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PSC Approves RFP To Procure Up To 25% Of Default Service Under Long-Term Contracts, Requires Price Collar
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The District of Columbia PSC approved, with modifications, an RFP to be issued by Pepco to obtain up to an additional 20% of electricity SOS supplies through long-term contracts (which, if resulting in successful bids, could bring the total amount of SOS under long-term contracts to 25%)
The PSC had previously approved targeting 25% of SOS as being served under long-term contracts (see background here)
As previously reported, the District's Department of Energy and Environment had, in comments on the draft RFP, urged the PSC to conduct an analysis of long-contracting or hedging for capacity, as the RFP is for energy and RECs only. The PSC said that such capacity considerations and related matters are outside the scope of the RFP proceeding, and are being addressed in FC 1183
The PSC accepted Pepco's proposal to allow bidders in the RFP to propose a 25-year contract term in addition to a 15- or 20-year PPA (the 15- and 20-year options were available in the prior 5% SOS long-term contract RFP)
The PSC said, "Although we stated in Order No. 21918 that a
longer agreement adds more uncertainties to the SOS program in the future, we believe that these
uncertainties are now outweighed by the potential benefits of better pricing for customers and
agree with this change."
Pepco had also proposed to remove the pricing collar review from the RFP, which, if included,
would allow the seller and Pepco to reopen the contract and renegotiate the purchase price if the price
at the time of review fell outside of 15% of the prevailing market price.
"The
Commission is concerned about the removal of this provision from the RFP and believes that
including the pricing collar review in the RFP would help ensure that the price remains in line with
market conditions throughout the duration of the contract. Therefore, the Commission disagrees
with this change and directs Pepco to include the pricing collar review, which was discussed in
Order No. 21918, in the RFP," the PSC said
The PSC, "reiterates that it will only approve such PPAs that it
determines to be in the public interest."
FC 1017
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November 19, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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