Utility Mistakenly Tells SOS Bidders That Bids Were Rejected, Forced To Take Higher Bids From Other Sellers

October 24, 2019

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Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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In an order approving results from the October 21, 2019 Standard Offer Service (SOS) solicitations for electricity supply for residential customers and Type I and Type II commercial customers, the Maryland PSC reported that an error led to the rejection of bids that should have been awarded at Delmarva Power

As stated in the PSC's order, "The Bid Monitor did note that although the RFP was successful, one issue did occur that was related to DPL’s [Delmarva Power] bid award. Essentially, DPL mistakenly told the two winning DPL residential suppliers that they had not won any supply."

The PSC further said, "DPL realized the mistake the morning of October 22, 2019 and contacted the winners, but by that time one bidder was not willing to honor its bid, citing overnight increases in market prices. The Bid Monitor reported that under the RFP rules, there was no obligation for the supplier to hold to a bid that had been rejected."

"DPL alerted the Bid Monitor to the issue and, after consultation, proceeded to contact the bidder with the next most inexpensive offer to see if that bidder would agree to hold to its bid. The bidder agreed and the supply was fulfilled," the PSC said

"The Bid Monitor testified that it believes it was fair to use offers from the bid day to fulfill the supply as the bids were made under competitive conditions and the final price was below the PAT," the PSC said

As stated in the PSC's order, Delmarva said during a hearing on the bid results that, in the PSC's words, "customers would be held harmless due to the initial error in DPL’s residential bid award."

The ultimate SOS rates for Delmarva will be based on the lower prices that should have been awarded, had Delmarva not made the error in notifying bidders

Delmarva said that it is absorbing the impact of having to award the tranches to bidders with a higher price versus what should have been awarded, while setting SOS rates based on the lower priced bids that had been erroneously rejected

Case 9056 et al.

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