Pennsylvania utilities plan to purchase electric generation supply

Written By: Jen Neville
January 1, 2018

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FirstEnergy Corp.’s Metropolitan Edison (Met-Ed), Pennsylvania Electric (Penelec), Pennsylvania Power (Penn Power) and West Penn Power utility companies have filed plans with the Pennsylvania Public Utility Commission (PPUC) to procure electric generation supply beginning June 2019 for customers who choose not to shop with alternate suppliers.

Because the companies do not own any electric generating plants, an auction process would be used to ensure the utilities’ approximately two million customers in Pennsylvania have a secure supply of electric generation.

Per the company, the procurement process is set to be managed by CRA International, a global consulting firm with experience in energy markets. Under the proposed plan, CRA would conduct multiple auctions with generation prices calculated based on a blended average by customer class. The first auction is set to be held between Oct. 20 and Nov. 20, 2018, with others scheduled in Jan., Apr. and Jun. of 2019.

The proposed program would also include a process for meeting state-mandated alternative energy standards, including a separate bidding process in order to meet a portion of the solar energy requirements through two requests for proposals for two-year contracts for the purchase of solar Renewable Energy Credits.

Additionally, the company has stated that the rate filings would include the continuation of the Customer Referral Program that was established in August 2013 to help enhance retail competition in the utilities’ service territories.

According to FirstEnergy, the companies are also proposing a change for commercial customers served on the GS Medium Rate Schedules with demand usage billing in excess of 100-kilowatt hours. Rather than use the current system of fixed default service prices that change quarterly, the companies plan to move qualifying customers to an hourly pricing schedule.

The companies expect that the PPUC would rule on their Default Service Program petition sometime in mid-2018.

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