Master SSO Supply Agreement

AGR 00001

Question: Can you please provide a Word version of the Guaranty so that we can provide a red-lined copy?

Answer: The Word version of the Form of Guaranty has been posted on the Supplier Documents page of the Information Website. 

AGR 00004

Question: Have the seasonal billing factors been set for the delivery period from June 1, 2016 through May 31, 2024, and if so what are they? 

Answer: The seasonal billing factors have been determined in Case No. 14-1297-EL-SSO. The summer factor is 1.1151 and the non-summer factor is 0.9613. These values will be in effect through May 31, 2024.

AGR 00005

Question: According to the Master SSO Supply Agreement, the SSO load excludes "PIPP" customers. Can you provide details of the PIPP program and the rules for customers switching from SSO to PIPP and back?

Answer: Percentage of Income Payment Plan (PIPP) is an extended payment arrangement that requires regulated gas and electric companies to accept payments based on a percentage of the household income. As a part of the Universal Service Fund program enabled by Ohio Substitute Senate Bill 3, the Ohio Development Services Agency will administer the PIPP for electricity customers. Please see the following link for further details: http://development.ohio.gov/is/is_pipp.htm

Customers who remain eligible for PIPP based on their income verification generally will not leave the PIPP program. If/when a customer would leave the PIPP program, they would be able to become an SSO customer or shop with a Competitive Retail Electric Service (CRES) supplier.

AGR 00011

Question: Who is the SSO Supplier's counterparty to the Master SSO Supply Agreement and is there a single contract or three?

Answer: The SSO Supplier's counterparty to the Master SSO Supply Agreement is the FirstEnergy Ohio Utilities. There is one contract.

AGR 00012

Question: Can a bidder participate and win tranches in an auction and then assign the tranches to another affiliate of the same company?

Answer: A bidder may participate and win tranches in the CBP auction and assign those tranches to a company subject to the terms and conditions of the Master SSO Supply Agreement and FEOU consent to the assignment. Please also note, pursuant to the Commission's Opinion and Order in Case No. 10-388-EL-SSO, no bidder may obtain tranches through a post-auction assignment if such assignment, when added to the tranches won during the auction, would cause the bidder to exceed the load cap.

AGR 00015

Question: How is the first sentence of Section 10.3 of the Master SSO Supply Agreement reconcilable with the first two sentences of Section 13.12 of the Agreement? Do the Parties have the right to seek that FERC or the PUCO change any rates or terms in the Master SSO Supply Agreement?

Answer: There is no connection between the two sections.  Section 10.3 clarifies that Section 10.2 does not foreclose a signatory's ability to seek to have a dispute resolved before the PUCO or FERC, rather than a court. Section 13.12 clarifies that changes made by PJM will be adopted automatically for purposes of this agreement, and the parties will cooperate to reflect those changes in the agreement.

AGR 00017

Question: Are each of The Cleveland Electric Illuminating Company, The Toledo Edison Company, and Ohio Edison Company (hereafter each referred to as an “EDC”) able to separately exercise rights and remedies under the Master SSO Supply Agreement or are they able to exercise rights and remedies only collectively as the Companies? For example, is there any danger to an SSO Supplier that a particular EDC will issue an instruction (e.g., regarding margin calls) or make a declaration (e.g., regarding an Event of Default) that is contrary to another EDC under the Master SSO Supply Agreement or make contrary determinations regarding an SSO Supplier’s creditworthiness for purposes of Article 6 of the Master SSO Supply Agreement?

Answer: It would not be expected that the electric distribution utilities under the Master SSO Supply Agreement would render conflicting decisions.  Also note that another FAQ states that, "The SSO Supplier's counterparty to the Master SSO Supply Agreement is the FirstEnergy Ohio Utilities. There is one contract." 

AGR 00018

Question: Are each of The Cleveland Electric Illuminating Company, The Toledo Edison Company, and Ohio Edison Company jointly and severally liable or collectively liable for obligations of the “Companies” under the Master SSO Supply Agreement? If not, please explain what their respective and collective liability is thereunder. Is an SSO Supplier entitled to exercise rights and remedies (e.g., termination) against the Companies collectively, for example in the event that any particular Electricity Distribution Company (EDC) defaults and a consequent Event of Default occurs under the Master SSO Supply Agreement?

Answer: It is the Companies' position that the Companies under the Master SSO Supply Agreement are severally, but not jointly, liable.  Each Company would be responsible for its proportionate share of liability.

AGR 00019

Question: Please confirm that a specified single point of contact will speak for the Companies collectively with respect to notices (other than those required under Article 6) and that a specified single point of contact will speak for the Companies collectively with respect to notices required under Article 6.

Answer: Please see Article 13.1 of the Master SSO Supply Agreement which provides for notifications to the Company.

AGR 00024

Question: Do the FirstEnergy Ohio Utilities have an overarching parent guaranty from FirstEnergy Corp.?

Answer: No, the FirstEnergy Ohio Utilities do not have an overarching parent guaranty from FirstEnergy Corp.

AGR 00027

Question: As this is a sale for resale, is there a risk that the FirstEnergy Ohio Utilities withhold payment to the SSO supplier in the event of SSO customer non-payment or dispute?

Answer: No.  There is no risk that payments to SSO suppliers are withheld in the event of SSO customer non-payment.

AGR 00029

Question: The Master SSO Supply Agreement states that the Delivery Point is the “FE Ohio Aggregate”. Can you please confirm that this is the FE Ohio Residual Aggregate and the corresponding Pnode ID is 1258625176?

Answer: As defined in the Master SSO Supply Agreement: FE Ohio Aggregate means that set of electrical locations determined pursuant to the applicable PJM Tariff, rules, agreements and procedures, representing the aggregate area of consumption for the Companies within PJM and used for the purposes of scheduling, reporting withdrawal volumes, and settling Energy transactions at aggregated load levels, to facilitate Energy market transactions.

Since June 1st, 2015, the Delivery Point PJM name for FE Ohio Aggregate has been FEOHIO_RESID_AGG, PNODE ID 1258625176. PJM at any time can change that specific PJM name creating a successor, superseding or amended name or location.

AGR 00031

Question: The Information Session stated that SSO Customers excludes PIPP Customers; however the Master SSO Supply Agreement does not reflect this. The redline to the Master SSO Supply Agreement shows that the carve of PIPP customers from SSO Service was removed in the current version of the Supply Agreement. Can you please confirm that PIPP customers are excluded from this procurement and will the Supply Agreement be updated to reflect this?

Answer: PIPP customers will be excluded from the procurements in April 2016 and forward per Public Utilities Commission of Ohio order in Case No. 16-247-EL-UNC. This order states that "each electric utility shall notify SSO auction participants for its next SSO auction that the PIPP load will be removed from the auction product and will be procured pursuant to this competitive RFP auction process." Further, the order states that the RFP process to serve the PIPP customers load is only open to CRES suppliers. Therefore, the Master SSO Supply Agreement will not be updated as it states that "SSO Service means Standard Service Offer service that is not provided by a CRES Supplier" and, in accordance with the aforementioned PUCO Order, PIPP load must be served by a CRES supplier.

AGR 00032

Question: Since an SSO Supplier is only getting one payment each month. What is the name of the company whose bank account makes payments each month to an SSO Supplier?

Answer: All payments to SSO Suppliers are made from the FirstEnergy Service Company bank account.

AGR 00033

Question: The SMA has no reference to PJM BLI 2215 (Balancing Transmission Congestion Credits), which started in June 2017. Will this line item be the responsibility of the supplier or the EDC?

Answer:  PJM billing line item (BLI) 2215 (Balancing Transmission Congestion) is the responsibility of the supplier.

AGR 00034

Question: For an Applicant that has Guarantor that has not been incorporated under the laws of the United States, could you please clarify the timing of the submission of the required legal opinion?

Answer: The legal opinion is submitted with the Part 1 application for review and determination of acceptance by FEOU.  After review and acceptance by FEOU, execution is only required if that supplier is a winning bidder.

AGR 00035

Question: Please confirm that the load we will be responsible for is based on the Non Shop load, instead of the Total or Shop load. Based on the documents and the FAQ page, this is our understanding but we want to confirm our thinking. Additionally, can you confirm that the Total SSO Load for any specific hour is calculated as the (NonShop Load * UFE Factor) * (1-Derate Factor)?

Answer: Please refer to Article 2 of the Master SSO Supply Agreement for the details of the supplier obligations. SSO Suppliers are obligated to provide supply in support of the Non-shopping customer needs. Non-shopping customers include those not taking supply from Competitive Retail Electric Suppliers and that are not Percentage of Income Payment Plan (PIPP) customers. The count and load requirements of non-shopping customers is subject to change during the supply period due to many factors including customer migration into and out of the Standard Service Offer. Suppliers are required to provide and are paid for all MWh provided at the delivery point which includes UFE and distribution losses.

AGR 00036

Question: I know that capacity is not a part of the product we are bidding for. However, what is the capacity price that we are charged for serving load on a per MWh base? Do we automatically get charged the capacity price for the ATSI load zone coming from the PJM Capacity Market for the Delivery Year of 2020/2021? Or do we have to go out and procure capacity on the secondary market some way for our estimated load that we will be serving?

Answer: Currently, suppliers are responsible for providing energy, capacity, market-based transmission service and any other service that may be required by PJM to serve the SSO needs of FirstEnergy's Ohio Utilities' customers.  Potential suppliers should review the Master Supply Agreement posted to the Information Website.

Suppliers will be paid by FEOU consistent with the auction results.  Suppliers will be charged by PJM for their reliability share.  For capacity, FEOU is in the ATSI zone. 

AGR 00037

Question: Per Section 12.3 of the Reliability Assurance Agreement (RAA) with PJM, we are required to obtain and maintain insurance as is required of LSE by the states in which it is doing business within the PJM Region. Is this provision applicable to Ohio?

Answer: Per Section 2.9 of the Master Standard Offer Supply Agreement, SSO Suppliers shall be at all times during the Delivery Period (i) a member in good standing of PJM; (ii) qualified by PJM as a “Market Buyer” and “Market Seller” pursuant to the PJM Agreements, and (iii) qualified as a PJM “Load Serving Entity.” Additionally, during the Delivery Period, each of the SSO Suppliers shall be a member in good standing of PJM and shall be responsible, and be liable, to PJM for the performance of its LSE obligations associated with the provision of SSO Supply. Thus, the SSO Supplier is responsible to meet all PJM requirements of an LSE associated with all PJM agreements including the Reliability Assurance Agreement.

AGR 00038

Question: In Appendix G of the Master SSO Supply Agreement, it states that the PJM Billing Lite Item ID# 2106, Non-Zone Network Integration Transmission Service, is the allocated to the supplier. Can you explain why this is not allocated to the buyer, as are all the other transmission related charges and credits?

Answer:

Generally, the transmission and other non-market based line items that are the responsibility of the EDC are either associated with serving load in the ATSI zone directly or are the result of a specific regulatory activity.  Line item #2106 was deemed not to fit either category and was assigned to the SSO Supplier per the FirstEnergy Ohio Utilities Commission approved Electric Security Plan filing in case no. 14-1297-EL-SSO. 

AGR 00040

Question: For the payment to the Load Serving entity, should we expect 3 invoices from Cleveland Electric Illuminating Company, The Toledo Edison Company, and Ohio Edison Company respectively? Or we get one invoice only? If yes, would it be from "FirstEnergy Service Company"?

Answer: Suppliers are invoiced by PJM for their share of the load for the FirstEnergy Ohio Utilities.  There is a single invoice for the supplier obligation across the three entities.  Suppliers receive a single payment from The FirstEnergy Service Company consistent with the outcome of the SSO auctions.

AGR 00041

Question: Why are PJM Billing Line Items 1478 Load Rec. for Bal. Op Reserves, and 1490 Load Rec. for Reactive Services are billed, but the initial charges for 1378 Bal. Op Reserves, 1376 Bal Op Reserves for Load Resp, and 1378 Reactive Services are not?

Answer: At the time of the development of the current Master Standard Service Offer Supply Agreement some out of market costs such as Generation Deactivation / Reliability Must Run payments were being collected by PJM through billing line items ("BLI") 1375, 1376 and 1378. To address this unintended consequence of how PJM was handling these charges at the time, and to avoid the need to reconcile these values through other BLIs or other means, FEOU recommended through the Electric Security Plan proceeding that the applicable BLIs remain the responsibility of the EDC. Since BLIs 1478 and 1490 were not impacted by this issue, those line items were able to remain the responsibility of the SSO suppliers.

AGR 00042

Question: The Master agreement allows the utilities to transfer the agreement without consent to any entity with a Minimum Rating (set at BB-). What is contemplated by this provision? Please explain a scenario where the utilities could transfer the obligation to procure default service load for the utility customers.

Answer: Article 13.3 defines the assignment provisions for both the Companies and Suppliers. Assignment provisions are standard within most supply contracts of this type. The Companies have not contemplated any set of scenarios for the implementation of this article. Additionally, to date, the Companies have not exercised their assignment rights under any executed Master SSO Supply Agreement.

AGR 00043

Question: We understand that there will be a single invoice for the three utilities and that we will receive a single payment (FAQ: AGR 00040). Will the load be broken out by utility or will the invoice show a single total volume?

Answer: The load will be broken out by the three operating companies. .

AGR 00044

Question: What is the purpose of Appendix F – Declaration of Authority?

Answer: At the time that the SSO documents under ESP-IV were created, the Declaration of Authority was the tool used to authorize PJM to transfer specific billing line items (BLIs) that were the responsibility of the EDC from the SSO supplier to the EDC. PJM now uses the PJM eSuites BLI Transfer tool to accomplish the transfer of applicable billing line items between FEOU and the SSO supplier.

AGR 00045

Question: Is Adobe’s Certification function is acceptable for signing contracts/confirms should we win load in next week’s auction? Our regular signatory will be out of the office (and home office) next week, so if we can’t use this, can another officer of the company execute documents for us?

Answer: Electronic (in this case Adobe) or scanned signatures from your authorized representatives are acceptable.  If electronic a “/s/” should be denoted before the signature.

FAQs Disclaimer

The information presented and distributed in the Frequently Asked Questions (FAQs) may be subject to modifications and/or amendments and is provided for informational purposes only. The information provided in the CBP, or on the CBP Information Website, has been prepared to assist bidders in evaluating the CBP. It does not purport to contain all the information that may be relevant to a bidder in satisfying its due diligence efforts. Neither FirstEnergy Corp., the FirstEnergy Ohio Utilities nor the CBP Manager make any representation or warranty, expressed or implied, as to the accuracy or completeness of the information, and shall not, either individually or as a corporation, be liable for any representation expressed or implied in the CBP or any omissions from the CBP, or any information provided to a bidder by any other source. A bidder should check the CBP Information Website frequently to ensure it has the latest documentation and information. Neither the FirstEnergy Ohio Utilities, nor the CBP Manager, nor any of their representatives, shall be liable to a bidder or any of its representatives for any consequences relating to or arising from the bidder’s use of outdated information. 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 CBP process. Each recipient should not rely solely on this information and should make its own independent assessment of the potential value to supply the FirstEnergy Ohio Utilities' load after making all investigations it deems necessary.

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