Breaking: FirstEnergy Ohio Settlement With PUCO Staff Would Set Blended Portfolio Default Service Procurement With 36-Month Contracts For EIGHT YEARS

The FirstEnergy Ohio utilities, PUCO Staff, and certain other parties have filed a non-unanimous settlement in FirstEnergy Ohio's electric security plan proceeding which would extend the program from a proposed 3-year term to an 8-year term

Consequently, the plan would set the default service procurement mechanism for the period June 1, 2016 to May 31, 2024

The settlement would adopt the use of a mix of 12, 24, and 36-month full requirements products, procured via descending-clock auction, proposed for the initial 3-year term over the extended 8-year term. Essentially, one-third of the SSO portfolio for any year would be served under contracts lasting 12 months, one-third would be served under contracts lasting 24 months, and one-third would be served under contracts lasting 36 months.

See the procurement schedule on page 27 of the settlement

The settlement would also adopt PPAs between the utilities and FirstEnergy Solutions, with nonbypassable cost recovery, and with products sold into the market (not used for default service). In addition to the FES PPAs, the settlement would add certain renewable PPAs to the PPA program.

In a news release, FirstEnergy said that the PPA program includes the Davis-Besse Nuclear Power Station in Oak Harbor, Ohio, the W.H. Sammis Plant in Stratton, Ohio, and a portion of the output of Ohio Valley Electric Corporation (OVEC) units in Gallipolis, Ohio, and Madison, Ind.

A typical residential customer using 750 kilowatt-hours of electricity per month could expect to pay a monthly average of about $3.25 more for the rate provision during the first full year of the ESP, FirstEnergy said

Furthermore, the settlement provides that the utilities, "will evaluate investing in battery resources contingent on Commission approval that all investments for such resources shall be rate-based."

See full settlement here for more details