Dayton Power & Light Withdraws Market Rate Offer

Dayton Power and Light has withdrawn its application for a Market Rate Offer to govern the procurement and pricing of Standard Service Offer supply.

Additionally, Dayton Power and Light said that it intends to file an electric security plan to govern the procurement and pricing of Standard Service Offer supply on or before October 8, 2012.

The withdrawal is not surprising as PUCO has to date never approved a Market Rate Offer, and previously rejected two Market Rate Offer proposals from other utilities (and deferred action on a third until parties reached a stipulated electric security pan). As previously reported, PUCO Staff had recommended Dayton Power and Light "strongly consider" filing an electric security plan as an alternative to the Market Rate Offer.

Once a Market Rate Offer is approved, law does not allow the Standard Service Offer to be served under an electric security plan in the future. A Market Rate Offer requires the use of a competitive bid process to procure default service generation, while such competitive bidding is not required (but may be and has been used) under an electric security plan. A Market Rate Offer also requires a minimum five-year transition to fully market-based default service rates, while an electric security plan has no statutory mandate for a minimum transition period to market-based rates.

As first reported by Matters, the Dayton Power & Light Market Rate Offer would have established a 5 year, 5 month transition to full market pricing. During the transition (January 1, 2013 through May 31, 2018), a limited amount of Standard Service Offer (SSO) requirements would have been sourced through a competitive auction, with such rates blended with existing electric security plan (ESP) generation prices.

See prior story for full details on original MRO proposal

Dayton Power and Light asked that PUCO establish a procedural schedule such that a Commission decision on the forthcoming electric security plan application is issued on December 17, 2012.

Dayton Power and Light's current electric security plan expires December 31, 2012.

Dayton Power and Light said that its decision to withdraw the Market Rate Offer and file an electric security plan was, "made in view of a number of factors that DP&L reviewed with the parties at a meeting at the Commission's offices on September 5, 2012."