Report released on Delmarva Power’s Electric Supply Auction

The Delaware Public Service Commission released The Liberty Consulting Group's Final Report assessing the conduct and results of Delmarva Power's electric Standard Offer Service reverse auction process for the 2018-19 procurement year. Delmarva Power successfully secured all of the outstanding needs for full-requirement service for its electric customers – those who have not chosen an alternative 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 12 companies interested in this year's RFP, seven were eligible to bid. Of the six actual bidders, four won a portion of Delmarva Power's SOS needs. The winning suppliers were Direct Energy, Exelon, NextEra and Vitol.

Delmarva held two separate auctions, one in November 2017 and one in January 2018, in which it received and ranked bids for four different customer classes. In total, Delmarva Power acquired approximately 417MW of peak load energy for full-requirement SOS service, 10MW more than last year. Contracts from this year's residential, small commercial and industrial bids will replace those procured in the 2014-15 auctions, except that this year's contract is for one year. The average winning bid for this class was approximately 12 percent higher than last year's but lower than the bid it replaces. For the medium, large and primary general service customers, Delmarva Power sought 12-month contracts. Average winning bids for these classes were approximately 3.7 to 9.3 percent higher than last year.

This means, based on the bid prices alone, there will be roughly a 3.7 percent reduction in the average monthly bill for residential, small commercial and industrial customers, and approximately a 3.95 percent reduction in the average monthly bill for small general service customers. Medium general service customers will see an approximate increase of about 5.75 percent; large general service customers will see an approximate increase of 6.7 percent, and general service customers will see an approximate increase of 2.15 percent to their average monthly bill (not including various other costs subject to change on the bill).

For the full version of the technical consultant's final report, go to https://depsc.delaware.gov/standard-offer-service.