FirstEnergy's Pennsylvania Default Service Program

Bidding Rules

RULES 00001
Published On: 11/02/2012

Question: Do all winning tranches for a product get paid the same price?

Answer: Yes, all winning tranches for a product are paid the same price.

RULES 00002
Published On: 11/02/2012

Question: Must all products in the auction clear simultaneously?

Answer: Products in the auction do not close product by product. The auction will continue, and bids can be placed on any products, as long as at least one product is over-subscribed. The Bidding Rules provide the complete set of conditions that determine when the auction concludes.

RULES 00004 (revised 11/06/2014)
Published On: 12/14/2012

Question: If we bid on certain products and do not bid on certain other products, would we still be able to follow the auction for these other products. i.e., would we know the clearing prices of the products we did not bid on?

Answer: During the auction, while you have eligibility to bid in the auction, you will see the status of all products in the auction including any products that you do not bid on.  At the close of the auction, the winning bidders for any product in the auction will see the closing prices for all the products in that auction.  Bidders who do not win any tranches in the auction will not be able to see the closing prices for any product.

RULES 00005
Published On: 01/10/2013

Question: Is the price decrement formula going to be available to the bidders?

Answer: The price decrement formula is not going to be available to the bidders.

RULES 00006
Published On: 01/11/2013

Question: Referenced in 5.4 of the Bidding Rules, when will the reporting ranges be made available to bidders? Also, will the pre-determined level that determines when total supply will be reported simply as below that level be made available prior to the auction?

Answer: The ranges that will be used to report total supply bid after each round in the auction will be provided to Registered Bidders no later than one day before the start of the auction.  This information also will include the level below which total supply bid is reported simply as being below a pre-determined number of tranches.

RULES 00008
Published On: 10/29/2014

Question: In the Default Service clock auctions, if no products receive a price decrement after a round, does this mean that the auction is over?

Answer: Not necessarily.  Pursuant to the Bidding Rules, the presence of free eligibility can keep the auction open even if no product receives a price decrement.

RULES 00009
Published On: 02/10/2016

Question: What determines the reduction in price from one round to another?

Answer: Formulas based on a number of factors and pre-specified guidelines are used to determine the price decrements. Generally, the price decrement for a product will be larger for the earlier rounds in the auction and when the excess supply for the product is greater.  As noted in the Bidding Rules, the Independent Evaluator reserves the right to override the price decrement guidelines.

RUL 00010
Published On: 02/08/2017

Question: When multiple tranches are rolled back to multiple bidders, how do you determine the tranche numbers allocated to different bidders?

Answer: As explained in the Bidding Rules, a random number is assigned to each tranche that is bid. For selecting tranches to roll back, reduced tranches that reflect reduced eligibility for bidders are given priority over reduced tranches that reflect switches to another product. Within each of those two groups of reduced tranches – reduced-eligibility tranches and switched tranches – the random numbers are used to select tranches to roll back. In effect, the rolled back tranches will be proportional based on the number of tranches by which each bidder reduced its bid on the product, but with the condition that reduced-eligibility tranches first are given priority over switched tranches.

RUL 00011
Published On: 02/07/2018

Question: In the Part 2 Application, is it possible to indicate only 1 tranche in 1 zone and still be able to move within zones during the actual auction (for a max 1 tranche) or would an applicant need to submit 1 tranche per EDC in order to do this?

Answer: In the Part 2 Application, you can indicate that you wish to bid on only 1 tranche across all products in the auction by entering 1 for your Indicative Offer at the Maximum Starting Prices.  In this case, your initial eligibility for the auction will be 1 tranche and you will be able to switch your 1 tranche among EDCs and products in response to changes in announced prices (subject to any bidding restrictions).  The Bidding Rules posted at http://www.fepaauction.com/Documents/SupplierDocuments.aspx provide more details.

FAQs Disclaimer

The information provided in the Frequently Asked Questions (“FAQs”) section of the Site has been prepared by the Companies and its advisors for the purposes of facilitating the auction process. The information presented and distributed here is subject to update, modification and/or amendment. The information is current as of the posting date. The material presented and distributed here is for informational purposes only and is made available with the understanding that any individual accessing it will use it for the sole purpose of participating in the aforementioned auction process. The information is not intended to form any part of the basis of any investment decision, valuation, or any bid that may be submitted during the auction process. This information should not be relied upon, and each recipient should make its own independent assessment of the subject opportunity after making all investigations it deems necessary.

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