Summary
This 8-K filing announces the results of a competitive auction for the generation supply of FirstEnergy Corp.'s (FE) Ohio utility subsidiaries: Ohio Edison Company, The Cleveland Electric Illuminating Company, and The Toledo Edison Company. The Public Utilities Commission of Ohio (PUCO) approved the auction, which established a wholesale price for 100% of the standard service offer requirements for the period of June 1, 2009, to May 31, 2011. The weighted-average winning bid price for generation supply, including energy, capacity, and transmission services, was $61.50 per megawatt-hour (MWH).
Key Highlights
- 1FirstEnergy Corp.'s Ohio subsidiaries have secured generation supply for 100% of their Standard Service Offer requirements through a competitive auction approved by the PUCO.
- 2The auction covered the period from June 1, 2009, to May 31, 2011.
- 3The load-weighted-average winning bid price for generation supply (energy, capacity, and transmission) was $61.50 per MWH.
- 4FirstEnergy Solutions Corp. (FES), a wholly owned subsidiary, was a winning bidder.
- 5FES entered into a power supply agreement to provide 51% of the Ohio Companies' generation and transmission supply needs for the specified period.
- 6The agreement includes credit provisions, such as posting margin based on mark-to-market calculations, which can be satisfied with cash, letters of credit, or first mortgage bonds for amounts exceeding $400 million.
- 7The power supply agreement can be terminated by mutual agreement or in the event of a default by either party.
Frequently Asked Questions
The competitive bid process, approved by the PUCO, determines the cost of generation supply for customers who do not choose an alternative supplier. This auction provides transparency and aims to secure supply at market-driven prices for a two-year period, impacting a significant portion of the Ohio utilities' operational costs.
The load-weighted-average winning bid price was $61.50 per megawatt-hour (MWH). This price covers generation (energy and capacity) as well as transmission services, including ancillary services.
FES, a wholly owned subsidiary of FirstEnergy, was one of the winning bidders in the auction. FES has entered into a power supply agreement to provide 51% of the generation and transmission supply needed by the Ohio Companies for the period of June 1, 2009, through May 31, 2011.
Yes, the agreement includes various credit provisions. FES is required to post margin based on mark-to-market calculations. This collateral can be provided through cash or letters of credit. For collateral amounts exceeding $400 million, FES has the option to deliver or pledge first mortgage bonds.