can deliver on the contract and operate the project over the entire term and that the 300 MW requirement is a reduction from the 1000 MW requirement in the original PPA.

However, the PSC was persuaded by DOEE that the current threshold for bidders, "is overly restrictive and should be lower than what was in the original PPA."

The Commission directed Pepco to change the amount so that bidders (or their affiliates) must have participated in the operation or development of the asset with an aggregate nameplate capacity of not less than 100 MW for new projects and 10 MW for existing projects or projects that are nearing completion by the time of bid.

"We believe this change will help to increase the number of qualified bidders while also ensuring that these bidders are experienced entities. The threshold for existing projects is lower because there is less risk with existing projects than for new projects," the PSC said

FC 1017

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