A proposed procurement plan should balance the goals of
allowing the development of a competitive retail supply market and also
including a prudent mix of arrangements to minimize the risk of over-reliance
on any energy products at a particular point in time. In developing a proposed
procurement plan, a DSP should consider including a prudent mix of supply-side
and demand-side resources such as long-term, short-term, staggered-term and
spot market purchases to minimize the risk of contracting for supply at times
of peak prices. Short-term contracts are contracts up to and including 4 years
in length. Long-term contracts are contracts more than 4 years in length but
not more than 20 years. Long-term contracts of more than 4 years in length but
not more than 20 years should not constitute more than 25% of the DSP's
projected load unless the Commission determines that a greater portion of load
is necessary to achieve least cost procurement. The plan should be tailored to
the following customer groupings, but DSPs may propose alternative divisions of
customers by registered peak load to preserve existing customer classes.
(1)
Residential customers and
nonresidential customers with less than 25 kW in maximum registered peak
load. Initially, the DSP should acquire electric generation supply for
these customers using a prudent mix of resources as described in the
introductory paragraph to this section. Contracts should be laddered to
minimize risk, in which a portion of the portfolio changes at least annually,
with a minimum of two competitive bid solicitations a year to further reduce
the risk of acquisition at a time of peak prices. In subsequent programs, the
mix percentage of supply acquired through long-term and short-term contracts
and spot market purchases should be adjusted, depending on developments in
retail and wholesale energy markets to ensure least cost to
customers.
(2)
Nonresidential customers with 25-500 kW in maximum registered peak
load. The DSP should acquire electric generation supply for these
customers using a mix of resources as described in the introductory paragraph
to this section. Fixed-term contracts may be laddered to minimize risk, with a
minimum of two competitive bid solicitations a year to further reduce the risk
of acquisition at a time of peak prices. In subsequent programs, the mix
percentage of supply acquired through long-term and short-term contracts and
spot market purchases should be adjusted, depending on developments in retail
and wholesale energy markets to ensure least cost to customers.
(3)
Nonresidential customers with
greater than 500 kW in maximum registered peak load. Hourly priced or
monthly-priced service should be available to these customers. The DSP may
propose a fixed-price option for the Commission's consideration.
Notes
The
provisions of this § 69.1805 adopted September 14, 2007, effective
9/15/2007, 37 Pa.B. 5019;
amended February 24, 2012, effective 2/25/2012, 42 Pa.B.
1044.
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).
