The three 17 month and two 29 month contracts have an normal weighted retail generation supply price of $72.80 per megawatt-hour.
To allow residential customers to benefit from the recent cut in power prices, Allegheny has increased its speed of first auction by two months. If the average prices of the remaining auctions were to be the same as this auction, a Pennsylvania residential customer’s bill in 2011 will increase around $7.75, or 8.5% over 2010 levels, assuming use of 1,000 kilowatt-hours per month. Actual rates will not be available until all supply purchases have been concluded and prices are averaged together.
Additional auctions approved by PUC are planned for June and October 2009, with three more planned in 2010 and two in 2012. The multiple auctions have been designed to shield customers against overexposure to market conditions at any single point in time.
The winning suppliers have been selected from among seven competitive bidders. Boston Pacific Company, Inc. oversaw the process for Allegheny Power. The five contracts awarded on April 17, 2009 will start on January 1, 2011. Included in the full-requirements contract pricing cited above are energy, capacity, Pennsylvania gross receipts taxes, line losses, renewable energy requirements, ancillary services and other provisions.
“We’re pleased that we were able to purchase power for our customers at attractive, competitive prices,” said Paul J. Evanson, chairman, president and chief executive officer of Allegheny. “This is a very positive first step towards a smooth transition from rate caps to market-based generation rates.”
