PSC Orders Use of Two Year, Rather Than Three Year, Full Requirements Contracts For Residential, Small Commercial Default Service

The Delaware PSC recently adopted an order shortening the length of full requirements contracts procured for Delmarva's small customer electricity SOS from the current three years to two years, and the contracts will continue to be procured on a laddered basis.

The PSC ordered that, "Delmarva procure, via its currently approved reverse auction process, two-year laddered fixed price full requirement contracts for its RSCI [residential and small commercial & industrial] customers to replace the current three-year fixed price full requirement contracts upon the expiration of the current three-year contracts. During the transition, there may be contracts shorter than two years for the next several delivery years until all the contracts are two-year fixed price full requirement contracts. Delmarva and Staff will work collaboratively on a transition plan for the delivery year 2018 (which begins June 1, 2018), beginning with the tranche in 2017."

PSC Staff had recommended that the two-year contracts should be laddered to require that 50% of load is procured each year. While the PSC did order that the two-year contracts will continue to be laddered, the PSC did not specify that the laddering shall be in equal procurements of 50% each year.

In maintaining the current full requirements products, with a shorter laddering period, the PSC rejected a proposed portfolio approach which would have consisted of approximately 42% long-term (10 year) supply contracts, 28% spot market purchases, and 30% full requirements, two-year laddered contracts

Docket 14-0283