52 Pa. Code § 54.186 - Default service procurement and implementation plans
(a) A DSP shall acquire electric generation
supply at the least cost to customers over time for default service customers
in a manner consistent with procurement and implementation plans approved by
the Commission.
(b) A DSP's
procurement plan must adhere to the following standards:
(1) The procurement plan shall be designed so
that the electric power procured under §
54.184(c)
(relating to default service provider obligations) includes a prudent mix of
the following:
(i) Spot market
purchases.
(ii) Short-term
contracts.
(iii) Long-term purchase
contracts, entered into as a result of auction, request for proposal or
bilateral contract that is free of undue influence, duress or favoritism of
greater than 4 years in length but not greater than 20 years. The default
service provider shall have sole discretion to determine the source and fuel
type. Long-term purchase contracts must be 25% or less of the DSP's projected
default service load unless the Commission, after a hearing, determines for
good cause that a greater portion of load is necessary to achieve least cost
procurement.
(A) EDCs or Commission-approved
alternative suppliers may offer large customers with a peak demand of 15
megawatts or greater at one meter at a location in its service territory any
negotiated rate for service at all of the customers' locations within the
service territory for any duration agreed upon by the EDC or alternative
supplier and the large customer.
(B) The Commission may determine that a
contract is required to be extended for longer than 20 years if the extension
is necessary to ensure adequate and reliable service at least cost to customers
over time.
(2)
A prudent mix of contracts shall be designed to ensure:
(i) Adequate and reliable service.
(ii) The least cost to customers over
time.
(iii) Compliance with the
requirements of paragraph (1).
(3) DSPs with loads of 50 megawatts or less
shall evaluate the cost and benefits of joining with other DSPs or affiliates
in contracting for electric supply.
(4) Procurement plans may include
solicitations and contracts whose duration extends beyond the program
period.
(5) Electric generation
supply shall be acquired by competitive bid solicitation processes, spot market
energy purchases, short- and long-term contracts, auctions, bilateral contracts
or a combination of them.
(6) The
DSP's supplier affiliate may participate in a competitive bid solicitation
process used as part of the procurement plan subject to the following
conditions:
(i) The DSP shall propose and
implement protocols to ensure that its supplier affiliate does not receive an
advantage in the solicitation and evaluation of competitive bids or other
aspect of the implementation plan.
(ii) The competitive bid solicitation process
shall comply with the codes of conduct promulgated by the Commission in §
54.122 (relating to code of
conduct).
(c) A
DSP's implementation plan must adhere to the following standards:
(1) A competitive bid solicitation process
used as part of the default service implementation plan must provide, to the
extent applicable and at the appropriate time, the following information to
suppliers:
(i) A bidding schedule.
(ii) A definition and description of the
power supply products on which potential suppliers shall bid.
(iii) Bid price formats.
(iv) A time period during which the power
will need to be supplied for each power supply product.
(v) Bid submission instructions and
format.
(vi) Price-determinative
bid evaluation criteria.
(vii)
Current load data for rate schedules or maximum registered peak load groupings,
including the following:
(A) Hourly usage
data.
(B) Number of retail
customers.
(C) Capacity peak load
contribution figures.
(D)
Historical monthly retention figures.
(E) Estimated loss factors.
(F) Customer size
distribution.
(2) The default service implementation plan
must include fair and nondiscriminatory bidder qualification requirements,
including financial and operational qualifications, or other reasonable
assurances of a supplier of electric generation services' ability to
perform.
(3) A competitive bid
solicitation process used as part of the implementation plan will be subject to
monitoring by the Commission or an independent third party evaluator selected
by the DSP in consultation with the Commission. A third party evaluator shall
operate at the direction of the Commission. Commission staff and a third party
evaluator involved in monitoring the procurement process shall have full access
to all information pertaining to the competitive procurement process, either
remotely or where the process is administered. A third party evaluator retained
for purposes of monitoring the competitive procurement process shall be subject
to confidentiality agreements identified in §
54.185(e)(6)
(relating to default service programs and periods of service).
(4) The DSP or third party evaluator shall
review and select winning bids procured through a competitive bid solicitation
process in a nondiscriminatory manner based on the price determinative bid
evaluation criteria set forth consistent with paragraph (1)(vi).
(5) The bids submitted by a supplier in
response to a competitive bid solicitation process shall be treated as
confidential pursuant to the confidentiality agreement approved by the
Commission under §
54.185(e)(6). The
DSP, the Commission and a third party involved in the administration, review or
monitoring of the bid solicitation process shall be subject to this
confidentiality provision.
(d) The DSP may petition for modifications to
the approved procurement and implementation plans when material changes in
wholesale energy markets occur to ensure the acquisition of sufficient supply
at the least cost to customers over time. The DSP shall monitor changes in
wholesale energy markets to ensure that its procurement plan continues to
reflect the incurrence of reasonable costs, consistent with
66 Pa.C.S. §
2807(e)(3.1)-(3.4) (relating
to duties of electric distribution companies).
(e) At the time the Commission evaluates the
plan and prior to its approval, in determining if the DSP's plan obtains
generation supply at the least cost, the Commission will consider the DSP's
obligation to provide adequate and reliable service to customers and that the
DSP has obtained a prudent mix of contracts to obtain least cost on a
long-term, short-term and spot market basis. The Commission will make specific
findings which include the following:
(1) The
DSP's plan includes prudent steps necessary to negotiate favorable generation
supply contracts through a competitive procurement process.
(2) The DSP's plan includes prudent steps
necessary to obtain least cost generation supply contracts on a long-term,
short-term and spot market basis.
(3) Neither the DSP nor its affiliated
interest has withheld from the market any generation supply in a manner that
violates Federal law.
Notes
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