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FirstEnergy Pennsylvania Seeks To Use Five-Year Fixed Contract For Part Of Default Service
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As part of the proposed default service plan for June 1, 2027 through May 31, 2031 (DSP VII), FirstEnergy Pennsylvania is proposing certain changes in the procurement portfolio as well as the wholesale supply product
Notably, FE PA proposes to use a 60-month fixed-price full requirements product for about 10% of residential default service supply
The remaining residential SOS portfolio would consist of staggered 12- and 24-month full requirements contracts, with each length constituting about 45% of the total default service load.
Commercial default service (generally under 100 kW as further described below) would rely solely on staggered 12- and 24-month full requirements contracts
FE PA is proposing several changes to wholesale supplier obligations under the default service plan
Notably, FE PA is proposing that wholesale suppliers be relieved of paying Network Integration
Transmission Service (NITS) charges
FE PA will pay NITS charges for default service customers, with costs recovered through a bypassable rider that is included in the Price to Compare. Unlike other non-market based charges, for which FE PA assumes the obligation for all delivery customers, retail suppliers will remain responsible for paying NITS
A witness for FE PA said, "Because of the continued increase in transmission spend, removing NITS from the auction
product will reduce the supplier risk premium and therefore reduce the overall cost to
customers."
FE PA said that removing NITS from the SOS auction product is consistent with treatment at other utilities in Pennsylvania
FE PA, not wholesale suppliers, will also be responsible for DOE Section 202(c) charges.
Additionally, FE PA filed revisions to its retail supplier tariff listing FE PA, and not the retail supplier, as the responsible party for DOE Section 202(c) charges, similar to the treatment of other non-market-based charges, including deactivation charges
While this shows an intent that the DOE Section 202(c) charges are to be treated similar to the existing non-market-based (NMB) PJM charges at FE PA, it is notable that, in several instances, FE PA does not include the DOE Section 202(c) in the list of "NMB charges", but rather lists the DOE charges separately.
For example, FE PA states, "winning [SOS] bidders will not be responsible for: (i)
Regional Transmission Expansion Plan ('RTEP') charges; (ii) Expansion Cost Recovery
Charges; (iii) Reliability Must Run ('RMR')/Generation Deactivation Charges associated
with generating plants for which specific RMR charges began being assessed following
July 24, 2014; (iv) historical out-of-market tie line, generation, and retail customer meter
adjustments; (v) unaccounted for energy; (vi) any approved reallocation by the Federal
Energy Regulatory Commission ('FERC') of PJM Regional Transmission Expansion Plan
charges related to Docket No. EL05-121-009 (collectively, referred to as 'non-market based charges' or 'NMB charges'); (vii) Network Integration Transmission Service
('NITS') charges; and (viii) DOE Section 202(c) charges."
The reduction in risk premiums from the above-described changes, as well as the use of a 5-year contract for part of residential SOS, is particularly notable in light of FE PA's proposal to make retail supplier residential products whose prices exceed the price to compare, at the time of enrollment, ineligible for POR (see story here)
Wholesale suppliers will be responsible for meeting all AEPS (renewable) obligations, as FE PA would cease being responsible for a portion of the solar AEPS as done currently at certain of the FE PA EDCs
For non-hourly customers, FE PA would conduct SOS auctions twice annually, in January and November, in a change from the current auction timing of April and November (to facilitate a transition from the current SOS portfolio, three auctions would be held in 2027, in January, April and November 2027).
FE PA proposes to continue a 6-month fixed price to compare for residential and commercial customers. PTCs would continue to be unique at each of the four rate districts at FE PA (Met-Ed, etc)
PTC reconciliations would continue to occur on a semi-annual basis
FE PA does not propose any change in the cutoff for default service rate classes
However, similar to previously reported actions at several other Pennsylvania utilities, FE PA does propose to change how a non-residential customer's size is determined for classification into either industrial hourly default service (100 kW and over) or commercial fixed price default service (under 100 kW)
Specifically, FE PA proposes that the 100 kW threshold shall be determined by the maximum
registered peak load (MRPL) of the customer, to address large customer-generators with net metering who would otherwise be classified as under 100 kW commercial customers under the current approach.
For customers placed into the hourly default service class as a result of this change, their excess generation would now be paid-out based on the hourly priced default service rider rate, as opposed to the fixed commercial PTC
Regarding hourly priced service,
FE PA proposes to no longer provide a $4.00 per MWh adder for winning wholesale suppliers in the hourly
priced auctions. "Suppliers will need to consider all costs of providing full-requirements
supply in their bid price," a witness for FE PA said
FE PA proposes to continue its default service Time of Use option for residential and commercial customers with certain changes
For the TOU option, FE PA is proposing to shorten the on-peak pricing period from seven
hours (2 p.m. to 9 p.m.) to four hours (3 p.m. to 7 p.m.), "to create larger price differentials that are
more likely to motivate customers to adjust the time of day they use electricity." The EDCs
would maintain the current super off-peak pricing usage period
Supply for TOU default service would continue to be sourced from the regular default service procurements (no separate auctions)
For the SOS auctions, FE PA would maintain the existing 50% load cap for fixed-price
product auctions
As previously reported, FE PA's customer referral program was scheduled to terminate on May 31, 2027. FE PA does not propose a successor to the customer referral program
See the related story below on the DSP for details on proposed new consumer protections and retail market reforms
FirstEnergy PA Seeks To Purchase ZERO Receivables From Retail Suppliers For Products With Rate Above Price To Compare
Would Mandate Rate Ready Billing For POR
FirstEnergy Pennsylvania Seeks To Mandate That Shopping Customers Return To Default Service At End Of Fixed Price Term, Unless Customer Chooses To Continue With Retail Supplier
Month to Month Contracts Would Require Confirmation From Customers Every Quarter That Customer Wishes To Remain With Retail Supplier ADVERTISEMENT Copyright 2026 EnergyChoiceMatters.com. Unauthorized copying, retransmission, or republication
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FE PA Would Exclude NITS From Wholesale Supplier Obligation, To Reduce Risk Premiums (Retail Suppliers Must Still Pay NITS)
February 5, 2026
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Copyright 2026 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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