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PUC Directs Utility to Proceed With Contingency, Managed Portfolio for Default Service, After RFP Declared Non-Competitive

April 24, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

The Pennsylvania PUC has directed Citizens' Electric Company of Lewisburg, PA and Wellsboro Electric Company to implement their contingency plan for procuring default service, which will continue the "stratified," managed portfolio approach to procurement for one year, after an RFP for a novel load-following product failed to produce competitive results.

As previously reported, the PUC had approved, for the three-year period beginning June 1, 2015, a default service plan at Citizens' and Wellsboro which would have procured a three-year, load following contract to serve all of the non-hourly customers at each utility, with pricing based on a six-month fixed index of wholesale prices, plus a fixed retail adder as determined through the RFP.

However, despite pleas from Commissioners James Cawley for retail suppliers to compete for the product to show that they could fill the default supplier role, the utilities expressed concern in advance of the RFP that they would fail to attract the minimum requirement of three bidders.

In a secretarial letter issued yesterday, the PUC said that, "Upon initial investigation, the Commission has determined that the bid results from the April 2015 Solicitation were not conducted in accordance with the RFP Process and Rules, and Commission's Opinion and Order at page 16. Additionally, the results of the April 2015 Solicitation were not competitive, as defined by the RFP Process and Rules approved by the Commission."

"Therefore, we reject the bid results submitted for the April 2015 Solicitation, as it was not conducted in conformance with the approved DSP-IV. Furthermore, the companies are to use the contingency provisions and return to the Stratified Plan as directed at Docket Nos. P-2014-2425024 and P-2014-2425245," the PUC directed.

The contingency plan requires the use of the current stratified procurement plan through May 31, 2016. Rather than being load-following, the stratified procurement plan relies on the purchase of various laddered blocks of 7x24 products and 5x16 products

Docket No. P-2014-2425024

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