Ohio Power Files Format, Schedule for Energy-Only Default Service Auction

Ohio Power Company (AEP Ohio) has proposed the rules and format for a competitive energy-only auction to supply a portion of default service load for the period August 1, 2013 through May 31, 2015, prior to the start of fully auction-based default service.

As previously reported, the results from the energy-only auction will be blended with AEP Ohio's tariffed Standard Service Offer rates.

Notably, AEP Ohio's proposal only addresses the energy auction procurement process, and not issues relating to reflecting, in retail rates, the cost of purchased energy at the wholesale auction clearing price. AEP Ohio noted that such "retail rate" issues remain pending before PUCO on rehearing, and AEP Ohio said that it plans to file an amendment or supplement to its application in a manner consistent any PUCO rehearing decision, which will detail the company's recovery of auction-related costs through retail rates.

AEP Ohio's proposal is for four descending clock, slice-of-system auctions for a portion of default service energy under three delivery periods. The supply to be procured will be divided into a number of tranches and each tranche will represent a fixed percentage of the hourly energy requirements of SSO customers during the delivery period.

The first auction will procure 10% of the hourly energy requirements of AEP Ohio's SSO customers. The delivery period will begin six months after AEP Ohio receives final orders from the Commission in both the ESP II and corporate separation dockets and will end on May 31, 2015 (AEP Ohio anticipates that this delivery period would start August 1, 2013, with the auction held in June 2013). There will be ten tranches available at the auction, each representing 1% of energy load.

The second auction, which will take place in January 2014, will procure 25% of energy load for a delivery period beginning June 1, 2014 and ending on May 31, 2015.

The third auction, which will take place in March 2014, will also procure 25% of energy load for a delivery period beginning June 1, 2014 and ending on May 31, 2015.

The fourth auction, which will take place in June 2014, will procure 40% of Energy Load for a delivery period beginning January 1, 2015 and ending on May 31, 2015

While the fixed percentage assigned to a tranche for the second auction onwards is expected to remain at 1%, it may be increased to foster bidder interest.

Case 12-3254-EL-UNC