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Utilities Seek To Hold "Summer" Default Service Auction In October, Revise Number Of Tranches For Each Product Term Length
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The FirstEnergy Ohio utilities have requested certain changes in their PUCO-approved default service auctions under their current electric security plan (ESP V), which was approved by PUCO, with modifications, in May 2024
The FirstEnergy Ohio EDCs' approved SSO procurement plan under ESP V contemplates a "summer" 2024 auction. Under the EDCs' plan as originally filed, this summer 2024 procurement had contemplated purchasing a mix of 12 and 24-month products.
However, while the ESP was pending, PUCO in January 2024 ordered the FirstEnergy Ohio EDCs to procure additional 24-month products for a June 1, 2024 start (rather than relying solely on 12-month products), changing the underlying portfolio that the EDCs now have as they ready the summer 2024 auction
Regarding the date of the summer 2024 procurement, the FirstEnergy Ohio utilities requested that PUCO allow the utilities to conduct the summer 2024 procurement between September 30, 2024 and October 31, 2024 (now called the "October" auction), at a
date to be set subject to input from the EDCs' SSO procurement consultant
The FirstEnergy Ohio utilities said that this delay is necessary, "[d]ue to the time
necessary to implement the May 15, 2024 ESP V Order, including Commission-authorized
changes to the Companies’ competitive bidding process, and to conduct pre-auction activities[.]"
The FirstEnergy Ohio EDCs have also, separately, sought rehearing of PUCO's ESP V decision, and in such rehearing request, the utilities are now seeking a three-year ESP, rather than the five-year term adopted by PUCO and currently in place
As a result, the FirstEnergy Ohio utilities proposed revised SSO procurement tranche targets for each of the 12- and 24-month products for both a 3-year ESP and 5-year ESP. Under all proposed changes, the default service portfolio would still be limited to only 12 and 24-month products, as is the case currently
Under both ESP term lengths, the EDCs now propose to procure 25 tranches of a 12-month product in the October 2024 auction, with 25 tranches of a 24-month product to be procured in a winter 2025 auction
In part due to existing contracts, under both a 3-year ESP and 5-year ESP, the
delivery year of June 1, 2025 to May 31, 2026 would have a portfolio consisting of 75% 24-month contracts and 25% 12-month contracts
For the remaining SSO procurements under the current five-year ESP V, the FirstEnergy Ohio EDCs proposed conforming changes to the 12 and 24-month tranche mix to reflect prior changes directed by PUCO noted above.
Under a 5-year ESP, once existing laddering is completed, and excluding the final year which is unique in order to eliminate overhanging products, the FirstEnergy Ohio utilities generally propose that 24-month products will constitute 60-70% of the SSO portfolio with 12-month products constituting the remaining 30-40%, with the exact ratio varying within those bands in a given delivery year. These ratios are generally in-line with the currently approved bid plan, but the updates differ slightly in some years
Case 24-0133-EL-UNC
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July 31, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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