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On October 16, 2026 Staff of the Public Utilities Commission of Ohio (PUCO) filed a Stall Report regarding the September 18, 2026 application filed by the Dayton Power and Light Co. d/b/a AES Ohio for approval of a market rate offer.  As background, in its September 24, 2026 Entry, the Ohio Commission issued an order instructing Staff to “conduct an investigation and file a Staff Report and any applicable recommendations by October 16, 2026.

Based on its investigation and analysis, Staff recommends that the Application be approved, subject to Staff’s proposed modifications as identified below.

As a reminder, AES Ohio’s application focused on two primary proposals. First, AES Ohio proposed to continue the SSO auction process that has been in place for many years under AES Ohio’s existing and prior ESPs.  Second, AES Ohio proposed to remove data centers from the existing SSO auction process and create a separate SSO product exclusively for data centers.

The Application also raises two ancillary issues. First, AES Ohio seeks to amend its Emergency Electrical Procedures, Tariff Sheet No. D11, to account for PJM Interconnection’s (“PJM”) control over emergency procedures and to update outdated references.5 Second, AES Ohio is requesting authority “to defer for future recovery case expense associated with this MRO.”

Staff’s Recommendation – SSO Auction Proposal:

“Staff is generally supportive of the continuation of the declining clock auction structure and the laddering and staggering of auction dates and terms that, when blended together, form the basis of the SSO rate. This auction structure has been adopted by each of the Commission’s regulated EDUs and has proven over time to be an effective mechanism to leverage competitive forces and allow wholesale market conditions to determine the rate for default service.”

The Company has proposed auction products of 12-month and 24-month durations. Staff believes this structure is sufficient to protect default service customers from wholesale market volatility. While the inclusion of 36-month duration products may also be a reasonable auction design, these longer-duration products come with greater risks. The uncertainties inherent in a longer-term product may lead to higher risk premiums being included in supplier bids. Additionally, the wholesale markets administered by PJM are themselves a source of uncertainty. In response to the capacity market’s inability to keep pace with unprecedented load growth, PJM has embarked on a holistic review of its market design, the results of which are not yet known. It is prudent at this time to manage exposure to potential changes in wholesale market design by limiting default service procurements to 12-month and 24-month products.” [Emphasis added.]

Staff’s Recommendation – Data Center SSO Auction Proposal

“The Company proposes to remove Data Center load from the current slice of system product offered in the auctions and create a separate product to serve that load. Staff supports this proposed change. The migration risk associated with Data Center loads presents a unique challenge to auction bidders. Data Center loads returning to SSO service could materially affect the size and shape of load-following tranches being served by suppliers. This risk is largely unpredictable by suppliers and therefore unable to be hedged against or otherwise mitigated, leading to risk premiums being included in bids and absorbed by all default service customers. This risk exists even if no Data Centers are currently taking SSO service. By allowing the Company to conduct a separate procurement, non-Data Center SSO customers can be insulated against the risks associated with Data Center migration.” [Emphasis added.]

Given these risks, a fixed-price auction for Data Center loads is unfeasible. Instead, the Company proposes an Hourly-Priced Product that is indexed to the PJM market. . . It is Staff’s expectation that the Hourly Priced Product will elicit far more bidder interest in serving the Data Center auction product than if it had remained a fixed-price obligation.” [Emphasis added]

“The Company proposes to eliminate the load caps for the Hourly-Priced Product. Since the quantity of load to be served in the Hourly-Priced Product is highly uncertain, and indeed may never materialize, Staff supports this change. Increasing the credit-based tranche caps could also encourage more robust bidder participation. Additionally, the Company and its independent auction manager should review whether the mark-to-market credit provisions that apply to the fixed-price auction should be maintained for the Hourly-Priced Product.” [Emphasis added]

Staff’s Recommendation – Request to Defer Administrative Costs of Proceeding

The Company is also requesting authority “to defer for future recovery case expense associated with this MRO.” According to AES Ohio, the deferral “is appropriate given the statutory requirement for all electric distribution utilities to maintain an MRO.” This is the entirety of AES Ohio’s support for the requested deferral. It cited no precedent for a deferral of this sort, provided no estimate of the expected deferral amount, did not describe the nature of the expenses it plans to defer, and offered no supporting documentation justifying the deferral. In response to a Staff data request seeking more information about the requested deferral, AES Ohio produced a spreadsheet stating that it projects $150,000 in costs for “legal” and $75,000 in costs for “consulting fees,” with no additional details, explanation, description, or supporting documentation. [Emphasis added.]

Staff recommends that the Commission deny AES Ohio’s request to defer expenses associated with filing and adjudicating this MRO proceeding.” [Emphasis added.]

Staff’s Recommendation – MRO Duration

“In its Application, AES Ohio does not propose a specific duration for its MRO. Given the relative lack of complexity of an MRO as compared to an ESP, Staff agrees that an MRO need not be approved for a specific number of years. Instead, the approved auction procedures should continue to be effective unless and until the Commission modifies them in a future proceeding. The Commission has found that it has ongoing jurisdiction over approved SSO auction procedures. Accordingly, if there is a need to modify the approved MRO, the Commission can do so, even without the utility being required to file periodic MRO cases. To facilitate this, Staff should have the ability to reopen the case (by filing a notice in this docket or opening a new docket) to reevaluate the approved auction terms and conditions.” [Emphasis added.]