| General |
| 1. |
Q. |
Will customer rates for the RTS and RS classes be adjusted from the RFP clearing prices to account for the differential between the two classes for 2011? |
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A. |
The difference being credited to the RTS customers will be spread out (charged) among all the RS customers; however, please note that the number of customers in the RTS class is considerably small (approximately 14,000) as compared to the number of customers in the RS class (approximately 1,200,000). As a result, there will be no discernable difference in the rate customers will be paying versus the clearing prices. |
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| 2. |
Q. |
Will the winning bidders and prices be disclosed eventually? |
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A. |
As stated in the Confidentiality Agreement appended to the RFP Rules, "the identity of all (but no fewer than all) bidders who were awarded any load in the state may be released on a statewide basis on or after the first day of the service year." It is not expected that the identity of winning bidders would be disclosed before that time.
Individual bid prices awarded to suppliers are not disclosed. However, following each solicitation, PPL Electric provides a news release that provides the average generation supply prices for each customer group. The news release can be found here: http://www.pplelectric.com/Business+Partners/polr-dspp/RFP+Results.htm |
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| 3. |
Q. |
The PPL Electrics News Release on August 13, 2009 regarding the August 2009 solicitation results (available here) states the “purchase of five-month full-requirements contracts resulted in a price of $88.60 per megawatt-hour for residential customers and $90.31 per megawatt-hour for small- and mid-sized business customers.” Please (a) provide a detailed explanation as to how the winning combination average price is transformed into the single published price for each of the Residential and Small C&I customer groups, and (b) also indicate whether the awarded price for the block supply plays a role in the calculation of the published price for the Residential Group. |
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A. |
The approach PPL Electric followed to calculate the average generation supply price for each customer group (residential, and small commercial and industrial) resulting from a given solicitation uses only the Full Requirements winning bids and proceeds as follows: |
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1. |
The starting point is the Combination Average Price ("CAP") of the winning bidders for the group. |
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2. |
The CAP is multiplied by 1.0568 to reflect adjusted total line losses of 5.68%, which is calculated using the formula:
Adjusted Total Line Losses = Total Loss Factor * (1 - Average PJM Loss Deration Factor)
where Total Loss Factor = 1.0885
Average PJM Loss Deration Factor = 0.0291 Adjusted Total Line Losses = 1.0885 * (1 - 0.0291) = 1.0568 |
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3. |
The amount from step 2 is divided by (1 - .059) to reflect the current Gross Receipts Tax rate. |
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4. |
The resulting amount is the average generation supply price for the group. |
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The awarded price for the Block Supply RFP does not enter into the calculation of the Residential Full Requirements price published in the news release. |
| 4. |
Q. |
Please provide the administrative costs of the RFPs that will be included in customer rates or an estimate of what this cost will be. |
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A. |
The costs incurred by PPL Electric to administer the solicitations will be incorporated into customer retail rates. While it is difficult to predict exactly what this charge will be, PPL Electric expects that it will be minimal. |
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| 5. |
Q. |
With reference to the PPL Electric news release regarding the bid results of the first and second solicitations, are the prices disclosed for the full requirements load following bids already adjusted for losses and GRT, or are these prices the winning combination average prices of load following bids on October 20th? Please also clarify how network transmission costs and ARR credits are accounted for in terms of the announced prices in both news releases. |
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A. |
The prices disclosed for the full requirements load following bids are adjusted for losses and gross receipt taxes. Please refer to Customer and Rates/General FAQ-3 for the specific approach PPL Electric followed to calculate the average generation supply price for each customer group. The announced prices do not account for network transmission costs or ARR credits. |
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| 6. |
Q. |
Could you please confirm that the purchase prices for the block products reported in the August 2009 and October 2009 press releases ($57.15/MWH and $57.70/MWH) are unadjusted? In other words, could you please confirm that they are not grossed up for line losses or GRT? |
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A. |
You are correct. The reported prices for the Block Supply RFP are unadjusted for line losses or GRT. |
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| 7. |
Q. |
I am trying to find out if Transmission charges will still be bypassable (pass thru) charges after 1/1/10 when the fixed energy charges take effect. |
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A. |
Transmission charges after 1/1/10 will be charged to customers through the transmission service charge (TSC), which does include Network Integration Transmission Service (NITS) as well as over/under collections; thus, all transmission charges are bypassable. |
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| Block |
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No questions submitted for this category at this time. |
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| Load Following Full Requirements |
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No questions submitted for this category at this time. |
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| AEC |
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No questions submitted for this category at this time. |
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