Oct. 20, 2009 (PR Newswire) --
AKRON, Ohio, Oct. 20 /PRNewswire-FirstCall/ -- FirstEnergy Corp.'s (NYSE: FE) Ohio electric utility companies - Ohio Edison, The Cleveland Electric Illuminating Company and Toledo Edison - today filed an application for a Market Rate Offer (MRO) to provide electric generation service to retail customers who choose not to shop with alternative suppliers.
The MRO, which was filed with the Public Utilities Commission of Ohio (PUCO), would establish a Competitive Bidding Process (CBP) to secure electric generation supply and pricing beginning June 1, 2011. The proposed process is similar to the successful CBP conducted earlier this year to secure generation supply for FirstEnergy's Ohio utility customers through May 31, 2011.
"This CBP has several key enhancements - including multiple bidding sessions and staggered contract lengths - to further reduce potential price volatility, reduce supplier risk and encourage bidder participation," said President and Chief Executive Officer Anthony Alexander. "The process is designed to deliver the most competitively priced power for our Ohio customers through a vibrant auction process."
The CBP would be managed by CRA International, a global consulting firm with expertise in energy markets and procurement, to ensure that it is open, fair and transparent. Qualifying suppliers would bid to supply a percentage of the companies' retail electric generation requirement in multiple rounds of bidding - combining all classes of customers in a "slice-of-system" approach. The process would use a descending clock auction format, with the price per kilowatt-hour "ticking down" each round until the number of bids equals the total supply requirement. The final round of bidding would represent the lowest price at which customers' generation supply needs would be met. The resulting price would be used to establish the standard service offer for customers who choose not to shop with an alternative generation supplier.
The proposed CBP calls for two initial bid solicitations next year - one in June and one in October - with varying supply periods of 12, 24 and 36 months. The staggered end dates establish a framework for the companies to conduct subsequent CBPs each year for one-third of customers' generation supply needs, with customer prices ultimately reflecting a blended average of results over a three-year period.
In addition to the standard service offer, the MRO filing includes three voluntary time-differentiated pricing options for customers - real-time pricing, time-of-day pricing and critical peak pricing. These options provide participating customers the ability to better manage their energy usage and costs.
