IOUs to Buy Electric Generation for Pennsylvania Default Service Customers

FirstEnergy – the operator of 10 investor-owned electric systems in the Midwest and Mid-Atlantic regions, including four in Pennsylvania – has filed plans with the Pennsylvania Public Utility Commission (PPUC) to procure electric generation supply for Metropolitan Edison (Met-Ed), Pennsylvania Electric (Penelec), Pennsylvania Power (Penn Power), and West Penn Power for customers who choose not to shop with alternate retail suppliers. The new resources would be available to default service customers starting in June 2017.


The procurement process will be managed by Boston-based CRA International a global consulting firm with expertise in energy markets. Under the proposed plan, CRA will conduct auctions in January, April, and October.


The first auction will be held in October 2016, with generation prices calculated based on a blended average by customer class. The process will ensure the confidentiality of information provided by bidders, each of which will be required to certify that it is creditworthy, acting independently of other bidders, and making firm offers to provide generation service to customers.


The proposed program also includes a process for meeting state-mandated alternative energy standards, including a separate bidding process designed to meet a portion of Pennsylvania’s solar energy requirements through a request for proposal for one, two-year contract for the purchase of solar Renewable Energy Credits.


In addition, the four utilities have proposed to continue the Customer Referral Program that was established in August 2013, in an effort to continue to enhance retail competition in their service territories.


The companies expect that the PPUC will rule on their Default Service Program petition in mid-2016. Together, the four utilities serve about 2 million customers in Pennsylvania.

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