Utility Presents Potential Changes For Upcoming Procurement Of 2022-2023 SOS Due To Delay In PJM Capacity Auction

Several Wholesale Suppliers Supporting Having SOS Bids Set At $0/MW-day For Capacity, With Future Reimbursement By Pepco Once PJM Capacity Price Set

August 16, 2019

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Reporting by Paul Ring • ring@energychoicematters.com

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Pepco has filed with the District of Columbia PSC a report concerning a work group meeting that was convened to discuss how to address an upcoming SOS procurement that is scheduled to include, for residential and small commercial customers (RSC), a three-year contract, for approximately one-third of the load, that would start on June 1, 2020 and extend into the 2022-2023 delivery period, for which the PJM Base Residual Auction for capacity has been delayed indefinitely pending further FERC order.

Pepco said participants at the work group considered the following options:

1. Option 1: Status quo

2. Option 2: Change RSC 3-year term to 2-year term (June 1, 2020 through May 31, 2022). Hold an auction for remaining year (June 2022 through May 31, 2023) in the 2019 procurement cycle (contingency tranche or later).

3. Option 3: Change RSC 3-year term to 2-year term. Hold an auction for remaining year during the 2020 procurement cycle or subsequent cycle.

4. Option 4: Suppliers to incorporate a capacity price of $0/MW-day into their bids for deliver year 2022/2023. Pepco will reimburse SOS suppliers the final Pepco zone capacity price for delivery year 2022/23 times the daily UCAP obligation.

During the meeting, the participants did not agree on eliminating any options or come to a consensus on a preferred option, Pepco said. In addition, participants did not promote additional options for consideration

Following the meeting, Pepco sent out a poll with the 4 options and requested respondents rank the options in terms of preference. A total of eight suppliers responded to the poll. Option 4 was preferred by four suppliers. Option 3 was preferred by three suppliers and Option 1 was preferred by one supplier.

"Pepco, in its role as SOS Administrator, takes no formal position on the 4 options discussed at the working group meeting," Pepco said

FC 1017

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