Massachusetts "Concerned" With Inadequate Bidder Participation in SOS RFPs, Will Open Investigation

The Massachusetts DPU is "concerned" with inadequate bidder participation in default service RFPs, and intends to open an investigation into the issue.

The DPU's statement was made in an order rejecting National Grid's request for approval of a holistic contingency proposal to address RFPs that do not attract adequate bids.

The DPU said that it would address such situations on a case-by-case basis for now. The DPU did approve National Grid's re-issuance of an RFP for the SEMA and WCMA zones after the initial RFPs did not attract adequate bids, but declined to approve National Grid's broader plans proposing to address potential similar situations in the future.

Notably, National Grid's contingency plan, which included re-issuance of an RFP or reliance on day-ahead ISO purchases, depending on the timeframe and situation, could have been triggered in situations where an RFP is deemed to have been negatively impacted by a "significant market event", in addition to applying to more tangible situations where a demonstrable lack of bidder participation occurred (click here for background).

"The Department is concerned with the industry-wide issue of inadequate bidder participation in Basic Service supply solicitations and with establishing appropriate responsive plans. Thus, in the near term, the Department intends to open an investigation into these and other issues pertaining to the procurement and pricing for Basic Service," the DPU said.

Various reasons cited for decreased bidder participation, which has plagued several New England default service procurement recently, include concerns regarding ISO-NE winter reliability program cost allocation, and lingering effects of the polar vortex and a repeat of such conditions given constraints in New England.

Docket 14-BSF-D2