PPL Electric Utilities, a provider of electric delivery service in 29 counties, has conducted the first in a series of scheduled purchases for 2011 electricity supply, which was approved by the Pennsylvania Public Utility Commission.
PPL Electric Utilities, in this first procurement, obtained 16.875% of the load-following electricity supply it needed to serve residential and small- and mid-size business customers in the five-month period from January 1, 2011, to May 31, 2011.
David G. DeCampli, president of PPL Electric Utilities, said: “We are continuing with the strategy of obtaining electricity supply in stages over time to minimize the price risk for our customers. Continuing the experience we have had with obtaining electricity supply for 2010, this first procurement for 2011 was a highly competitive process. We had 14 suppliers participate, ensuring competitive prices for our customers.”
These initial purchases are under a plan approved in June 2009 by the PUC for obtaining electricity supply for 2011, 2012 and the first five months of 2013. State law wants PPL Electric Utilities, which does not own power plants and does not generate electricity, to buy default electricity supply for its customers from the competitive market.
The company must obtain electricity supply through a combination of short-term, long-term and spot-market purchases, and distribute the costs to its customers without profit. The purchase of five-month full-requirements contracts resulted in a price of $88.60 per megawatt-hour for residential customers and $90.31 per megawatt-hour for small- and mid-sized business customers.
DeCampli, said: “Because the amount of supply we purchased in this auction is only a small portion of what we need and does not cover the entire year, it is premature based on these prices to estimate the effect on customer bills in 2011.”
PPL Electric Utilities purchased for residential customers, a five-month block of 50MW of round-the-clock electricity supply for January through May 2011 at a price of $57.15 per megawatt-hour, and renewable energy credits for January through May 2011 to comply with Pennsylvania’s Alternative Energy Portfolio Standard.
The price for the 50MW of energy block is for energy only, and would not include capacity and other charges, which the company would purchase separately from the regional PJM Interconnection.
These purchases are separate from the electricity supply that PPL Electric Utilities has obtained for 2010. The sixth and final purchase for 2010 would be in October 2009.