Utility Seeks To Drop 24, 36-Month Contracts From Upcoming Default Service Auction

February 5, 2021

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Reporting by Paul Ring • ring@energychoicematters.com

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The Dayton Power and Light Company ('DP&L' or the 'Company') requested that the Public Utilities Commission of Ohio ('PUCO' or 'Commission') issue an order authorizing DP&L to conduct a competitive auction in March 2021 solely for a 12-month supply for its standard service offer ('SSO') customers, for the period starting June 1, 2021, without, at this time, seeking proposals for a 24-month or 36-month supply.

DP&L said, "there is currently a great deal of uncertainty in capacity markets for periods beyond a 12-month period, the public interest would be served by limiting this year’s SSO auction to a 12-month product. Soliciting bids for a longer term products [sic] would likely result in higher prices."

While a schedule has been set for the resumption of PJM's base residual auctions for capacity, such auctions won't occur before the March 2021 procurement

"The significance of this in relation to DP&L’s SSO Auction process in Ohio is that prospective bidders currently do not know what their capacity costs will be for 2022-23," DP&L said

Furthermore, DP&L said, "Until some experience is obtained by a PJM BRA being run with the MOPR changes, potential SSO bidders in Ohio will likely incorporate a substantial risk factor into the capacity costs that they incorporate into their SSO bids."

"Therefore, including a 24 or 36-month product in DP&L’s competitive bid will inevitably increase the amount of inherited risk for all parties involved and may cause prices to be unusually high in years two or three of a 24-month or 36-month product. In the interest of maintaining beneficial and stable rates for its customers, DP&L proposes to eliminate the 24 and 36-month product and only offer the 12-month products in its upcoming March 2021 auction," DP&L said

"Based on the uncertainty of the PJM applicable rate for the 2022-23 delivery year and the previous finding by the Commission in its 2020 SSO Order, DP&L respectfully requests that the Commission approve its request to conduct auctions to obtain a 12-month product, temporarily eliminating the 24 and 36-month product, consistent with the public interest, the benefit of customers, and the auction processes approved for the other Ohio utilities that conduct SSO auctions," DP&L said

Case No. 17-957-EL-UNC

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