Bid Monitor Reports Significant Decrease In SOS Auction Participation

June 9, 2022

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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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A June procurement for electricity SOS supplies in Maryland saw a significant decrease in bidders and offers versus the last comparable procurement, the PSC's procurement monitor reported

The RFP procured residential supplies only at Potomac Edison (94.2 MW of residential supply covering the June 1, 2023 to May 31, 2024 time frame), while also procuring Type II supplies at all of the IOUs

The June 2022 RFP saw six bidders who submitted bids for one or more of the five products available. This is three less bidders than the number of bidders in a January 2022 procurement, the most recent RFP with similar products offered

For the entire June 2022 RFP, there were approximately 2.8 MW bid for every MW needed. "This is much lower than January’s RFP, which saw 4.7 MW bid for every block needed overall," the procurement monitor stated

Addressing the decreased participation, the monitor stated, "The current energy market features rising and very volatile prices, particularly for the next several months. This increases the risks to bidders of offering fixed priced service. In response to these conditions many bidders in SOS-type RFPs have sought to reduce their risk exposure by reducing their amount of supply offered into these RFPs or simply not participating."

In the June RFP, there were four winners, which is one less than the number of winners in last January’s procurement.

The monitor found the procurement to be competitive, and no winning bids were rejected under the Price Anomaly Threshold

The monitor noted that, "Winning prices in this RFP have increased greatly."

Separately, PSC Staff reported that, for residential customers at Potomac Edison, the RFP results reflect an SOS power supply increase of 27.8% for the term starting in June 2023. Potomac Edison has purchased 59.8% of the 2023-2024 load inclusive with this bid.

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