SOS Auction Sees "Record Low" Pricing, Residential Prices Fall 20% vs. Replaced Contracts

Delmarva's latest auction for electricity Standard Offer Service (SOS) in Delaware saw "record lows" in pricing for all customer classes, a consultant said in an auction report

Residential and Small C&I prices (RSCI) for the auctions held during 2016-17 (for delivery starting January 1, 2017) were 20% lower than prices for tranches from the 2013-2014 auction, which are being replaced

The Delmarva 2016-2017 SOS RFP, for one-third of residential and small commercial (RSCI) supplies for the 36-month period beginning June 1, 2017 and 100% of medium and large commercial (MGS, LGS, and GS-P) supplies for the 12-month period beginning June 1, 2017, resulted in load weighted average clearing prices as follows ($/MWh):

Customer Type       2016-17 RFP 
RSCI                   $58.21
MGS                    $54.70
LGS                    $51.71
GS-P                   $50.20

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

In contrast, results from the 2013-14 RFP, whose contracts are being replaced (for mass market customers), and 2015-16 RFP are below ($/MWh):

Customer Type    2013-14 RFP   2015-16 RFP
RSCI               $74.48       $63.60
MGS                   N/A       $57.35
LGS                   N/A       $55.14
GS-P                  N/A       $55.82

The 2016-17 residential/small commercial price of $58.21/MWh will be blended with the existing portfolio, with one-third of supply at the new price, one-third at the 2014-15 price of $82.18/MWh, and one-third at the 2015-16 price of $63.60/MWh

The 2016-17 RFP saw six bidders participate. The winning bidders from the 2016-17 procurement were DTE, Exelon, and TransCanada

The percent of load, by customer class, to be served by each supplier for the 2017-18 delivery year is below (including suppliers winning tranches in prior-year auctions for a portion of 2017-18 small customer load):

Supplier          RSCI    MGS   LGS   GS-P
BTG Pactual       6.6%
DTE              13.0%
Exelon           35.1%    100%  100%  100%
TransCanada      45.3%