FirstEnergy units seek Pennsylvania default generation supply

Several FirstEnergy (NYSE:FE) subsidiaries in Pennsylvania said Nov. 5 that they are seeking to buy power generation supply starting in June 2015.

Metropolitan Edison (Met-Ed), Pennsylvania Electric (Penelec), Pennsylvania Power (Penn Power), and West Penn Power utility companies have filed plans with the Pennsylvania Public Utility Commission (PPUC). The utilities seek to procure electric supply for customers who choose not to shop with alternate suppliers.

An auction process, managed by an outside company, will be used to secure the supply. The companies expect that the PPUC will rule on their Default Service Program petition in 2014.

The companies, which do not own any power plants, serve roughly two million customers in Pennsylvania. The utilities will seek generation supply through an auction process.

The procurement process will be managed by CRA International, (CRA), which is a global consulting firm with expertise in energy markets. Under the proposed plan, CRA will conduct auctions on a quarterly basis beginning October 2014, with generation prices calculated based on a blended average by customers’ class.

The process will ensure the confidentiality of information provided by bidders, which will be required to certify that they are creditworthy, acting independently of other bidders, and are making firm offers to provide generation service to customers.

The proposed program also includes a process for meeting state-mandated alternative energy standards, including a separate bidding process in order to meet a portion of the solar energy requirements through a request for proposal for two-year contracts for the purchase of solar Renewable Energy Credits.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.