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Pa. Utility Files To Procure Default Service Through Spot Market

June 30, 2015

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

Pike County Light & Power has filed with the Pennsylvania PUC a default service plan for the period June 1, 2016 through May 31, 2018 which would continue to rely on New York ISO spot market purchases for all default service load.

"PCL&P's default service load (i.e., 7.6 MW in 2014) simply is not a large enough load to obtain a prudent mixture of long-term, short-term and spot market purchases as envisioned by Section 2807(e) of the Public Utility Code," the company said in its petition.

Currently, retail suppliers serve approximately 60% of PCL&P's peak load.

"[T]he small size of the load served by the Company, combined with the large percentages of customers served by EGSs, makes it exceedingly difficult to negotiate favorable long-term generation supply contracts. Spot purchases, in this instance, are the optimal and prudent solution from a least cost over time perspective," the utility said.

Pike County Light & Power proposes to continue the current default service rate setting mechanism which includes: (1) the Market Price of Electric Supply, and (2) the Electric Supply Adjustment Charge.

The Market Price of Electric Supply would be determined quarterly based on the utility's forecast of the wholesale supply costs for the quarter.

The Electric Supply Adjustment Charge would be calculated quarterly to reconcile the monthly over- or under-collections of the preceding three months.

As is current practice, for any given quarter, the Electric Supply Adjustment Charges, including Gross Receipts Tax, would not exceed a charge or a credit of 2.0 cents per kWh. In the event the 2.0 cents per kWh limit is imposed, any remaining over- or under-collection balance is included in the subsequent quarter's Electric Supply Adjustment Charges to the extent possible within the 2.0 cents per kWh limitation.

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