FirstEnergy Plans Comeptitive Bidding Process

Competitive Bidding Process Planned to Procure Electric Generation Supply for FirstEnergy’s Ohio Utilities

Full Article: http://finance.yahoo.com/news/Competitive-Bidding-Process-prnews-14398801.html

* Wednesday February 18, 2009, 10:05 am EST

AKRON, Ohio, Feb. 18 /PRNewswire-FirstCall/ — FirstEnergy Corp. (NYSE: FE – News) announced today that a competitive bidding process is being planned for its Ohio utilities – Ohio Edison, Cleveland Electric Illuminating Company and Toledo Edison – to procure electric generation for delivery from April 1, 2009, through August 31, 2009, for retail customers who choose not to shop with an alternative supplier.
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Similar to the successful process conducted in December to procure generation for delivery during the first three months of 2009, the competitive bidding process will use a Request for Proposal (RFP) format and will be managed by CRA International, a global consulting firm with expertise in energy markets and procurement. Individual bidders will not be permitted to serve more than 75 percent of the companies’ load for non-shopping retail customers. Bidders will be required to certify that they are creditworthy, acting independently of other bidders, and are making firm offers to provide generation service. Bids are due on March 12, 2009, and winning bidders will be notified the same day.

The companies have established a Web site to provide bidders with a central source of documents, data and other information for the bidding process. This information is available by accessing www.firstenergy-auction.com/2009RFP. The contact for the RFP Manager is Brad Miller, vice president, CRA International, who can be reached at 617-425-3384, or RFPManager@crai.com. Companies interested in receiving information on this RFP process should register on the RFP Web site.

The RFP is being planned to ensure that customers continue to have a reliable supply of electricity while the companies and other stakeholders actively work toward the goal of reaching a stipulated agreement on an Electric Security Plan (ESP). If an agreement among the parties is reached and the Public Utilities Commission of Ohio approves the agreement in a timely manner, the companies will cancel this RFP process and generation supply will be secured through an ESP. The companies, which do not own any electric generation, serve 2.1 million customers in Ohio.

FirstEnergy is a diversified energy company headquartered in Akron, Ohio. Its subsidiaries and affiliates are involved in the generation, transmission and distribution of electricity, as well as energy management and other energy-related services. Its seven electric utility operating companies comprise the nation’s fifth largest investor-owned electric system, based on 4.5 million customers served, within a 36,100-square-mile area of Ohio, Pennsylvania and New Jersey; and its generation subsidiaries control more than 14,000 megawatts of capacity.

It’s one again time for the Columbus MEC Energy Conference. This year it will be taking place on February 24th and 25th. Below is a link to the conference website:

http://www.mecseminars.com/Programs/09AnnualEnergy.html

Posted by John Funk/Plain Dealer Reporter February 03, 2009 12:05PM

Categories: Energy, Real Time News

Plain Dealer File

Updated at 4:54 p.m.

FirstEnergy Corp. would get its way — sort of — if the Public Utilities Commission of Ohio adopts a compromise proposal unveiled Tuesday to use wholesale power market prices as the starting point to negotiate retail rates.

The proposal, written by staff of the Public Utilities Commission of Ohio, would have the commission use an auction to determine what wholesale power prices would be from June 1 this year through May 2011.

But the resulting retail prices probably would not soar as they have in other deregulated states when auctions were used, because in this arrangement the PUCO would still set the final retail price — after a lot of arm wrestling with the company and interested parties.

The adversaries would include not only the utility but also a number of other groups, such as those representing industrial customers, consumer advocates led by the Ohio Consumers’ Counsel and even attorneys representing some of FirstEnergy’s potential competitors.

The commission sent an outline of the plan to the utility and all of its critics late Monday and set a closed-door meeting Thursday to begin discussion.

The PUCO and FirstEnergy have been at loggerheads for months. The commission’s in November rejected FirstEnergy’s plan to use wholesale markets, and the company in December rejected the agency’s granting regulated and slimmed-down rate increases.

The wrangling grows out of Ohio’s new “hybrid” utility law, which could not quite undo Ohio’s decade-long path toward rate deregulation but still managed to keep some aspects of traditional regulation in place.

The new staff proposal includes:

• An auction run by an independent company to determine a wholesale price that FirstEnergy would have to live with for the next two years — a somewhat risky prospect since the recession has softened wholesale power prices.

• FirstEnergy Solutions, an unregulated subsidiary that now owns all of the company’s power plants, would be allowed to bid without limitations — meaning in theory that it could end up supplying all of the power, which is anathema to consumer groups.

• The new retail generation rates would not include any extra charges for customers who want to buy electricity from outside companies.

• The elimination of these charges could lessen FirstEnergy’s competitive advantage and open the door for consumers and industrial customers to buy from independent power companies.

• The Northeast Ohio Public Energy Council, or NOPEC, representing residential and small commercial customers in over 100 communities, announced months ago it had negotiated a pending deal with Florida-based FPL Energy.

Other points in the staff proposal include:

• There would be no changes in base distribution rates until Dec. 31, 2011. Various rate “riders” to pay for past fuel increases or past upgrades of the distribution system would be deferred, with interest, until 2011.

• A new rider of $0.002 per kilowatt-hour for current and future upgrades to the distribution system would run from April 1 of this year through Dec. 31, 2011.

• FirstEnergy would write off 50 percent, about $215 million, of the charges it intended to levy on Illuminating Co. customers to recover spending the PUCO allowed in past years before deregulation began. Critics have bitterly complained that many of the previous expenditures were long ago paid for and the charges should have been dropped.

• Schools would receive a discount of nearly 9 percent.

• Industrial rates would have a ceiling tied to the auction price.