Through these auction processes, Metropolitan Edison Company (“Met-Ed”), Pennsylvania Electric Company (“Penelec”), Pennsylvania Power Company (“Penn Power”), and West Penn Power Company (“West Penn Power”) (each of which may be referred to as a “Company”, and/or in combinations as “Companies”) are seeking to procure full requirements Default Supply generation service for their Default Service Customers. The procurement delivery period for DSP-IV service is June 1, 2017 through May 31, 2021.

As Default Service Suppliers, winning bidders must: (a) assume all responsibilities of a PJM Load Serving Entity ("LSE"), (b) provide for energy, (c) provide for capacity, (d) provide for ancillary services, (d) provide for transmission service, including Network Integration Transmission Service (“NITS”), and (e) provide certain Alternative Energy Credits (“AECs”) pursuant to the Alternative Energy Portfolio Standards Act (“AEPS”).

Default Service Suppliers for Met-Ed, Penelec, and Penn Power must provide AECs needed to meet the non-solar requirements of the Companies’ Default Service Load as more specifically described in the SMAs. The solar AEPS requirements will be provided by the Companies.

Default Service Suppliers for West Penn Power are responsible for all solar and non-solar AECs. However, West Penn Power will allocate to Default Service Suppliers on an annual basis and an AEC per tranche basis, a portion of the 1,000 solar and 75,000 Tier I AECs received by West Penn Power under their current long term contracts.  The long term contacts will expire on May 31, 2021.

Obligations of Default Service Suppliers for the Companies exclude the following: (a) Regional Transmission Expansion Plan charges (“RTEPs”), (b) PJM Expansion Cost Recovery charges (“ECRC”), (c) PJM charges associated with reliability must run (“RMR”) unit declarations and deactivation of plants for which charges are set after the approval of the DSPs by the Commission, (d) unaccounted for energy ("UFE"), and (e) historical out of market tie line, generation and retail customer meter adjustments. These charges will be collected by the Companies directly from shopping and non-shopping customers through competitively neutral non-bypassable charges as applicable. 

Default Service fixed priced products for residential and commercial customers will be procured in a separate auction ("Fixed Price (FP) Auction") from the hourly priced auction for industrial customers ("Hourly Priced (HP) Auction"). The fixed priced and hourly priced auctions will be conducted simultaneously.

As Independent Evaluator (also referred to as the Auction Manager), CRA International will manage each auction process. A simultaneous, multiple-round, descending-price clock auction format will be used. 

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The information provided on the Default Service Program Auction Process, or on the auction information Website, has been prepared to assist bidders in evaluating the Default Service Program Auction Process. It does not purport to contain all the information that may be relevant to a bidder in satisfying its due diligence efforts. Neither the Companies nor the Independent Evaluator make any representation or warranty, expressed or implied, as to the accuracy or completeness of the information, and shall not, either individually or as a corporation, be liable for any representation expressed or implied in the Default Service Program Auction Process or any omissions from the Default Service Program Auction Process, or any information provided to a bidder by any other source. A bidder should check the auction information Website frequently to ensure it has the latest documentation and information. Neither the Companies nor the Independent Evaluator nor any of their representatives shall be liable to a participant or any of its representatives for any consequences relating to or arising from the participant's use of outdated information.