Delaware Public Service Commission Releases Final Report on Delmarva Power’s Electric Supply Auction

On February 19, 2020, the Delaware Public Service Commission (PSC) released The Final Report assessing the conduct and results of Delmarva Power’s electric Standard Offer Service (SOS) reverse auction process for the 2019-2020 procurement year; the PSC was assisted by its technical consultant, The Liberty Consulting Group. Delmarva Power successfully secured all of the outstanding needs for full-requirement service for their electric customers who have not chosen an alternative electric supplier.

The procurement process used a reverse auction process that relies upon bidders’ awareness of the actions of other bidders in an attempt to drive prices down for both Delmarva Power and customers. Of the twelve companies interested in this year’s Request For Proposals (RFP), nine were eligible to bid: nine were actual bidders and six won a portion of Delmarva Power’s SOS needs. The winning suppliers were Axpo, DTE, Exelon, Hartree, NextEra and TransAlta.

Delmarva held two separate auctions, one in December 2019 and one in January 2020 and acquired approximately 540 MWs. The average winning bid for the Residential Small Commercial and Industrial (RSCI) 2-year contract was approximately 8.6% lower than last year. For the Medium (MGS), Large (LGS), and Primary (GS-P) general service customers, the average winning bids ranged from a reduction of 3.1% to 6.8% compared to last year’s bids.

Based on the bid prices alone, the approximate change in the average monthly bill by customer class is as follows:

• 1.1% reduction for RSCI class;
• 1.6% reduction for the SGS class;
• 2.3% reduction for the MGS class;
• 1.8% reduction for the LGS class; and,
• 2.4% reduction in the GS-P class.

These are only power costs and do not include various other costs that are subject to change on the bills. The full version of the Technical Consultant’s Final Report can be found on the PSC’s website at https://depsc.delaware.gov/standard-offer-service/