PUCO Ends Use of SSO Auction at Dominion East Ohio

The Public Utilities Commission of Ohio has approved a stipulation at Dominion East Ohio which will eliminate the Standard Service Offer (SSO) auction.

Instead, current SSO customers will be included in the Standard Choice Offer (SCO) auctions, similar to the treatment at Vectren Energy Delivery and Columbia Gas.

Unlike at Vectren and Columbia, where choice-ineligible load is assumed by winning suppliers in the SCO auction, Dominion East Ohio has been procuring default service supplies for such choice ineligible customers (Percentage of Income Payment Plan, etc.) through a separate SSO wholesale auction, conducted prior to the retail SCO auction.

The SSO auction clearing price served as a price floor for the SCO auction. If retail suppliers were willing to serve more tranches than available at the price floor, the SCO auction transitioned to an ascending clock auction under which retail suppliers bid for the right to serve customers at the floor price.

However, the ascending clock auction has only occurred once, in 2009, the first year of the SCO auction.

Given these results, Dominion East Ohio, PUCO Staff, and retail suppliers agreed to roll the SSO load into the SCO auction, to reduce administrative burden, customer confusion, and counterparty risk. Additionally, the tranches in the SCO auction will now be more diverse, which parties said will reduce risk to suppliers, potentially lowering prices.

Under the stipulation approved by PUCO, the SSO auction will be combined with the current SCO auction, effective with the auction to be conducted in the first quarter of 2012.