Delmarva SOS Winning Bid Prices Decline for Small Customers, Increase for Large Customers

The residential and small commercial SOS portfolio at Delmarva Power in Delaware will see an 8% decline in price for the 2012-2013 delivery year, while prices for larger customers will increase from the prices in last year's auction, according to the auction report from Vantage Energy Consulting, LLC.

The 2011-12 auction sought one-third of Delmarva's residential and small commercial SOS supplies for the 36-month period beginning June 1, 2012, and 100% of supplies for medium and large non-residential customers for the 12-month period beginning June 1, 2012.

Load weighted average winning bids from the 2011-12 auction were as follows (in $/MWh):

Residential/Small Commercial, 36 Months: $83.02

Medium General Service, 12 Months: $72.94

Large General Service, 12 Months: $71.97

General Service, Primary, 12 Months: $70.62

When blended with existing supplies in the portfolio, the average portfolio supply cost for the Residential/Small Commercial class, for the 2012-2013 delivery year, is $86.31/MWh, or 7.72% lower than the average supply cost for the 2011-12 delivery year. This average cost excludes transmission, the procurement cost adjustment, renewable portfolio costs, and the reasonable allowance for retail margin.

For the larger classes, where no blending occurs, the winning bids from the auction are slightly higher than those obtained last year and which are reflected in current SOS rates. The price increase in this year's auction, versus last year's auction, by procurement class was:

Medium General Service: 0.9%

Large General Service: 5.2%

General Service, Primary: 7.1%

The 2011-12 auction saw eight participating bidders, and three winning bidders. Winning bidders from the 2011-12 auction were Hess Corporation; Constellation Energy Commodities Group; and DTE Energy Trading, Inc.

Percent and class of load served by each winning bidder in the recent auction (as well as past auctions for small customer products continuing into the 2012-13 delivery year) can be found on page 8 of Vantage Energy Consulting, LLC's report

The descending clock auction for Delmarva SOS was conducted by World Energy Solutions.