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As background the Connecticut Public Utilities Regulatory Authority (PURA) established a docket to develop, in consultation with the electric distribution companies (“EDCs”), the Consumer Counsel, and the Commissioner of Energy and Environmental Protection, a proposed amendment of the standard service procurement plan. Public Act No. 25-173, § 31(a)(2). 

The proposed amendments include among other things modifications regarding the frequency of competitive solicitations, implementation guidelines for a new provision that requires each electric distribution company to “develop and maintain the capacity to engage in dynamic market purchases for not less than twenty-five per cent of the standard service load,” and a risk mitigation provision related to dynamic market purchases. 

In this matter PURA’s procurement manager is required to submit the proposed amendment by February 15, 2026, and PURA shall review and approve (with modification as needed) the amended procurement plan. 

To facilitate PURA’s development of a procurement plan amendment, on September 19, 2025 PURA issued a notice of request for written comments asking interested stakeholders to file written comments concerning the below issues by September 26, 2025.  

Parties filed comments include:

Constellation Energy Services – Connecticut’s current standard service procurements have consistently provided price certainty and mitigated risks associated with energy, capacity, ancillaries, and environmental attribute prices for more than a decade. They have also consistently succeeded in attracting a substantial number of bidders throughout various market redesigns and cycles of commodity markets. The current standard service procurements in Connecticut are for fixed-price full requirements supply including energy, capacity, ancillaries, and environmental attributes. Wholesale suppliers bidding into these procurements are sophisticated and experienced market participants that can forecast, model, hedge, and properly manage the risks inherent with the various components that make up the full requirements supply, thereby mitigating the risk for Connecticut customers and providing them with price stability. 

“Connecticut EDCs, in contrast, do not have the expertise, experience, nor the needed infrastructure to model, hedge, or manage these risks. Hence, EDCs engaging in dynamic market purchases to serve a portion of the standard service load would result in sub-optimal outcomes (e.g. higher costs) for Connecticut customers as the risk of market volatility is placed directly on the captive ratepayer. Wholesale suppliers bear any losses resulting from volatile or increasing energy market prices in competitive markets versus EDCs that recover their losses from ratepayers.” 

“Further, dynamic market purchases result in significant price variability and false price signals as proxy pricing and reconciliations are separated from underlying market prices. As EDCs engage in dynamic market purchases, they will need to reconcile the difference between the proxy price and actual costs of full requirements electric service. Those reconciliations will result in standard service pricing that is not reflective of current market pricing. When there is a difference between the standard service price and market prices, risk of customer migration is elevated as customers attempt to save on their electricity bills.” 

“Due to the aforementioned reasons, it is not in the customers’ interests for EDCs to regularly engage in dynamic market purchases. Dynamic market purchases should be utilized as a last resort only after all other procurement avenues have failed to secure adequate supply. Doing so would ensure Connecticut customers receive the benefits of the current procurement structure and standard service prices are aligned with current market prices. If dynamic market purchases are limited to only those instances where adequate supply cannot be obtained through the current procurement process, the state can mitigate the risks inherent with dynamic market purchases such as price volatility and customer migration.” 

“Connecticut has a tiered procurement structure for standard service offers, wherein the supply for any six-month period is procured over four procurements encompassing a whole year. During the procurement period, and subject to PURA approval, the EDCs retain the discretion to determine the number of tranches awarded in each procurement and may also conduct additional procurements as necessary. The tiered procurement framework, combined with the flexibility provided to the EDCs, effectively mitigates volatility from market timing. This approach enables Connecticut customers to secure optimal pricing for full requirements supply without exposure to procurement at either the peak or trough of the commodity cycle. Engaging in dynamic market purchases negates this inherent benefit afforded to Connecticut customers via the tiered procurement structure.” 

“In addition to the current tiered procurement structure, Connecticut should procure supply for longer terms such as a one-year term for 20-50% of the standard service load. Laddering in one year terms along with six-month terms would provide additional price stability for Connecticut customers. If Connecticut decides to procure supply for longer terms, it should do so subject to all such procurements being market based and competitive. Also, the product terms should align with the market design. For example, the one-year procurements should be conducted for the terms where capacity prices are known. Additionally, if the procurement is for a combination of six-month and one-year terms, procure at least 50-80% of the supply through the six-month procurements to ensure alignment with market prices.”

OCC – Regarding Target Level of Dynamic Market Purchases Occ “believes setting a non-binding target for the level of dynamic market purchases is a prudent approach. This would give the procurement team a “soft” target that would be considered throughout the four bid days. Flexibility is one of the strongest tools of the procurement plan and we want to preserve that. One of the main purposes of laddered procurement is to smooth volatility, and dynamic purchases should not erode that by setting too high of a target. Having a “soft” or non-binding target allows the procurement team to increase or decrease the amount of dynamic market purchases in the event of a failed solicitation or better than expected full requirement service bids.”

“OCC also believes setting an initial target range of 0%-20% dynamic market purchases for each individual rate period would be a good starting point. Establishing a target gives stakeholders visibility into how much exposure to market prices they can expect, and it sets expectations without tying the procurement manager’s hands with rigid targets. A target range not only limits exposure to market volatility for customers but is also an amount that Eversource has historically been accustomed to managing. Next year (2026) will also be the first year that UI is employing dynamic market purchase capabilities, so keeping the amount relatively small should help the company get up to speed with management.”

“OCC appreciates the opportunity to provide comments on these written comment prompts. For all prompts, OCC’s general position is that before significant procurement plan changes are finalized, a thorough analysis should be done by an independent subject matter expert consultant similar to the 2012 Power Procurement Plan for Standard Service that was developed by the procurement manager in consultation with Levitan & Associates. If the intention of the Authority is for relatively small tweaks to the current procurement plan, mostly confined to dynamic market purchases, such an analysis is not required, but targeted quantitative analysis may still be warranted and help ensure the changes made will be beneficial.”

UI –  Reiterated “to effectively implement self-managed procurement strategies or dynamic hedging mechanisms, there must be a clearly defined process in place that is reviewed and approved by the CT PURA and its designated PM. Without such a framework, the Company 17 cannot responsibly or feasibly execute these strategies in a manner that ensures regulatory compliance, operational integrity, and ratepayer protection.” 

“UI recommends that any consideration of self-managed procurement or dynamic hedging be contingent upon the development and approval of a formal process that includes governance protocols, oversight mechanisms, and cost recovery assurances. The Company looks forward to further discussing these issues with PURA, docket Participants, and other stakeholders.”

12-06-02RE04
(PURA Review of Power Procurement Plan – Amendment Pursuant to Public Act 25-173)