PUCO Approves Vectren Energy Delivery SCO Auction Results

Vectren Energy Delivery of Ohio's second Standard Choice Offer (SCO) auction produced a Retail Price Adjustment of $1.35 per Mcf, which was approved by the Public Utilities Commission of Ohio yesterday (07-1285-GA-EXM).

Under the SCO auction, winning suppliers will directly serve non-shopping, choice-eligible customers won through the auction for the period April 1, 2011 through March 31, 2012 at a price equal to the Retail Price Adjustment, fixed for the 12-month term, plus the NYMEX prompt month settlement price for gas.

Six tranches of customers were available in the auction, and bidders were limited to winning a maximum of two tranches.

Six bidders participated in the auction. Three bidders were awarded two tranches each. Identities of winning bidders will remain confidential for 30 days.

Winning bidders will also provide wholesale gas for a proportional share of Default Sales Service customers, which include Percentage of Income Payment Plan customers and customers ineligible for choice, for the same 12-month period. These customers, who will not have a direct relationship with the winning supplier unlike under the SCO, will be served by Vectren at the same price as established in the SCO auction (i.e. $1.35/Mcf plus the NYMEX price).

The Retail Price Adjustment of $1.35/Mcf resulting from the SCO auction conducted on January 18, 2011 for 2011-12 service compares to a Retail Price Adjustment of $1.55/Mcf as established in the SCO auction for 2010-11 service.

Last year's auction also had six bidders, but resulted in four winning bidders splitting tranches subject to the same two-tranche cap, rather than three winning bidders this year.

The descending-clock SCO auction was conducted by World Energy Solutions.