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This information can be found in PPL’s filing in the proceeding. For more information, please refer to documents on the following web site: www.pplact129.com.

Does the unit entitlement product incorporate plant outages/availability? How does this work?

The unit entitlement product is being developed. The supply from the unit entitlement product is expected to begin on June 1, 2011.

After PaPUC certification of the results of the RFP and its notice of same, if a successful bidder desires to disclose that it won tranches in the RFP, including the number and category of tranches, can it do so? We note that the only potentially applicable provision in the Confidentiality Agreement that is an attachment to the Supply Master Agreement provides that:

“A Party shall use the other Party’s Confidential Information only for the purpose of evaluating, responding to, negotiating and consummating the RFP and/or the response to the RFP, and/or consummating the Default Service SMA and/or DSSM SMA as appropriate, and not for any other purpose.  Neither Party shall disclose to Third Parties any information about PPL Electric’s or RFP Bidder’s participation in the RFP or execution of a Default Service SMA and/or DSSM SMA as appropriate, or the terms or conditions or any other facts relating thereto, including the fact that discussions are taking place with respect thereto, the status of those discussions, or the fact that Confidential Information has been made available by or to PPL Electric or RFP Bidder or their Representatives.”

We note that virtually identical language appears in the confidentiality agreement used by the West Penn Power Company in connection with its recent solicitations for default service supply, and that successful bidders disclosed such information.  See, e.g., slide 14 of the Allegheny Energy Investor Presentation found at the following URL:
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MzQ2NTA3fENoaWxkSUQ9MzM0MzkxfFR5cGU9MQ==&t=1
We observe further that PPL Electric disclosed comparable information in certain of its required SEC disclosures concerning its affiliate PPL EnergyPlus’ successful participation in PPL Electric’s first default service supply solicitations in 2010, and again, the language in the applicable confidentiality agreement is virtually identical to that set forth above in the current agreement.

Your analysis is incorrect. Please note that for the Full Requirements RFP and the Block Supply RFP, a bidder is not naming a price for each individual tranche, but naming a price for a total number of tranches supplied.

For example on that slide, Bidder A is naming a price of $75/MWh for 1 tranche, a price of $76/MWh for 2 total tranches (as opposed to the second tranche) and a price of $76.5/MWh for three (3) total tranches (as opposed to the third tranche).

In your example, if Bidder B’s Bid for 1 total tranche at $75.50/MWh is selected, then we would need to select Bidder A’s Bid for two (2) total tranches at a price of $76/MWh in order to fill the three (3) needed tranches. The average price of this combination is $75.83/MWh as illustrated on that slide, which is higher than the average price of $75.50/MWh for the combination where Bidder A’s Bid for 1 total tranche is selected and Bidder B’s Bid for two (2) total tranches is selected.

Please see section 5.1.5 of the RFP Rules for more information.

Yes. Section 1.1.4 of the Full Requirements RFP Rules state that “For the Residential Group, this reduction includes 300 MW of energy and capacity purchased under separate block supply contracts, and up to an additional 50 MW of energy and capacity associated with a long-term unit entitlement supply contract. Appropriate contract and performance data will be provided on PPL Electric’s RFP Web site.” Hence, starting with the block purchases, PPL Electric will purchase 300 MW of block energy through the Block Supply RFP and 300 MW of capacity through PJM’s RPM.

Default Service Load will be the load of default service customers at the aggregate zone bus, after PJM de-rating for marginal losses less the 300 MW of block energy supply bought through the Block Supply RFP and less hourly NYPA long term contract energy allocated to the Residential Customer Group.

PPL Electric will be a load serving entity and will report to PJM its load responsibility in each hour. For the Residential Customer Group, PPL Electric’s hourly energy load responsibility will be 300 MW plus allocated NYPA energy. PPL Electric will estimate de-ration factors so that it is responsible for this amount of the energy of the Residential Customer Group for each hour and will reconcile after the fact so that it is exactly responsible for this amount of energy each hour. The full requirements suppliers’ Specified Percentage will be applied to hourly Default Service Load less the hourly PPL Electric energy responsibility to determine the suppliers’ energy responsibilities each hour.

As indicated in the Full Requirements RFP Rules, PPL Electric will buy 300 MW of RPM capacity. PPL Electric will be responsible each day for providing 300 MW of RPM capacity (plus allocated NYPA capacity) for the load of default service customers in the Residential Customer Group. The total RPM responsibility of all full requirements suppliers will be the RPM capacity required to serve the load of default service customers in the Residential Customer Group less the 300 MW and the NYPA capacity supplied by PPL Electric for that Group. An individual full requirements supplier’s responsibility for capacity will be its Specified Percentage times the total RPM responsibility of all full requirements suppliers of the Residential Customer Group.

PJM will calculate the ancillary service requirements for PPL Electric based on the hourly energy loads for which PPL Electric is responsible and PPL Electric’s scheduling. Similarly, each full requirements supplier’s ancillary service responsibility will be a function of that supplier’s hourly load and its scheduling.

In more general but rough terms, PPL Electric will be a load serving entity for the Residential Customer Group that, each hour, has a load of 300 MW plus the NYPA Residential allocation for energy and ancillary service responsibility determination, and that supplies 300 MW plus the NYPA Residential capacity allocation of RPM capacity. Full requirements suppliers will be responsible for the residual energy and capacity needs of the Residential Customer Group. PJM will determine ancillary service responsibilities for PPL Electric and each supplier based on their individual loads and schedules. The difference between PPL Electric’s share of Default Service Load served using the blocks and a full requirements supplier’s share of Default Service Load is that PPL Electric’s energy and capacity responsibilities are determined as fixed MW values while a full requirements supplier’s responsibilities are determined as a percent of Default Service Load less the fixed MW PPL Electric responsibility.

The supply from the unit entitlement product is expected to begin on June 1, 2011. As such, this product is not expected to affect the load associated with the delivery period of bid products of this first solicitation, which is from January 1 to May 31, 2011. While details of the 50 MW unit entitlement purchase have not been developed, PPL Electric believes that a similar structure will apply.

Your analysis is incorrect. Please note that for the Full Requirements RFP and the Block Supply RFP, a bidder is not naming a price for each individual tranche, but naming a price for a total number of tranches supplied.

For example on that slide, Bidder A is naming a price of $75/MWh for 1 tranche, a price of $76/MWh for 2 total tranches (as opposed to the second tranche) and a price of $76.5/MWh for 3 total tranches (as opposed to the third tranche).

In your example, if Bidder B’s Bid for 1 total tranche at $75.50/MWh is selected, then we would need to select Bidder A’s Bid for 2 total tranches at a price of $76/MWh in order to fill the 3 needed tranches. The average price of this combination is $75.83/MWh as illustrated on that slide, which is higher than the average price of $75.50/MWh for the combination where Bidder A’s Bid for 1 total tranche is selected and Bidder B’s Bid for 2 total tranches is selected.

Please see section 5.1.5 of the RFP Rules for more information.

An Alternative Energy Credit (“AEC”) is a tradable instrument that is used to establish, verify, and monitor compliance with the AEPS Obligations under the AEC SMA, including the Pennsylvania Alternative Energy Portfolio Standards Act (“AEPS”) at 73 P.S. §§ 1648.1-1648.8, and regulations adopted thereunder. An AEC represents all the environmental attributes corresponding to one megawatt-hour of energy generated from eligible renewable energy resources.

Through the Alternative Energy Credits (“AEC”) RFP, PPL Electric purchases AECs necessary to meet the AEPS Obligation associated with its purchases of Block Energy Supply under its Default Service Procurement Plan (“DSPP”). In the AEC RFP, AECs will be procured through multiple solicitations that mirror the purchases of Block Energy Supply under the DSPP.

AECs procured must comply with the Pennsylvania Alternative Energy Portfolio Standards for retail sales of energy during the supply period covered by the Block Energy Supply.

For information about the AEPS Act, including the information on an eligible renewable resource, please visit: http://www.puc.state.pa.us/electric/electric_alt_energy.aspx

Alternative Energy Credits (“AECs”) procured through the AEC RFP are tradable instruments that are used to establish, verify and monitor compliance with the AEPS Obligations under the AEC SMA, including the Pennsylvania Alternative Energy Portfolio Standards Act (“AEPS”) at 73 P.S. §§ 1648.1-1648.8, and regulations adopted thereunder.  AECs are comparable to Renewable Energy Certificates (“RECs”). An AEC represents the environmental attributes corresponding to one megawatt-hour of energy generated from eligible renewable energy resources.

Through the AEC RFP, PPL Electric purchases AECs necessary to meet the AEPS Obligation associated with its purchases of Block Energy Supply under its Default Service Procurement Plan (“DSPP”) but does not buy energy from renewable energy facilities.  In the AEC RFP, AECs will be procured through multiple solicitations that mirror the purchases of Block Energy Supply under the DSPP.

PPL Electric, through its Alternative Energy Credits (“AEC”) RFP, may purchase AECs from alternative energy sources located in the Commonwealth of Pennsylvania or located in other states but in the control area of the PJM Interconnection, LLC.

PPL Electric’s AEC RFP is to obtain AECs to meet its obligations, pursuant to Pennsylvania’s Alternative Energy Portfolio Standards Act, 73 P.S. §§ 1648.1-1648.8 (“the AEPS Act”).  For further details, please consult the AEPS Act, including information on eligible renewable resources, which is available at: http://www.puc.state.pa.us/electric/electric_alt_energy.aspx. 

Please also consult the PaPUC final rulemaking order that codifies prior Commission interpretations of the AEPS Act (73 P. S. §§ 1648.1--1648.8)) and that is available at: http://www.pabulletin.com/secure/data/vol38/38-51/2286.html.

Please confirm whether PPL interprets its requirements under the PUC order as requiring small generating facilities of 2 MW or less as having to go through the solicitation process or whether such systems can sell directly to PPL both the power and AEC, as a qualified facility under PA regulations.

We are determining whether it is necessary to submit an application under the current PPL solicitation. Any assistance you can provide in addressing this question would be appreciated.

It is our understanding that Maine is not in the control area of PJM Interconnection, LLC and as such a renewable resource from Maine is not an eligible resource under the Pennsylvania AEPS Act.

PPL Electric, through its Alternative Energy Credits (“AEC”) RFP, may purchase AECs from alternative energy sources located in the Commonwealth of Pennsylvania or located in other states but in the control area of the PJM Interconnection, LLC.

PPL Electric’s AEC RFP is to obtain AECs to meet its obligations, pursuant to Pennsylvania’s Alternative Energy Portfolio Standards Act, 73 P.S. §§ 1648.1-1648.8 (“the AEPS Act”).  For further details, please consult the AEPS Act, including information on eligible renewable resources, which is available at: http://www.puc.state.pa.us/electric/electric_alt_energy.aspx. 

Please also consult the PaPUC final rulemaking order that codifies prior Commission interpretations of the AEPS Act (73 P. S. §§ 1648.1--1648.8)) and that is available at: http://www.pabulletin.com/secure/data/vol38/38-51/2286.html.