Default Service Auction Manager, Mid-Auction, Reduces Target For Supply To Be Procured; PUC Orders Supplemental Auction To Fill Remaining Tranches
March 23, 2022 Email This Story Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
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An auction for Standard Service Offer electricity supplies at Dayton Power & Light (AES Ohio) did not procure all of the originally targeted tranches, and the Public Utilities Commission of Ohio has ordered DP&L to hold an additional auction
The auction was originally seeking 12-month products for 100% of supplies (100 tranches) for the period June 1, 2022 - May 31, 2023
However, only 50 tranches were procured in the auction
A post-auction report states that, "the tranche target was
reduced from 100 tranches to 50 tranches based on pre-determined criteria related to excess eligibility and
the reservation price for the auction. The reduction was executed consistent with the auction rules and
The auction's bidding rules do not discuss specifics concerning what the criteria may be, but state as follows, "In some cases, the Auction Manager may reduce the tranche targets. The criteria that could lead to such a reduction will be determined prior to the auction but will not be announced to bidders. Once certain pre-specified criteria related to excess supply and related to the reservation price have been met, the discretion to reduce a product’s tranche target because of insufficient supply will be eliminated. Thus, any tranche target reduction would more likely occur in the earlier rounds of the auction. If the Auction Manager reduces the tranche target for a product, bidders will be informed of the revised tranche target. Any bidder that would otherwise have eligibility exceeding the new tranche targets will have its eligibility reduced so as not to exceed the new tranche targets."
The bidding rules also state, "If there is insufficient supply for the tranches to ensure competitive bidding, the Auction Manager will reduce the tranche target. The criteria that could lead to such a reduction will be determined prior to the auction but will not be announced to bidders."
For the 50 tranches procured, the tranche-weighted average price of winning bids from the auction was $75.13 per MWh, for the delivery period of June 1, 2022 to May 31, 2023
There were 7 winning bidders in the auction
PUCO directed DP&L to schedule an additional auction no later than 30 calendar days prior to the start of the delivery period to procure the remaining 50 tranches (50% of supply)