Ohio Staff Proposes Third Option For Procuring Supply For Low-Income Electric Customers (RFP To Select Retail Supplier)

Due to stakeholder comments identifying deficiencies in two options previously proposed by Staff of the Public Utilities Commission of Ohio, Staff has proposed a third option to competitively procure supply to serve the load of electric percentage of income payment plan customers.

R.C. 4928.54, as updated on September 29, 2015, states that the state's director of development services shall aggregate percentage of income payment plan program (PIPP) customers for the purpose of establishing a competitive procurement process for the supply of competitive retail electric service for those customers. The process shall be an auction, and the PIPP price must be below the SSO rate

Staff previously proposed two alternatives to comply with this statute: conducting a separate auction, as part of the normal SSO auctions, for PIPP load; or implementing an administrative discount.

Click here for review of prior proposals

Staff has now proposed a third option to serve PIPP load: an RFP to select a single retail supplier to serve the applicable PIPP load.

Under this scenario, each EDU would hold its normally scheduled SSO auctions with no revisions to the auction process, other than providing notification to its SSO auction bidders that they may, or may not, be serving PIPP load as part of their supply requirements. While preparing for the SSO auction, the EDU would also issue an RFP for the supply of full requirements service for the EDU’s PIPP load. The RFP should be timed such that bids would be due as soon as possible after the current SSO auction, while also assuring that the potential suppliers would have knowledge of the current approved auction results prior to submitting their bids. The winning RFP bid should be selected and provided to the Commission for review and approval, as soon as practical after receipt of the PIPP bids.

Requirements of the RFP would include the following:

• Initially, for currently scheduled auctions and planned upcoming auctions, auction participants should be notified that their SSO supply requirements may, or may not, include PIPP load, depending on results of a PIPP load RFP. Subsequent to the upcoming SSO auction, the PIPP load associated with the tranches in the SSO auction should be put out for bid for a one year term of June 1, 2016 through May 31, 2017 (or for a one year term of June 1, 2017 through May 31, 2018, for subsequent planned upcoming auctions).

• Any portion of the PIPP load that has been awarded through a prior SSO auction would not be part of the RFP process and would be served under the same requirements as contracted.

• For future auctions in which 100% of the SSO load is auctioned at the start of an ESP term, 100% of the PIPP load would be put out for bid through an RFP for a one year term coinciding with PJM’s delivery year, and that would commence at the start of the ESP term. Subsequent PIPP load RFPs would be issued for 100% of the PIPP load on an annual basis.

• PIPP load would be served using the same form of contract as the SSO Master Supply Agreement, subject to revision of credit requirements associated with serving the smaller PIPP load and any other revisions necessary to establish its applicability solely for serving PIPP load.

• The RFP and supply contract would be provided to the Commission’s Staff and the Commission’s auction consultant for review and acceptance prior to commencement of the RFP process.

• Only registered CRES [competitive retail electric service providers] in Ohio would be eligible to participate in the RFP process, with their participation subject to any credit requirements the utility may have that would be necessary to assure supplier performance.

• For each RFP, there would be a single winning bidder that would serve the entire PIPP load for the specified PJM delivery year, except in those instances where a portion of the PIPP load has already been awarded through a previously held auction. A tie-breaking process (such as re-bidding between tied bidders) may be necessary to achieve this result.

• The winning bidder would be the bidder that provides the lowest price, subject to the requirement that the price must be below the weighted average SSO price that would be applicable during the delivery year. If there is no bid for a price below the weighted average SSO price that would be applicable during the delivery year, there would be no winning bidder and the requirement to serve the PIPP load would revert to the specific SSO suppliers in proportion to their winning SSO tranches and products for the specific PJM delivery year.

• Any supplier default in serving a PIPP product would result in that product being served proportionately by the specific SSO suppliers associated with that delivery year, at the SSO price associated with the defaulted product.

• Costs associated with administering the PIPP RFP would be included for recovery in the same manner as costs associated with the SSO auctions.

Case No. 16-247-EL-UNC