Dayton Power & Light Proposes 10-Year Default Service Procurement Plan

Dayton Power & Light has filed a proposed electric security plan which would establish the procurement of Standard Service Offer supplies for the period June 1, 2017 to December 31, 2026

Dayton Power & Light would procure 100% of SSO load through competitive descending clock, slice-of-system auction for load-following, full-requirements service including energy, capacity, market-based transmission charges, market-based ancillary services, and renewable energy requirements. Firm NITS and non-market based ancillary services are not included in the SSO product and would be recovered via nonbypassable rider, as done currently

SSO contracts would generally be a mix of laddered 12, 24, and 36 month contracts, serving all customer classes, with all contracts starting on June 1. Varying term lengths would be used towards the end of the ESP term to accommodate the proposed December 31, 2026 end date.

Aside from an initial two auctions in October 2016 and February 2017, a single SSO auction would be held each February thereafter.

For the specific laddering and term length of the SSO auctions, click here

DP&L is proposing that the retail SSO rate be modified into an all-energy rate design for all tariff classes.

"This design will better align the cost recovery from SSO customers with how the energy is procured for those customers through the CBP [competitive bid plan] as power is procured from winning auction suppliers on a $/MWh basis," the company said.

DP&L is also proposing to include a cash working capital component to be in the rate derived from the resulting SSO auction clearing prices. A cash working capital component is appropriate to compensate the company for the revenue lag and expense leads associated with providing SSO service, DP&L said.

The SSO retail rate will be updated on an annual basis. DP&L’s annual filing will include the rate change as a result of the SSO auctions, but will also include a true-up for the previous 12 months over/under recovery and recovery of costs to administer and implement the auction.

To summarize, the SSO retail rate will include: 1) auction supply costs, 2) administrative costs, 3) reconciliation costs, and 4) cash working capital. Auction supply costs will compensate auction winners for delivery to serve SSO load. Administrative costs include CBP auction costs, CBP consultant fees, PUCO consultant fees, audit costs, and supplier default costs (if any). Reconciliation costs are any over- or under-recovery of auction supply costs and administrative costs. Cash working capital is required to compensate the company for the revenue lag and expense leads associated with providing SSO service.

DP&L will then adjust the SSO retail Rate for the commercial activities tax (CAT), and will adjust it for distribution losses based on tariff class. The rates will be on a standalone Standard Offer Rate (Tariff Sheet No. G10), and charged on a $ per kWh basis for all SSO load based on tariff class.

DP&L will continue to make a SSO heating discount available during winter months for residential heating customers. All residential customers, non-heating and heating, will be charged the same rate for all kWh during the summer months. Residential heating customers will be charged a discounted rate for all kWh during the winter months. A discount of 15.27% to the Standard Offer Rate will be applied to the winter usage of residential heating customers. Winter months continue to be the billing months of January, February, March, April, May, November, and December.

DP&L proposes an 80 percent load cap, on an aggregated load basis, across all SSO auction products for each auction date such that no bidder may bid on and win more tranches than the load cap.