{"id":2802,"date":"2022-10-27T06:46:00","date_gmt":"2022-10-27T11:46:00","guid":{"rendered":"https:\/\/www.paenergyratings.com\/blog\/?p=2802"},"modified":"2022-10-24T16:21:51","modified_gmt":"2022-10-24T21:21:51","slug":"dlc-auction-snag-could-cost-pittsburgh-more","status":"publish","type":"post","link":"https:\/\/www.paenergyratings.com\/blog\/dlc-auction-snag-could-cost-pittsburgh-more\/","title":{"rendered":"DLC Auction Snag Could Cost Pittsburgh More"},"content":{"rendered":"\n

Duquesne Light Company Files Auction Alternative<\/h2>\n\n\n\n
\"A
Learn why an orphaned tranche from the recent DLC auction could increase energy costs to Pittsburgh area businesses and what alternatives could be in the works.<\/em><\/center><\/figcaption><\/figure><\/div>\n\n\n\n

Last month, Duquesne Light Company<\/strong> (DLC<\/strong>) held its auction for default electricity supply to medium commercial customers. The auction offered four 3-month long tranches to wholesale generator companies. Unfortunately, only three of these sold. This left the fourth tranche that covers the period for December 2022 through February, 2023 unfilled.<\/p>\n\n\n\n

If the Pittsburgh utility can’t fill this fourth tranche through its usual auction method, it may have to purchase electricity off the spot market. This could be bad since spot market pricing during the winter months may be higher. But to make matter worse, there’s a lot of uncertainty in natural gas prices<\/a>. In order to avoid this, DLC<\/strong> is asking the Pennsylvania Public Utility Commission (PUC) to fill the fourth tranche<\/a> through one of two options. But, if the PUC says no way, this DLC<\/strong> auction snag could cost Pittsburgh customers more.<\/p>\n\n\n\n

DLC Auction Alternatives<\/h3>\n\n\n\n

The problem is that DLC<\/strong> needs to fill the fourth default service tranche before December 1. That’s because it must reserve enough electricity to cover December 2022, through February 2023. As a first alternative, DLC is offering a step-up deal. In this scenario, the wholesale suppliers who won the three other tranches in the auction can bid on this fourth tranche. Should both suppliers want the tranche, they can share it based on their percentage wins from the initial auction. <\/p>\n\n\n\n

If that fails, DLC <\/strong>can change the fourth tranche from a 3-month long period to a single 12 month period. If PUC approves this option, a sealed bid auction takes place to fill this 12-month period. As a result, in the 12-month period that follows, only three tranches would then then head to auction. <\/p>\n\n\n\n

What If DLC Goes to the Spot Market?<\/h3>\n\n\n\n

If PUC doesn\u2019t accept either of these options, DLC<\/strong> will purchase its electricity supply off the spot market to cover the three-month period. But electricity prices on the spot market tend to run high, even on during “normal” years. As a result, Pittsburgh’s medium commercial class customers could face very high prices this December into February. For Pittsburgh residents, that’s potentially troubling if there\u2019s a recession<\/a> in the future.<\/p>\n\n\n\n

DLC Auction Results Could Pittsburgh Residents<\/h3>\n\n\n\n

Basically, if DLC goes to the spot market it will pass on the higher rates to medium commercial class customers. And with the need to cut costs, higher energy costs might lead medium sized businesses to change their hiring practices<\/a>. If companies have to choose between paying for energy and paying employees, there could be layoffs and downsizing. Plus, companies may not be hiring if they can\u2019t afford to pay extra staff. For manufacturers in Pittsburgh<\/a>, a potential DLC price to compare rate increase could slow growth.<\/p>\n\n\n\n

Keep Your Electricity Costs Low<\/h3>\n\n\n\n

With a possible recession lurking as cold weather approaches, make sure you sign up for some hot electricity deals. Find a cheap fixed rate electric plan<\/a> and lock in a low price for a long term at https:\/\/www.paenergyratings.com<\/a>. And be sure to check out here for updates about energy news and tips affecting Pennsylvania electricity customers. <\/p>\n","protected":false},"excerpt":{"rendered":"

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