COMMISSIONERS
STATE OF MARYLAND ___________
STEVEN B. LARSEN
CHAIRMAN
MARTIN O’MALLEY
GOVERNOR
HAROLD D. WILLIAMS
ANTHONY G. BROWN ALLEN M. FREIFELD
LIEUTENANT GOVERNOR SUSANNE BROGAN
LAWRENCE BRENNER
PUBLIC SERVICE COMMISSION
ML#110273
April 11, 2008
Jeffrey P. Trout, Esquire
Senior Attorney
Allegheny Energy
800 Cabin Hill Drive
Greensburg, Pennsylvania 15601
Re: Third Interim Bidding Proposal for Allegheny Power Residential SOS
Dear Mr. Trout:
The Public Service Commission (“Commission”) has reviewed the Third Interim Bidding
Proposal for Allegheny Power Residential Standard Offer Service (“SOS”) filed on April 10,
2008 by The Potomac Edison Company d/b/a Allegheny Power (“Allegheny Power”) and the
comments filed by Commission Staff and by the Office of People’s Counsel.
The Commission has partially granted prior bid plans proposed by Allegheny Power to
procure Allegheny Power’s residential SOS load beginning January 1, 2009. On April 21, 2008,
another round of bidding will occur for procurement of SOS load. Under the previous
Commission’s orders, Allegheny Power has no authority to procure any portion of the residential
SOS load in the April 21 round. The Commission, however, concluded (without pre-judging its
decision in Case No. 9117):
[O]ver time the economic principle of time diversity is likely to benefit
ratepayers. The Commission identified the lack of time diversity
associated with the 2006 SOS auctions as ill-advised and not being in the
public interest.[footnote omitted] Time diversity reduces the risk
associated with procurement on any given date, and, therefore, should be
built into the procurement process going forward.1
Consequently, the Commission believes that it is in the public interest to have Allegheny Power
bid some portion of its residential SOS load in the April round, and, unless otherwise directed by
the Commission prior to the June or October bidding round, to bid a portion of the residential
SOS in those rounds as well.
1
See Order No. 81659, Case Nos. 9056 and 9064.
WILLIAM DONALD SCHAEFER TOWER 6 ST. PAUL STREET BALTIMORE, MARYLAND 21202-6806
410-767-8000 Toll Free: 1-800-492-0474 FAX: 410-333-6495
MDRS: 1-800-735-2258 (TTY/Voice) Website: www.psc.state.md.us/psc/
Jeffrey P. Trout, Esquire
April 11, 2008
Page 2
Accordingly, the Commission directs the Company to procure three blocks of the
residential SOS load beginning January 1, 2009 as proposed by the Company in the April 21,
2008 bidding round, and, unless otherwise directed by the Commission, the remaining load to be
divided evenly between the June 2008 and October 2008 rounds.
By Direction of the Commission,
/s/ Terry J. Romine
Terry J. Romine
Executive Secretary
TJR:lvs