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The FirstEnergy Ohio utilities filed a motion seeking changes to their PUCO-approved default service auctions under their current electric security plan (ESP V), which was approved by PUCO, with modifications, on May 15, 2024.

Excerpts from Motion To Update Auction Schedule And Request For Expedited Treatment:

“Pursuant to Rule 4901-1-12 of the Ohio Administrative Code, Ohio Edison Company, The Cleveland Electric Illuminating Company, and The Toledo Edison Company (the “Companies”) respectfully move the Commission: (1) to approve an updated Standard Service Offer (“SSO”) procurement auction schedule that aligns with the term of the Companies’ fifth Electric Security Plan (“ESP V”), whether that term is five years or three years pending the outcome of the Companies’ application for rehearing; and (2) to authorize the Companies to conduct their next auction between September 30, 2024, and October 31 2024 (the “October Auction”), at a date to be set subject to input from the Commission’s auction consultant, Bates White Economic Consulting (“Bates White”). The Companies propose to procure 25 tranches of a 12-month product in the October Auction, which will facilitate staggering and laddering for the delivery period of June 1, 2025, to May 31, 2026. To allow sufficient time for the Companies to conduct pre-auction activities such as pre-auction notice requirements and bidder information sessions for the proposed October Auction, the Companies request that this Motion be considered on an expedited basis pursuant to Rule 4901-1-12(C). The Companies certify that no parties have any objection to the request for expedited treatment. The grounds for this Motion are more fully set forth in the accompanying Memorandum.”

Excerpts from Memorandum In Support:
[***] “The Companies’ ESP V Application proposed an SSO auction schedule (“Proposed Auction Schedule”). 1 The Proposed Auction Schedule covered the period from June 1, 2024, through May 31, 2032, consistent with the Companies’ request for an eight-year ESP V term. The Proposed Auction Schedule included an SSO auction to occur in summer 2024 for a delivery period beginning June 1, 2025 (“Summer 2024 Auction”). 

The Companies request that the Commission approve two necessary modifications to the Proposed Auction Schedule. Specifically, the Companies seek: (1) to update their auction schedule to align its duration with the term of ESP V, whether that term is five years or three years, pending the outcome of the Companies’ application for rehearing; and (2) to conduct their next auction between September 30, 2024, and October 31, 2024, at a date to be set subject to input from Bates White. The Companies propose in the October Auction to procure 25 tranches of a 12-month product, which will facilitate staggering and laddering over the delivery period of June 1, 2025, to May 31, 2026.” [***]

As background, the FirstEnergy Ohio EDCs’ approved SSO procurement plan under ESP V contemplates a “summer” 2024 auction. Under the EDCs’ plan as originally filed, this summer 2024 procurement had contemplated purchasing a mix of 12 and 24-month products. However, in January 2024, while the ESP was pending, PUCO ordered the FirstEnergy Ohio EDCs to procure additional 24-month products for a June 1, 2024, start (rather than relying solely on 12-month products), changing the underlying portfolio that the EDCs now have as they ready the summer 2024 auction.

The FirstEnergy Ohio utilities requested that PUCO allow the utilities to conduct the summer 2024 procurement between September 30, 2024, and October 31, 2024 (now called the “October” auction).  The FirstEnergy Ohio utilities alleged that this delay is necessary, “[d]ue to the time necessary to implement the May 15, 2024, ESP V Order, including Commission-authorized changes to the Companies’ competitive bidding process, and to conduct pre-auction activities[.]”

Separately, the FirstEnergy Ohio EDCs have also, sought rehearing of PUCO’s ESP V decision, and in their rehearing request, the utilities are asking for a three-year ESP, rather than the five-year term adopted by PUCO and currently in place.

As a result, the FirstEnergy Ohio utilities proposed revised SSO procurement tranche targets for each of the 12- and 24-month products for both a 3-year ESP and 5-year ESP. Under all proposed changes, the default service portfolio would still be limited to only 12 and 24-month products.

Under both ESP term lengths, the EDCs now propose to procure 25 tranches of a 12-month product in the October 2024 auction, with 25 tranches of a 24-month product to be procured in a winter 2025 auction.

For the remaining SSO procurements under the current five-year ESP V, the FirstEnergy Ohio EDCs proposed conforming changes to the 12 and 24-month tranche mix to reflect prior changes directed by PUCO noted above.

Under a 5-year ESP, once existing laddering is completed, and excluding the final year which is unique to eliminate overhanging products, the FirstEnergy Ohio utilities generally propose that 24-month products will constitute 60-70% of the SSO portfolio with 12-month products constituting the remaining 30-40%, with the exact ratio varying within those bands in a given delivery year. These ratios are generally in-line with the currently approved bid plan, but the updates differ slightly in some years.

Motion to Update Auction Schedule and Request for Expedited Treatment and Memorandum in Support (07/31/2024)
Opinion & Order  (05/15/2024)
(Opinion & Order finding that the Application for an electric security plan filed by Ohio Edison Company, The Cleveland Electric Illuminating Company, and The Toledo Edison Company should be modified and approved, subject to the recommendations of Staff.)
Finding & Order  (03/20/2024)
(The Commission approves the results of the auction conducted on March 19, 2024, for the procurement of Ohio Edison Company, The Cleveland Electric Illuminating Company and The Toledo Edison Company’s standard service offer generation as part of its fifth electric security plan.)
24-0133-EL-UNC  (02/13/2024)
In the Matter of the Procurement of Standard Service Offer Generation as Part of the Fifth Electric Security Plan for Customers of Ohio Edison Company 

See also:

23-23-EL-SSO  (01/06/2023)
In the Matter of the Application of Ohio Power Company for Authority to Establish a Standard Service Offer.
23-0301-EL-SSO
In The Matter Of The Application Of Ohio Edison Company, The Cleveland Electric Illuminating Company, And The Toledo Edison Company For Authority To Establish A Standard Service Offer Pursuant To R.C. 4928.143 In The Form Of An Electric Security Plan.