PECO Procurement For Default Supply

FAQ Archives - DSP III - September 2015 Solicitation

The FAQs on this page are no longer relevant, as they are from past solicitations. These FAQs are posted here only for reference purposes. Do not rely on the information provided on this page for the current solicitation.

FAQ-1157:
There is a typographical error in the PV obligation for the 6/1/2017 to 5/31/2018 Reporting Period in Appendix E to the Uniform SMA. Can you please correct this?

PECO has posted a revised version of Appendix E to the Uniform SMA to correct for this typographical error. The PV obligation for the 6/1/2017 to 5/31/2018 Reporting Period has been corrected and is now 0.3400% in accordance with AEPS Requirements. The Revised Appendix E is posted beneath the Uniform SMA on the Supplier Documents page of the RFP website here:

http://pecoprocurement.com/index.cfm?s=supplierInformation&p=documents

09/09/2015 in Contract
FAQ-61:
Please provide the steps and calculations that PECO uses to calculate the Capacity Obligation for a non-interval customer.

PECO does not calculate a capacity obligation for customers. Instead, PECO calculates Peak Load Contributions (PLC), which are used by PJM to calculate the capacity obligation. For details on how PJM converts PLCs to a capacity obligation please contact PJM directly.

Please see the presentation below provided by PECO detailing the PLC calculation. Please see pages 9-17 for examples of non-interval accounts and pages 18-21 in regards to lighting accounts.

PLC Presentation_1-1-2015.pdf

Please note that some commercial AMI metered customers will be treated as interval customers for this summer.

09/01/2015 in Data
FAQ-60:
What PJM line items are covered on the Delegation of Authority that the winning bidder must sign as part of the confirmation process?

A copy of the Form of Declaration of Authority ("DOA") that winning suppliers must sign is provided as Exhibit III to the Uniform SMA. For the line items that winning suppliers will agree to in the DOA please see Appendix D. The Uniform SMA is posted on the Supplier Documents page of the RFP website:

http://pecoprocurement.com/index.cfm?s=supplierInformation&p=documents

08/31/2015 in Contract
FAQ-59:
On the PA state website for competitive retail power (www.papowerswitch.com), it states: "Gross receipts tax is paid by both electric distribution companies and electric generation suppliers on the basis of the company's or the supplier's gross receipts from the sale of electric generation supply within the Commonwealth of Pennsylvania. Electric distribution companies and electric generation suppliers include the GRT as part of the cost of electric generation supply." For the purposes of the RFP, are the winning bidders considered "electric generation suppliers" subject to the Gross Receipts Tax?

No, PECO alone is subject to Gross Receipts Tax in regards to providing electric generation service to Default Service customers. For additional information on taxes under the Uniform SMA, please see Section 16.9.

08/31/2015 in Contract , General
FAQ-58:
Are DS Suppliers required to have a retail electricity license within the Commonwealth of Pennsylvania in order to qualify as a DS Supplier?

No, it is not a requirement under the Uniform SMA for suppliers to have a retail electricity license within the Commonwealth of Pennsylvania. When the PaPUC approves the results of a solicitation, it approves the bid prices that will determine retail rates and the winning suppliers that will provide supply to meet the load of Default Supply customers.

08/27/2015 in Contract
FAQ-57:
Regarding final load settlement, historical Default Supplier’s responsibility is hourly default service load * (1- deration factor) * load share (# of tranche * tranche size). How is UFE allocated to each customer class (RES/SC/MC/LC&I)? Does the UFE need to be derated?

As described in the Data Description Document currently posted on the RFP website, PECO allocates Unaccounted For Energy (“UFE”) to all Load Serving Entities (“LSEs”) in PECO’s zone (i.e., to Electric Generation Suppliers or “EGSs” as well as Default Service Suppliers that are LSEs) by Customer Class every month, based on each Class’ load-ratio share. As a result, the UFE attributable to a particular Customer Class is different in every hour and is based on the Class’ hourly load share of PECO’s total hourly load across all Classes. Note that PECO only allocates UFE in the following manner: Prior to March 2015 UFE is allocated to monthly-metered customers and not to hourly/interval metered customers. Hourly energy values developed from interval or recorder meters do not include UFE. For non-interval metered customers, UFE amounts do not need to be added to the historical hourly loads posted to the Data Room since they already include UFE. Starting in March 2015 UFE is allocated to all customers, including hourly/interval metered customers.

Default Suppliers are responsible for a percentage of the hourly energy requirements for a Class, which include distribution losses, transmission losses, and UFE. PJM’s settlement methodology includes billing adjustments for UFE, which can be positive or negative. The energy volumes, including UFE, will be de-rated for transmission losses in accordance with PJM’s settlement methodology and implementation of marginal transmission losses. The PJM hourly de-ration factors and the hourly UFE values are available separately on the Data Room page on the RFP website.

08/07/2015 in Data
FAQ-56:
In order to accurately represent delivered hourly load volumes, should the hourly load data posted in the Data Room be adjusted with the UFE data also posted?

Please refer to the data description document available in the Data Room here, which states “PECO allocates UFE to all Load Serving Entities in the PECO Zone (i.e., to EGS and default service Load Serving Entities) each month based on load-ratio share.” Note that PECO only allocates UFE in the following manner: Prior to March 2015 UFE is allocated to monthly-metered customers and not to hourly/interval metered customers. Hourly energy values developed from interval or recorder meters do not include UFE. For non-interval metered customers, UFE amounts do not need to be added to the historical hourly loads posted to the Data Room since they already include UFE. Starting in March 2015 UFE is allocated to all customers, including hourly/interval metered customers.

08/07/2015 in Data

FAQ-55:
Please clarify if each customer class, rate schedule, and strata is monthly-metered or interval-metered.

PECO is required to install interval metering for their Large Commercial & Industrial customers. AMI metering is currently in the process of being installed for other classes that are metered. The table below provides the end state at full deployment. Note that only unmetered service are marked “N”.

RATE_CLASS	STRATA	Interval Metered
AL	177	N
EP	161	Y
GS	101	Y
GS	107	Y
HT	151	Y
PD	157	Y
POL	173	N
R	111	Y
R	112	Y
R	113	Y
RH	121	Y
RH	122	Y
RH	123	Y
SLE	170	N
SLS	171	N
TL	175	N
TL	176	N

08/07/2015 in General , Data

FAQ-54:
What are the supply periods for the products available in the September 2015 Solicitation?

Table I-3 and Table 1-4 of the RFP Rules provides the schedule of procurement for products in each Solicitation. A product for purposes of the RFP is defined by three characteristics: a) the Class to which it contributes Default Supply; b) the length of the supply period; and c) the date at which the supply period begins. The products for all Classes procured in this September 2015 Solicitation include RES-12-Dec15, RES-24-Dec15, RES-17-Jan16, SC-12-Dec15, and MC-6-Dec15. The supply period, for example, related to the RES-12-Dec15 product is 12 months from December 1, 2015 through November 30, 2016.

08/07/2015 in General
FAQ-53:
What services are included in full requirements service?

Full requirements service includes, without limitation, energy, capacity, transmission (excluding Network Integration Transmission Service), ancillary services, AECs for compliance with the AEPs Act, transmission and distribution losses, congestion management costs, and such other services or products that are required to serve the specified percentage of Default Load for a Class (except for distribution service).

08/07/2015 in Contract

FAQ-52:
How much load will be procured under PECO’s Third Default Service Program (“DSP III”)?

The annual Peak Load Contribution related to the load of Default Service customers in a Class (“Default Load”) is available in Table I-2 of the RFP Rules available on the Supplier Documents page of the RFP website here:
http://pecoprocurement.com/index.cfm?s=supplierInformation&p=documents

This data is updated as of July 2015 and is provided in the table below for your convenience.

Class	Default Peak (MW)
Residential	2,249.83
Small Commercial	567.27
Medium Commercial	156.10
Large Commercial & Industrial	70.53

08/07/2015 in General

FAQ-51:
We won tranches in a previous solicitation under PECO’s third Default Service Program (“DSP III”). We rely on the financial standing of an RFP Guarantor and we have an executed Guaranty with PECO. If we win additional tranches in the upcoming solicitation under DSP III, is our RFP Guarantor required to execute a new Guaranty with PECO?

An Existing Default Supplier that has already executed a Guaranty with PECO under DSP III is not required to execute a new Guaranty if they win additional tranches in a subsequent solicitation under DSP III. Instead, the Default Supplier will amend the amount of the existing Guaranty to reflect the newly won tranches.

08/03/2015 in Rules
FAQ-50:
PJM implemented residual metered load pricing starting June 1, 2015. What is the new Pnode ID?

Starting on June 1, 2015, the applicable name and Pnode ID changed to Name: PECO_RESID_AGG, Pnode ID: 116472949.

08/03/2015 in Contract
FAQ-49:
What happens if my Pre-Bid Letter of Credit is not sufficient to support my Bids?

Please see paragraph VII.2.10 of the RFP Rules. The Independent Evaluator will determine for such RFP Bidder the greatest number of whole tranches that its Pre-Bid Letter of Credit is sufficient to support. The Independent Evaluator will strike a Bid from a Bid Form for any tranche that is not supported by the Pre-Bid Letter of Credit. The Independent Evaluator will remove a Bid first from the product where there is most competition, as measured by the ratio of the number of tranches bid to the number of tranches needed. For that product, the Independent Evaluator will start with the tranche that has the highest Bid. If more than one RFP Bidder submitted Pre-Bid Letters of Credit that are insufficient to support the number of tranches bid by each such RFP Bidder, the Independent Evaluator will first modify the Bid Form from the RFP Bidder whose Bid Form is received last.

08/03/2015 in Rules
FAQ-48:
Is a price on the Bid Form a price for a single tranche? Or does the price associated with the second tranche represent a price offered for two tranches?

Each price on the Bid Form is for a single tranche. A “Bid” is a price in $/MWh for one tranche of a given product.

08/03/2015 in Rules
FAQ-47:
In the Performance Assurance Letter of Credit, under item #2 of the Additional Terms and Conditions, is the word "assigned" meant to be used interchangeably with "transferred" or does it mean the assignment of proceeds?

The word “assigned” should be interpreted to refer to the Post-Bid Letter of Credit itself and the obligations of the issuer of the Post-Bid Letter of Credit, and not to refer to the proceeds of the Post-Bid Letter of Credit in the event it was drawn upon. Transferred and assigned are similar but not always identical concepts. The beneficiary frequently provides that the bank that issues a letter of credit cannot transfer the letter of credit or assign its obligations to another institution, since the beneficiary might not approve of the transferee or assignee.

08/03/2015 in Credit
FAQ-46:
What are the class average line losses for the Small Commercial, Medium Commercial, and Large Commercial & Industrial classes?

The transmission and distribution line loss percentages are provided in Rule 6.6 Line Losses for each rate class.

08/03/2015 in Data
FAQ-45:
Can I use the formula and the line loss percentage provided in Rule 6.6 of the Supplier Coordination Tariff document to calculate retail energy requirements for purposes of calculating Alternative Energy Portfolio Act (“AEPS”) obligations? For example, if the wholesale load is 100 MW for a specific hour, can I assume that retail load is approximately 90.65 MW (100 MW X (1 - the line loss percentage)?

The percentage and formula provided in Rule 6.6 Line Losses in the Supplier Coordination Tariff allows you to obtain an estimate of the delivered retail energy requirements for purposes of calculating Alternative Energy Portfolio Act (“AEPS”) obligations. Delivered retail energy requirements are approximately equal to wholesale energy requirements divided by [1+ the line loss percentage]. Using your example above where the wholesale energy requirement for an hour is 100MW, the delivered retail energy requirement would be equal to (100/[1+10.31%])=90.65MW when rounded to the nearest two decimal places. Note that this would not precisely match the AEPS obligations since a further adjustment for UFE and other factors would be necessary.

08/03/2015 in Data
FAQ-44:
Is the hourly load data posted in the Data Room for wholesale energy?

As stated in the data description document, the hourly load data provided in the Data Room on the RFP website includes applicable distribution and transmission losses. These values will be de-rated by PJM for marginal losses prior to energy settlement. PECO provides hourly marginal loss deration factors in the Data Room.

08/03/2015 in Data
FAQ-43:
Will the load data used for Settlement B with PJM use AMI/interval data for all PECO customer classes?

PECO is in the process of completing the deployment of Automated Meter Reading (AMI) for its Residential, Small Commercial, Medium Commercial and Large Commercial & Industrial (LC&I) Classes. PECO is now using AMI interval data for Settlement B for customers with AMI meters. AMI interval data for customers was included starting with the December 2014 Settlement B performed by the end of February 2015. For more details please see the Data Description and Backcasting Methodology documents, updated as of February 13, 2015, that are available on the Additional Data page of the Data Room on the RFP website here: http://pecoprocurement.com/index.cfm?s=dataRoom&p=additional

08/03/2015 in Data
FAQ-42:
What changes, if any, are there to Default Suppliers’ obligations for Meter Error Correction under DSP III?

The Default Supplier was the responsible party for Line Item 1250 Meter Error Correction under DSP II and continues to be responsible under DSP III. Starting with DSP III, under the PJM tariff, the total meter error correction costs will be allocated among all load-serving entities in PECO’s service territory instead of requiring that only Default Suppliers cover such costs. This change will affect the share of the total cost for which the Default Supplier will be responsible, but it does not affect the provisions that are specific to the Pennsylvania Default Service Supplier Master Agreement (“Uniform SMA”).

08/03/2015 in Contract
FAQ-41:
Apart from the deration factor, is there a distribution loss factor or a 500kV loss factor that has to be used to calculate the settlement load?

No, hourly load data provided in the Data Room on the RFP Web site includes applicable distribution and transmission losses.

08/03/2015 in Data
FAQ-40:
Please confirm the required Pre-Bid Letter of Credit amount for a tranche for the Medium Commercial Class.

In the first two (2) solicitations under the third Default Service Program (“DSP III”), PECO will solicit bids for the Medium Commercial (“MC”) Class for the procurement of full requirements service on a fixed-price basis. As such, for the first two (2) solicitations, the Pre-Bid Letter of Credit amount for the MC products is $250,000 per tranche. All RFP Bidders must, in their Part 2 Proposal, submit a Pre-Bid Letter of Credit in an amount of at least: $250,000 per tranche bid on products for full requirements service on a fixed-price basis; and $125,000 per tranche bid on a product for full requirements service with energy priced to the PJM day-ahead spot market. After the first two solicitations, and with appropriate notice to suppliers, PECO will either: (i) procure full requirements service on a fixed-price basis in the March 2016 Solicitation for the MC Class for a period of six (6) months and procure full requirements service on a spot-price basis in the September 2016 Solicitation for the MC Class for a period of six (6) months; or: (ii) procure full requirements service on a spot-price basis in the March 2016 Solicitation for the MC Class for a period of twelve (12) months. Once the MC Class has transitioned from full requirements service on a fixed-price basis to full requirement service with energy priced to the PJM day-ahead spot market, the Pre-Bid Letter of Credit amount for MC products will change to be $125,000 per tranche.

08/03/2015 in Credit , Rules
FAQ-39:
What is the exact percentage size of each tranche for the Residential Class under DSP III?

Under PECO’s first Default Service Program (“DSP I”), PECO procured 47 full requirements tranches for the Residential Class together representing 75% of the Residential Default Load. PECO procured blocks of energy to serve the remaining 25%. Throughout DSP II the blocks of energy procured under DSP I expired and were replaced by full requirements tranches. Due to decimal point limitations in PECO’s energy accounting and invoicing systems, each such full requirements tranche was added at a rounded value of 1.60%. Under DSP III, for the period June 1, 2015 to December 31, 2015, there will be 60 full requirements tranches for supply of the Residential Class, each at 1.60% or 95.8%/60. Starting January 1, 2016, the total number of full requirements tranches for supply of the Residential Class will be 62 and will not change for the remainder of the DSP III. The tranche size starting on January 1, 2016 will again be 1.60% or 99%/62.

08/03/2015 in Rules
FAQ-38:
For the remaining Residential Default Load served by PECO, will PECO pay for all of the cost of full requirements service or only the cost of energy and AECs?

In regards to the remaining Default Load, PECO will be a Load Serving Entity in PJM and will acquire all necessary supply through PJM-administered markets and will obtain sufficient Alternative Energy Credits (“AECs”) at market prices to satisfy any near-term obligations under the AEPS Act. Default Suppliers are not responsible for any of the costs related to the portion of the Default Load of the Residential Class served by PECO.

08/03/2015 in Rules
FAQ-37:
A 50 MW block remains part of the supply for the Residential Class until December 2015. Does the historical hourly Default Service Load data need to be adjusted for this volume?

Under PECO’s first Default Service Program (“DSP I”), PECO was responsible to serve 25% of the Default Load for the Residential Class, referred to as the “PECO Share”. PECO purchased Block Energy Supply to meet 80% of the PECO Share (e.g., 20% of the total expected seasonal energy requirements of the Default Load for the Residential Class). PECO balanced the difference between the blocks of energy and remaining load of the PECO share on an hourly basis through the hourly spot market for energy of PJM. As the purchased Block Energy Supply expires, these blocks have been replaced by full requirements tranches. Block Energy Supply that has not yet expired consists of 50 MW of base load due to expire on December 31, 2015. The historical hourly load data series provided in the Data Room on the RFP website have not been adjusted by the Block Energy Supply. These data series do not need to be adjusted because Default Suppliers of the Residential Class are responsible for a percentage of the hourly energy requirements for that Class.

08/03/2015 in General , Data
FAQ-36:
Where can I find a comprehensive list of historical default service rates for each customer class?

PECO posts a Default Service rate calculation model that translates the prices determined through this RFP into Default Service rates or “Price to Compare” ("PTC") by customer class since 2011. These PTCs are available on the Company website here: https://www.peco.com/CustomerService/CustomerChoice/Pages/PricetoCompare.aspx

Please scroll to the bottom of the page and open the drop down box labeled 'PTC Archive'. The PTC for the Residential class is provided under the header 'Residential' and PTC for the Small Commercial, Medium Commercial and Large Commercial and Industrial classes are provided under the header 'Commercial'.

08/03/2015 in Rates
FAQ-35:
Where can I find the static Load profile info for PECO?

The static load profile data is located on the "Additional Data" page in the Data Room on the RFP website here. PECO started applying this static load profile data to monthly-metered customers (those without interval meters) on January 1, 2011. Please note that from 2006 through 2010, PECO developed hourly load data by customer group for monthly-metered customers using other older profiles and will not be able to retrofit the new load profiles to the historical hourly load data that is provided in the Data Room. For additional information, please see page 3 of the Data Description Document available here.

08/03/2015 in Data
FAQ-34:
Are the names of winning RFP Bidders posted to the RFP Web site?

No, the names of winning RFP Bidders are not publicly available. The published results for each solicitation include the type of product procured, the supply period, the winning price, the tranche size and number of tranches procured for each product. Results of the solicitations held thus far are available on the Previous Results page of the RFP website.

08/03/2015 in General
FAQ-33:
The monthly hourly load data in the Data Room section of the RFP website lists load (MWh) which is separated by “EGS load”, “PECO Default service load”, and “Total Energy”. Which of these three data series are used for settlement purposes by PECO for customers that are not hourly metered?

Under PECO’s third Default Service Program (“DSP III”), each Default Service supplier is paid, in any given hour, on the basis of the share of the total Default Service load that the supplier is serving for each class in that hour. The supplier share is calculated based on the number of awarded tranches for each class times the percent size of each tranche. The hourly loads under the “EGS” category posted in the Data Room correspond to PECO’s retail customers who have elected to be supplied by an Electric Generation Supplier, and therefore do not belong to PECO DSP III load settlements, regardless of whether they are hourly metered or not.

08/03/2015 in Data
FAQ-32:
Is the historical hourly load data posted to the RFP website weather-normalized? How does PECO forecast load data? Does PECO forecast weather-normalized loads or is the monthly load forecast based on expected weather?

PECO does not make available forecasted data in the context of its Default Service Program RFP. The hourly load data posted to the RFP website is historical and not weather-normalized. Peak Load Contribution (“PLC”) values are based on the weather-normalized five coincident summer peaks from the prior year as per PJM methodology. PJM Manual 19 documents how peak load is weather-normalized. For more information on data series posted to the Data Room of the RFP website, please refer to the Data Description document.

08/03/2015 in Data
FAQ-31:
When are the solicitation results announced?

Within fifteen (15) days of the close of the solicitation, the Independent Evaluator releases the weighted average price as well as the percentage of load represented by each tranche for each product procured in that solicitation. When the results become available, the Independent Evaluator will make an announcement, and you will be able to access the results here: Background/Previous Results.

08/03/2015 in General
FAQ-30:
On what volumes are the percentages listed for Alternative Energy Portfolio Standards (AEPS) compliance based?

AEPS quantities are based on electric energy sold by an Electric Distribution Company (EDC) or Electric Generation Supplier (EGS) to retail electric customers. AEPS obligations are calculated based on the retail load, which is delivered energy at the retail meter and does not include marginal losses.

08/03/2015 in Data
FAQ-29:
What does EGS stand for in the Customer Count data file?

“EGS” stands for “Electric Generation Supplier”.

08/03/2015 in Data
FAQ-28:
Can you please explain the large, sudden jump in customer counts for both the TL traffic light counts and usage that begins in 2011?

All strata were changed to a new model on January 1, 2011. Some customers were reassigned to new strata at this time. A new tariff rate was effective 1/1/11, traffic lighting constant load (“TLCL”). Customers were migrated from small GS to TLCL in January 2011 (they were temporarily moved to GS 100 on exactly 1/1/11).

08/03/2015 in Data
FAQ-27:
Appendix E of the Uniform SMA, which deals with the Alternative Energy Portfolio Standards (AEPS) Obligations states: “...DS Supplier’s AEPS Obligation may be reduced by any AECs obtained separately by the Buyer and allocated to DS Supplier’s AEPS Obligation as shown on a Transaction Confirmation.” How does PECO determine to which sellers/tranches, if any, it allocates the AECs?

In the Uniform SMA, PECO will allocate Alternative Energy Credits (“AECs”) to winners of tranches in a solicitation according to the number of tranches of each product that the Bidder gets awarded in that solicitation. The allocated Tier I solar, Tier I non solar and Tier II AEC amounts per tranche and by type of product for a given solicitation are provided in the bidder information session presentation. Note that any AECs that PECO allocates to a Supplier’s AEPS Obligation remain the property of PECO and are not transferred to the Supplier.

08/03/2015 in Contract
FAQ-26:
In the PECO Data Room, in the Customer Counts file for the Residential rate class, the number of customers for the Residential Off-Peak rate decreases from 77,043 to 4,376 between November 2012 and December 2012. Please confirm that this data is accurate and explain the reason for this decrease.

The customer account information for the Residential Off-Peak service (“OP”) rate is accurate. This rate was gradually phased out in 2012 and completely retired in 2013. The same residential customer may have one or multiple “rate counts”, each representing the rate the customer is being billed under. Upon expiration of Residential Rate OP rate, the total customer accounts did not change, but the number of rate combinations for any given customer account decreased. The energy usage that was previously recorded and billed under the Residential OP rate was combined with usage under the accompanying rate for the same customer account.

08/03/2015 in Data
FAQ-25:
Does a Bidder need to provide an updated rating report for the Bidder’s Guarantor with the Part 1 Proposal if there are no changes to the credit ratings since the last solicitation in which the Bidder was qualified?

If the credit ratings for the entity on whose financial standing the RFP Bidder relies have not changed, the RFP Bidder is not required to provide the most recent rating report with the Part 1 Proposal. If the credit ratings have changed since the last solicitation in which the Bidder was qualified, the Bidder must provide the updated ratings as part of Section 2 of the Short Part 1 Form in this solicitation.

08/03/2015 in Credit , Qualification
FAQ-24:
Appendix D of the Uniform SMA shows that PJM Billing Items 1240 (Day-ahead Economic Load Response) and 1241 (Real-time Economic Load Response) are the responsibility of the Seller. Is there any historical day-ahead and real-time Economic Load Response data available?

PJM’s bill associated with settlement of Economic Demand Response for retail customers is provided directly to each Default Supplier and as a result PECO does not have access to this data.

08/03/2015 in Data
FAQ-23:
Is hourly load data available for PECO’s Residential and Small Commercial customers?

Historical hourly load data is available for PECO’s Default Service Residential, Small Commercial, Medium Commercial, and Large Commercial & Industrial customers in the Data Room on the RFP website located here. For additional information regarding hourly load data and all other available data please see the data description document.

08/03/2015 in Data
FAQ-22:
Does an RFP Bidder need to reduce the Residential Class Default Service Load by the Block energy supply purchased under the first Default Service Program (“DSP I”) in order to assess the expected hourly load patterns?

The Block energy supply procured by PECO under the DSP I is used to meet a share of the Residential Class Default Load. PECO balances the blocks of energy and load of the PECO share on an hourly basis. Under its second Default Service Program (“DSP II”) and again under DSP III, PECO will procure full requirements service for each Customer Class, where each tranche is defined as a fixed percentage of Default Load of that Class. A bidder participating in DSP III does not need to subtract block energy purchases from the historical hourly Default Service Load data in order to assess the expected hourly load pattern because the energy block represents a fixed percentage of the load across hours and therefore the load shape is unaffected by the size of the DSP I energy blocks.

08/03/2015 in Contract , Data
FAQ-21:
How will PECO allocate Unaccounted For Energy (“UFE”) once all customers have hourly meters installed?

Starting with the Settlement B for March 2015, PECO began allocating Unaccounted For Energy (“UFE”) in proportion to each customer’s metered hourly load data.

08/03/2015 in General
FAQ-20:
Is it mandatory to participate in the bidder information session?

No, it is not mandatory for a supplier to attend the Bidder Information Webcast in order to participate in a solicitation. Prospective suppliers are encouraged to attend. The Bidder Information Webcast will provide an overview of the products available, the load caps, the terms of the contract, the qualification process, and the comment process for the Letters of Credit.

08/03/2015 in General
FAQ-19:
Appendix E of the Uniform SMA states that the Alternative Energy Credits (AECs) obtained separately by PECO and allocated to Seller’s Alternative Energy Portfolio Standard (AEPS) Obligation will be shown in the Transaction Confirmation. How will this information be provided in the table at the end of the Transaction Confirmation?

The Transaction Confirmation will list the number of AECs already procured separately by PECO, which will be subtracted from the amount of AECs Default Suppliers must provide. The amount of AECs that will be allocated for this purpose will be provided in the Bidder Information Webcast Presentation. The presentation will be posted to the Supplier Documents page of the RFP website.

08/03/2015 in Contract
FAQ-18:
In Exhibit 1, Transaction Confirmation, included in Appendix C of the Uniform SMA, there are blanks to provide the average costs for the Alternative Energy Credits (AECs). Will PECO provide these numbers to a winning bidder or are these numbers to be provided by the Seller? Also, why are these prices required by PECO?

Default Suppliers are responsible for providing the AECs necessary for PECO to meet its obligations under the Alternative Energy Portfolio Standard (AEPS) Act during the term of the Uniform SMA. The obligations of Default Suppliers in this regard are reduced by the AECs procured separately by PECO. The blanks in the Transaction Confirmation are for the Default Supplier to provide a price for each type of AEC (Tier I, Tier I Solar, and Tier II) that is included in the RFP Bidder’s winning Bids. As specified in the RFP Rules (see Paragraph V.1.2), each such price must be greater than $0/AEC. The RFP Bidder will be required to certify in its Part 2 Proposal that it will comply with this obligation. PECO must collect this information with respect to its Default Supply in order to meet certain state reporting obligations with the Pennsylvania AEPS Procurement Administrator.

08/03/2015 in Contract
FAQ-17:
Can a Default Supplier switch between a Letter of Credit and a guaranty to meet the creditworthiness requirements during the term of the contract?

A Default Supplier can meet the creditworthiness requirements of Article 6 of the Uniform SMA by posting cash, a Letter of Credit, or a guaranty. PECO does not determine for the Supplier which of the three particular instruments the Supplier posts as security. The Default Supplier can switch between a Letter of Credit and a Guaranty after review and approval by PECO.

08/03/2015 in Credit
FAQ-16:
What is the Standard Offer Program?

Under the Standard Offer Program currently offered by PECO, participating Electric Generation Suppliers (EGSs) submit binding, fixed-price bids each month to provide electric generation service to residential and small commercial customers for a 12-month supply period. The lowest offer is presented on PECO's website and customers can participate in the program on an opt-in basis and can switch back to default service at any time. Bids submitted by EGSs must be priced at least 7% below PECO's default service rate at the time of the offer.

08/03/2015 in General
FAQ-15:
Are contingent bids allowed?

No, contingent bids are not allowed under the RFP Rules. In the Part 2 Proposal the RFP Bidder must certify that any Bid on any product submitted in response to this RFP for this solicitation is binding until six (6) business days after the Bid Date and constitutes a binding and irrevocable offer to provide service under the terms of the Uniform SMA at the price specified in the Bid.

08/03/2015 in Rules
FAQ-14:
What criteria are used by the Commission when determining whether to accept or reject the results of winning Bids?

In advance of the Bid Date for each solicitation, the Independent Evaluator (“IE”) provides a confidential report to the Commission with visible market prices for components of the full-requirements products available and any relevant changes in broad trends in the wholesale markets since the previous solicitation. This report can be used by the Commission to provide context when reviewing the results of the solicitation. The results of the solicitation are provided to the Commission on the first business day after the Bid Date, when the IE sends a full factual, confidential report to the Commission including the winning Bids determined during the evaluation and other appropriate data and statistics. The Commission has one (1) business day to consider this report and to approve or reject each of the winning Bids. If the Commission does not act within one (1) business day, the winning Bids are deemed to be approved. To date, the results for all products procured in each of the nine (9) solicitations held under DSP I, each of the five (5) solicitations held under DSP II, and the first solicitation under DSP III were approved with the following exceptions: Under DSP II, the Commission rejected all seven (7) winning Bids for the 24-month fixed-price products for the Residential Class solicited in the January 2014 Solicitation. Under DSP I, the Commission rejected five (5) of the twenty-six (26) winning Bids received for the 17-month spot-priced product for the LC&I Class solicited in the January 2010 Solicitation.

08/03/2015 in General
FAQ-13:
Which transmission charges are Default Suppliers responsible for?

Appendix D to the Uniform SMA provides the PJM Billing Statement line items, including transmission charges, and the responsible party (Buyer or Seller) for each item.

08/03/2015 in Contract
FAQ-12:
Who can sign the certifications required for the Part 1 Proposal?

Please see Paragraph III.1.13 of the RFP Rules. For a given solicitation, all representations and certifications required by the RFP, including those required for the Part 1 Proposal and Part 2 Proposal, must be made by a single individual who serves as Officer of the RFP Bidder. An Officer of the RFP Bidder is an individual authorized to undertake contracts (including the Uniform SMA) and bind the RFP Bidder.

08/03/2015 in Rules
FAQ-11:
Does the Commission require that all tranches for a product are filled in order to approve the results? Can the Commission approve some and not all of the winning Bids received?

As stated in Paragraph I.3.5 of the RFP Rules, the Commission must approve or reject each of the winning Bids identified by the Independent Evaluator. This means that it is possible that not all winning bids are approved in a given solicitation. For example, in the January 2010 Solicitation under the first Default Service Program (DSP I), the Commission rejected five (5) of the twenty-six (26) winning Bids received for the 17-month spot-priced product for the LC&I Class. The remaining 12 tranches for the LC&I Class were not procured. For more information please see the Fall 2010 Solicitation Results available on the RFP website here.

08/03/2015 in Rules
FAQ-10:
Are Default Suppliers responsible for any additional costs associated PJM’s Capacity Performance Product?

On June 9, 2015, FERC approved PJM’s Capacity Performance Updated Proposal (“Capacity Proposal”). The Capacity Proposal calls for the creation of a new capacity product designed to provide revenues to supply-side resources that take extra steps to ensure operational certainty during times of extreme stress on the bulk electric system. More information is available in Docket Nos. ER15-623-000, EL15-29-000, ER15-623-001 and EL15-41-000 and in PJM’s news release:
http://www.pjm.com/~/media/about-pjm/newsroom/2015-releases/20150610-ferc-approves-capacity-performance.ashx

Bidders and Default Suppliers are entirely responsible for investigating potential market changes in PJM and for any other circumstances or factors that may affect their evaluation of providing full requirements to PECO’s Default Service customers. As stated in the Pennsylvania Default Service Supplier Master Agreement (“Uniform SMA”), Default Suppliers are Load Serving Entities in PJM responsible for full requirements service including, without limitation, energy, capacity, transmission (excluding Network Integration Transmission Service ("NITS")), ancillary services, applicable losses, congestion management costs and other services or products as may be required to serve the Default Load for a Class. In particular, please see Paragraph 2.2(a) of the Uniform SMA, which states that an obligation of the Default Supplier is “To procure those services provided by the PJM OI and to perform such functions as may be required by the PJM OI that are necessary for the delivery of DS Supply required hereunder.” Additionally, please see Paragraph 2.5(b) which states “If the applicable provisions of the PJM Agreements referenced herein, or any other PJM rules relating to the implementation of this Agreement, are changed materially from those in effect on the Effective Date, both Parties shall cooperate to make conforming changes to this Agreement to fulfil the purposes of this Agreement, including the DS Supplier’s responsibility for changes in PJM products and pricing during the Term.” Thus, to the extent that PJM introduces a change to its capacity market structure in the form of a Capacity Performance Product, Default Suppliers as Load Serving Entities are responsible for any increase or decrease in capacity costs that would result.

08/03/2015 in Contract , General
FAQ-9:
Is cash an acceptable form of pre-bid security?

No, cash is not an acceptable form of pre-bid security. The RFP Bidder must either use the Standard Pre-Bid Letter of Credit available on the RFP website here, or a Pre-Bid Letter of Credit that incorporates only those modifications to the Standard Pre-Bid Letter of Credit accepted as a result of the evaluation of the Part 1 Proposals. With its Part 1 Proposal, an RFP Bidder may request modifications to the Standard Pre-Bid Letter of Credit that are non-material in nature, or that are advantageous to both PECO and the RFP Bidder. An RFP Bidder requests modifications to the Standard Pre-Bid Letter of Credit by submitting a Draft Pre-Bid Letter of Credit substantially in the form of the Standard Pre-Bid Letter of Credit indicating clearly any and all modifications to the Standard Pre-Bid Letter of Credit using tracked changes in Microsoft Word. All approved modifications to the Standard Pre-Bid Letter of Credit are posted at the bottom of the Supplier Documents page of the RFP website here. Each RFP Bidder may use any of the approved modifications, regardless of whether the RFP Bidder itself or another RFP Bidder proposed the modification.

08/03/2015 in Rules
FAQ-8:
If the State of Pennsylvania increases the AEPS obligation during DSP III, is the Default Supplier responsible for the incremental cost?

Yes. Please see Appendix E of the Pennsylvania Default Service Supplier Master Agreement (“Uniform SMA”) which states, “If AEPS requirements change by law or any other reason, DS Supplier shall be responsible for providing the credits at its expense in order to comply with its obligations under Full Requirements Service.”

08/03/2015 in Rules
FAQ-7:
Can you provide a redline of the changes between the Pennsylvania Default Service Supplier Master Agreement for PECO’s third Default Service Program (“DSP III”) and the Default Service Program Supply Master Agreement ("Default Service SMA") used for DSP II?

While a redline of the two documents could be generated, it would not serve the purpose of illustrating key differences between the two documents. Although the allocation of risks and responsibilities in the Uniform SMA is generally consistent with that of the prior Default Service SMAs from DSP I and DSP II, the structure of the document has changed substantially. Thus, a redline would show the differences in the structure rather than highlighting key differences in the provision.

08/03/2015 in General
FAQ-6:
Can you please highlight the key differences between PECO’s second Default Service Plan (“DSP II”) and PECO’s third Default Service Plan (“DSP III”)?

For a summary of relevant changes, please review the PECO bidder information presentation from the March 2015 RFP posted to the Document Archives section of the Archives page of the RFP website here. RFP Bidders should also review the governing documents listed on slide 2 of the presentation. Under DSP III, PECO will continue to procure full requirements service for the same four (4) customer classes. Some of the key differences between the two programs include, but are not limited to:

1) Products for the medium commercial class will transition from a fixed-price to a spot-price basis (see slide 8 for more details)
2) The proposal process will now be conducted almost completely online (see slide 14 and the section Completing and Submitting the Online Form starting on slide 40)
3) PECO will use a new contract, the “Uniform SMA”, that was developed through the uniform procurement process envisioned by the Commission (see slide 23 for key differences)
4) The Part 2 Proposal requirements have changed. RFP Bidders are no longer required to submit the signed Uniform SMA and guaranty with the Part 2 Proposal (see slide 51 for the new schedule)

08/03/2015 in General
FAQ-5:
Is it acceptable to rely on the financial standing of a foreign Guarantor?

Yes, RFP Bidders may rely on the financial standing of a Foreign Guarantor. Please see Paragraphs IV.7. and V.5. of the RFP Rules for additional requirements applicable to RFP Bidders with Foreign Guarantors. The RFP Rules are available on the Supplier Documents page of the RFP website here.

08/03/2015 in Rules
FAQ-4:
Did PECO propose purchasing block energy products in its Default Service Program?

In its petition for its third Default Service Program ("DSP III"), PECO proposed to procure full requirements service for its four (4) customer classes. The use of full requirements service was approved by the Commission in its Order dated December 4, 2014.

08/03/2015 in General
FAQ-3:
When did the Commission render a decision on PECO's third Default Service Program ("DSP III")?

The Pennsylvania Public Utility Commission (“PaPUC” or “Commission”) rendered a decision on PECO’s third Default Service Program DSP III (Docket No. P-2014-2409362) in its Order dated December 4, 2014. PECO's petition for DSP III and related filings with the PaPUC, as well as PaPUC orders, are available on the Regulatory Process page of the RFP website: http://www.pecoprocurement.com/index.cfm?s=background&p=regulatoryProcess

08/03/2015 in General
FAQ-2:
Is the date for the next solicitation finalized yet?

Yes, the Bid Date for the September 2015 Solicitation, the second solicitation under PECO’s current Default Service Program (“DSP III”), is Wednesday, September 9, 2015. The updated RFP Schedule is attached and is also available on the Calendar page of the RFP website.

07/09/2015 in General
FAQ-1:
Where can I access the list of winners from the previous solicitations?

The list of winners in previous solicitations is not available. Within fifteen (15) days of the close of the solicitation, the Independent Evaluator releases the weighted average price as well as the percentage of load represented by each tranche for each product procured in that solicitation, in accordance with Paragraph VII.3.17 of the RFP Rules. When the results become available, the Independent Evaluator will make an announcement, and you will be able to access the results here: Background/Previous Results.

07/09/2015 in Rules