PUCO Grants Relief To Allow AEP Ohio To Conduct Initial Default Service Auction For 2018 Supplies While ESP Case Remains Pending

The Public Utilities Commission of Ohio issued an order granting AEP Ohio interim relief for the company to procure a portion of default service supplies for the period beginning June 1, 2018, in the manner proposed in a pending electric security plan stipulation, prior to a final order on the overall ESP proceeding

Under the stipulation, whose provisions related to default service procurement is not expected to be contested, default service would exclusively be supplied through full requirements contracts procured via competitive auction, with (generally) one-third of the load served on 12-month contracts; one-third on 24-month contracts, and one-third on 36-month contracts.

Auctions are to be held each November and March. However, evidentiary hearings on the ESP are not scheduled to start until November 1, with the stipulation's first auction for 2018 supplies scheduled for November 2017.

AEP Ohio explained in its request for interim relief that, in order to ensure that its SSO obligation is met on and after June 1, 2018, the company's application proposes an auction schedule for the term of the extended ESP, including auctions to be conducted in November 2017 and March 2018, each of which would seek to procure 50 tranches through three separate products: 16 tranches of a 36-month product, 17 tranches of a 24-month product, and 17 tranches of a 12-month product.

In support of the motion for interim relief, AEP Ohio states that its proposal will avoid the procurement of all tranches in one auction, capture any favorable market conditions that may presently exist, and maintain consistency with the company's previous schedule with auctions occurring in March and November, which will minimize rate volatility for SSO customers and provide certainty for auction participants.

PUCO granted the interim relief as requested by AEP, and the November 2017 auction may be conducted in the manner proposed by AEP

"We note, however, that our approval of AEP Ohio's request to conduct an SSO auction in November 2017 should not be construed as pre-approval of the Company's application or the stipulation filed by the signatory parties. Further, nothing in this Entry should be construed as limiting or restricting the right of any party to these proceedings to oppose the stipulation," PUCO said