Delaware SOS Prices from Recent Auction LOWER Than 2013

In a contrast to recent default service procurements, Delmarva Power's Delaware procurement of SOS supplies for the period starting June 1, 2014 resulted in clearing prices lower than those from last year's RFP, as well as the prices from the 2010-11 auction (whose results are being rolled out of the portfolio for mass market customers)

The RFP results reflect the combination of two bid dates, the first of which occurred before the January 2014 extreme pricing.

Specifically, the Delmarva 2013-2014 SOS procurement, for one-third of residential and small commercial (RSCI) supplies for the 36-month period beginning June 1, 2014 and 100% of medium and large commercial (MGS, LGS, and GS-P) supplies for the 12-month period beginning June 1, 2014, resulted in load weighted average clearing prices as follows ($/MWh):

Customer Type       2013-14 RFP 
RSCI                   $74.48 
MGS                    $67.79 
LGS                    $62.81 
GS-P                   $64.00 

Prices do not reflect transmission, the procurement cost adjustment, renewable portfolio costs, and the reasonable allowance for retail margin.

In contrast, results from the 2010-11 procurement, whose contracts are being replaced (for mass market customers), and 2012-13 procurement are below ($/MWh):

Customer Type     2010-11 RFP     2012-13 RFP
RSCI                 $85.89          $76.77
MGS                    N/A           $78.16
LGS                    N/A           $73.95
GS-P                   N/A           $70.14

The 2013-14 residential/small commercial price of $74.48/MWh will be blended with the existing portfolio, with one-third of supply at the new price, one-third at the 2011-12 price of $83.02/MWh. and one-third at the 2012-13 price of $76.77/MWh

The lower 2013-14 RFP pricing was driven primarily by a decrease in capacity prices.

Nine bidders participated in the 2013-14 RFP. Winning bidders included:

AEP Energy Partners, Inc.
DTE Energy Trading, Inc.
Energy America, LLC
Exelon Generation Company, LLC
Hess Corporation
NRG Power Marketing, Inc.

The percent of load, by customer class, to be served by each supplier for the 2014-15 delivery year is below (including suppliers winning tranches in prior-year auctions for a portion of 2014-15 small customer load):

Supplier              RSCI     MGS     LGS     GS-P
AEP                           33.3%
Constellation        17.1%
DTE Energy Trading   16.7%
Energy America       10.8%
Exelon               10.8%    33.3%   100.0%
Hess Corporation     11.4%    33.3%           100.0%
Macquarie            11.2%
NextEra               5.6%
NRG                   5.4%
Shell                11.2%