Pennsylvania Code › Title 52 - PUBLIC UTILITIES › Part I - Public Utility Commission › Subpart C - Fixed Service Utilities › Chapter 69 - GENERAL ORDERS, POLICY STATEMENTS AND GUIDELINES ON FIXED UTILITIES › DEFAULT SERVICE AND RETAIL ELECTRIC MARKET-STATEMENT OF POLICY › Section 69.1807 - Competitive bid solicitation processes

Current through Register Vol. 54, No. 28, July 13, 2024
The following guidelines will apply to competitive bid
						solicitation processes:
(1) DSPs
					 should use standardized request for proposal documents and supplier master
					 agreements approved by the Commission for use in the default service
					 procurements. The Commission will review these documents and agreements on a
					 regular basis and revise them when appropriate after consultation with
					 stakeholders. Revisions to these documents will not be applied retroactively to
					 existing contracts.
(2) The public
					 interest would be served by the adoption of uniform criteria and processes for
					 bidder qualification.
(3)
					 Competitive bid solicitations should be structured along customer classes,
					 consistent with the groupings identified in §
											69.1805 (relating to electric
					 generation supply procurement). Bids should be solicited for tranches of load
					 within each customer class. Slice of system bid designs should not be utilized.
					 However, DSPs may allow individual tranches to be stratified by soliciting
					 separate bid prices for residential, commercial and industrial segments when
					 there are too few customers to organize tranches along the groupings identified
					 in § 69.1805.
(4) The
					 Commission finds that a clearly optimal bid solicitation model does not exist
					 at the current stage of wholesale market development. DSPs may utilize various
					 competitive bid solicitation approaches, including request for proposals that
					 result in the submission of sealed bids and real time auctions in which energy
					 suppliers compete with each other for tranches of customer load.
(5) DSPs are encouraged to coordinate their
					 competitive bidding solicitation schedules to minimize conflicts that might
					 negatively affect the ability of suppliers to participate in multiple
					 procurements. DSPs should coordinate their bid conferences and bidding dates to
					 facilitate bid participation and economies of scale, yet also providing
					 opportunities for additional wholesale bidding over reasonable time
					 intervals.
(6) The Commission's
					 objective is to review the results of competitive bidding processes in a manner
					 sensitive to market dynamics but that also allows it to discharge its statutory
					 obligations. The Commission recognizes that bid prices may be negatively
					 affected by the length of time taken for Commission review. In the default
					 service regulations, the Commission has reserved a period of 1 business day to
					 review the results of competitive procurements. As retail and wholesale markets
					 mature, and as other appropriate safeguards become available, the Commission
					 may elect to reduce the amount of time it uses to review bidding
					 results.
(7) The public interest
					 would be served by the adoption of uniform rules for the confidentiality of
					 competitive solicitation information. Supplier participation, bid prices and
					 retail rates may be impacted by protecting certain information, including, the
					 identity of winning and losing bidders, the number of bids submitted, bid
					 prices, the allocation of load among winning bidders, and the like. At the same
					 time, the Commission recognizes that there is a legitimate public interest in
					 knowing some of this information when there is no possibility of any prejudice
					 to ratepayer interests.
(8) The
					 competitive bid solicitation process will be monitored by an independent
					 evaluator. The Commission may direct that this evaluator administer competitive
					 bid solicitations to ensure the independence of the process. This independent
					 party will be selected by the DSP in consultation with the Commission. The DSP
					 may not have an ownership interest in the evaluator, and vice versa, and the
					 DSP should disclose any potential conflicts of interest on the part of the
					 evaluator during this consultation process. The Commission will review
					 conflicts of interest and may disqualify an evaluator to ensure the
					 independence of the position. The evaluator should have an expertise in the
					 analysis of wholesale energy markets, including methods of energy procurement.
					 The evaluator should monitor compliance with Commission orders relating to a
					 default service program, confidentiality agreements and other directives. The
					 evaluator should report all information it obtains to the Commission.
(9) Wholesale energy suppliers may include a
					 significant risk premium in their competitive bids to hedge against changes in
					 transmission rates during the term of a default service supply contract. The
					 public interest would be served by consideration of mechanisms that allow for
					 the tracking and automatic adjustment of transmission rates during the term of
					 the default service supply contract in order to reduce this premium.
This section cited in 52 Pa. Code §
													69.1801 (relating to scope); 52
						  Pa. Code §
													69.1802 (relating to purpose); and
						  52 Pa. Code §
													69.1803 (relating to
						  definitions).