Contract

With respect to the Default Service RFP, the RFP Manager has posted redlines comparing the Default Service Supplier Master Agreement used under DSP IV to the Default Service Supplier Master Agreement used under DSP V. This redline document can be found on the Documents page under Default Service RFP on PPL Electric’s RFP website.

As set forth in Section 1.1.5 of the Default Service RFP Rules,  Default Service Suppliers will be responsible for supplying the Full Requirements Service including, without limitation, energy, capacity, transmission (excluding Non-market-based Transmission Services as defined in the Default Service SMA), ancillary services, transmission and distribution losses, congestion management costs, and such other services or products that are required to supply Default Service to PPL Electric.

Please see the response to Contract-FAQ-5.   (Response edited on April 2, 2021.)

The Billing line items that are the PPL Electric’s responsibility under the Default Service SMA for Full Requirements are as follows:

BLI #'s	BLI Description	Charge/Credit
1100	NITS	Charge
1108	Trans. Enhancement	Charge
1115	TECA	Charge
1140	Non-firm Point-to-point	Charge
1730	Expansion Cost Recovery	Charge
1930	Gen. Deactivation	Charge
2100	NITS	Credit
2108	Trans. Enhancement	Credit
2140	Non-firm Point-to-point	Credit
2730	Expansion Cost Recovery	Credit
2930	Gen. Deactivation	Credit

Once selected as a winning supplier and Transaction Confirmations have been fully executed, PPL Electric will enter the winning supplier contract into the PJM inSchedule application and will update the above Billing Line Items (BLIs) to be PPL Electric’s responsibility into the PJM BLI application for your review and approval. Please note, the list of BLI’s provided may be updated if PJM adds or alters BLI’s. For example, this occurred with the BLI TECA #1115 (Transmission Enhancement Cost Adjustment), which was not an originally accounted for BLI, but was added as it relates to BLI #1108 and #2108 Transmission Enhancement. If any such changes occur, PPL Electric will communicate the updated BLI’s to winning suppliers.

PPL Electric Block Energy Contracts are Energy-only contracts to supply 24x7 power.  Suppliers are responsible for delivering supply to the Delivery Point (historically called the PPL Zone, now called the PPL_RESID_AGG), incurring all costs or credits to do so.  No Billing Line Items are entered into the PJM BLI tool as the block energy deals are entered as bilateral agreements for energy-only. As such, suppliers providing block energy will be obligated to only provide energy, incurring no costs for AECs, capacity, ancillary services (including PJM defined BLIs).

No, the Default Service SMA is a standard document that must be executed in its current form and without modifications by each RFP Bidder as a condition of its participation in the RFP.

Default Service Block contracts will be entered into the PJM inSchedule system as a bilateral contract between PPL Electric and the Default Service Block Suppliers.  The bilateral contract established will be for energy-only supply, which will be reviewed and confirmed by the DS Block Supplier.

Based upon the terms of the contract, PPL Electric will upload the requisite quantity of load to the PJM Day Ahead (“DA”) market (e.g. for DSP V Solicitation 1, this will be 25 or 50MW per hour for the full term of the contract).

Correct. As set forth in Section 1.1.5 of the Default Service RFP Process and Rules, Default Service Suppliers are not required to provide Alternative Energy Credits (“AECs”) to PPL Electric as a component of this RFP. PPL Electric will procure Default Service AECs through a separate Alternative Energy Credits RFP that will be held in July 2021.

Block Supply is a physical product. PPL Electric Block Energy Contracts are Energy-only contracts to supply 24x7 power.  Suppliers are responsible for delivering supply to the Delivery Point (historically called the PPL Zone, now called the PPL_RESID_AGG), incurring all costs or credits to do so.

Block Energy Products are to be scheduled to the day-ahead market.

The April 2021 Solicitation is the first solicitation under the DSP V Program. As set forth in Section 6.1.5 of the RFP Rules, for the first solicitation in which an RFP Bidder is qualified and submits a Bid Proposal, the RFP Bidder must sign the SMA and submit the SMA by noon EPT on the second business day prior to the Bid Proposal Due Date. If the RFP Bidder is awarded any tranches in any solicitation in the RFP, the signed SMA that was initially submitted will be executed by PPL Electric and provided to the RFP Bidder together with the partially executed Transaction Confirmation forms via email. If the RFP Bidder was not awarded tranches in the solicitation for which a SMA was provided, PPL Electric will retain the SMA for any future solicitation in which the RFP Bidder may again submit a Bid Proposal, in which case it is the responsibility of the RFP Bidder to submit any updated pages of the SMA no later than two (2) business days prior to the Bid Proposal Due Date of the solicitation in which the RFP Bidder is participating.

The April 2021 Solicitation is the first solicitation under the DSP V Program. As set forth in Section 5.4.2 of the RFP Rules, RFP Bidders must execute and submit the current form of the SMA. SMAs executed as part of a prior Default Service Program (i.e. the Competitive Bridge Plan, Default Service Program I, Default Service Program II, Default Service Program III and Default Service Program IV) will not be accepted under DSP V.

No. The Default Service SMA and the Default Service Block SMA are separate documents. Each SMA serves as the governing document for its respective RFP.

No, AEPS obligations are not part of the Full Requirements service under DSP V. PPL Electric is responsible for complying with the AEPS obligations.

The DSB Supplier generally shall be responsible for all costs and services required to scheduling Energy to the delivery point on a firm and continuous basis during the supply period.  Please see Appendix C to the DSB SMA for more information. Please see Contract-FAQ-5, Contract-FAQ-7, and Contract-FAQ-10.

The Block Energy product is a 24x7, energy-only product. Suppliers are responsible for all PJM charges to deliver the product to the delivery point; however, suppliers are not responsible for any non-energy charges once delivered to the delivery point. This includes operating reserve charges or any other similar charges once the product is provided to the delivery point.

The Block Energy product is a 24x7, energy-only product. Suppliers are responsible for all PJM charges to deliver the product to the delivery point; however, suppliers are not responsible for any non-energy charges once delivered to the delivery point. This includes operating reserve charges or any other similar charges once the product is provided to the delivery point.

No Full Requirements Supplier is responsible for any capacity or ancillary service costs associated with block energy supply. These costs are fully borne by PPL Electric once energy is delivered by the Block Supplier to the delivery point.  Suppliers of Full Requirements supply contracts are responsible for all energy, capacity and ancillary charges associated with their specific supply obligations, less those Non-market-based (“NMB”) charges that are pulled back by PPL Electric. Please see Contract-FAQ-4. Block Suppliers are responsible for all costs to deliver the energy to the delivery point, but are then only responsible for providing energy. Block energy supply contracts are only applied to the residential customer group and have no association with supply obligations of the Small C&I and Large C&I customer groups.  

As set forth in Section 1.1.5 of the Default Service RFP Process and Rules, Default Service Suppliers are not required to provide Alternative Energy Credits (“AECs”) to PPL Electric as a component of this RFP. PPL Electric will procure Default Service AECs through a separate Alternative Energy Credits RFP.  AECs are procured through competitive auction each January and July.

Pennsylvania Gross Receipts Tax (GRT) and State Tax Adjustment Surcharge (STAS) are charged by PPL Electric to its default service customers. All default service related GRT and STAS are the responsibility of PPL Electric and not wholesale suppliers participating in the PPL Electric Default Service energy auctions. Beyond GRT and STAS, as set forth in Section 1.1.5 of the Default Service RFP rules,  Default Service Suppliers will be responsible for supplying the Full Requirements Service including, without limitation, energy, capacity, transmission (excluding Non-market-based Transmission Services as defined in the Default Service SMA), ancillary services, transmission and distribution losses, congestion management costs, and such other services or products that are required to supply Default Service to PPL Electric. All charges retained by PPL Electric are identified in the Supplier Master Agreement under the definition of “Non-market-based Transmission Services”. Any charge not listed in this definition is of the responsibility of the Default Service Supplier.

Default Service Suppliers that provide full requirements service are responsible for all costs (energy, capacity, and ancillary services), except those that are specifically pulled back by PPL Electric in the form of Non-Market-based Service Costs. NITS charges are the responsibility of PPL Electric, not the Default Service Supplier. Please see Contract-FAQ-4.

Yes, a current Default Service Supplier with a previously executed Default Service SMA for the currently effective Default Service Program is not required to submit a new executed Default Service SMA. As set forth in Section 6.1.5 of the Default Service RFP Rules, “If the RFP Bidder is awarded any tranches in any solicitation in this RFP, the signed Default Service SMA that was initially submitted will be executed by PPL Electric and provided to the RFP Bidder together with the partially executed Transaction Confirmation forms via email. The execution of a Transaction Confirmation is all that will be required in subsequent solicitations wherein an RFP Bidder that has previously executed the Default Service SMA in a satisfactory manner is awarded additional tranches. If the RFP Bidder was not awarded tranches in the solicitation for which Default Service SMA was provided, PPL Electric will retain the Default Service SMA for any future solicitation in which the RFP Bidder may again submit a Bid Proposal, in which case it is the responsibility of the RFP Bidder to submit any updated pages of the Default Service SMA no later than two (2) business days prior to the Bid Proposal Due Date of the solicitation in which the RFP Bidder is participating.” This means that if a Default Service Supplier has a fully executed Default Service Supply SMA dated April 2021 or more recent, a new Default Service Supply SMA is not required.

The RFP Manager has posted redlines comparing the Default Service SMA updated on February 26, 2024, to the Default Service SMA updated on February 27, 2023. For avoidance of doubt, the only updates are limited to changes in contact information of PPL Electric. This redline document can be found on the Documents page under Default Service RFP on PPL Electric’s RFP website. A current Default Service Supplier with a previously executed Default Service SMA for the currently effective Default Service Program is not required to submit a new executed Default Service SMA.

We cannot advise you of the Guaranty Amount to be provided in the optional paragraph of the Guaranty. If you are relying on the creditworthiness of another entity, then PPL Electric will grant you an unsecured credit based on the terms of the Default Service SMA only if an acceptable guaranty is provided by the guarantor. As stated in Section 6.4(c) of the Default Service SMA “The Maximum Credit Limit to cover the Total Exposure Amount that could be provided through the Guaranty (see standard format in Exhibit 5) will be determined based on the credit matrix table for Guarantors on Appendix A. The DS Supplier will be granted a Credit Limit equal to the lesser of (i) the amount of the Guaranty as provided to the Company at the time this Agreement is executed as such amount may be modified in any amended or substitute Guaranty provided to the Company during the term of this Agreement, or (ii) the applicable Maximum Credit Limit as determined in Appendix A. The DS Supplier, however, may not increase or substitute its Guaranty for the purpose of increasing its applicable Credit Limit during the time period after the Company has made a Margin call, but before the DS Supplier has posted the required performance assurance collateral … to cover Margin. …”

No modifications will be made to the products available in the RFP or to the Default Service SMA. The Default Service SMA is a standard document that must be executed in its current form and without modifications by each RFP Bidder as a condition of its participation in the RFP.  The products in the RFP and the Default Service SMA was approved by the Pennsylvania Public Utility Commission on December 17, 2020 in Docket No. P-2020-3019356.

In reference to the Default Service SMA, there has been no update since February 26, 2024. In reference to other documents under the “Documents” section of the RFP Website, the below documents have been updated since the April 2024 Default Service solicitation:

• Addendum 1 to the Default Service RFP Process and Rules

• Addendum 2 to the Default Service RFP Process and Rules

• Appendix 6b Confirmation of Credit and Financial Information

• Appendix 9, Binding Bid Agreement

• Preliminary List of Acceptable Modifications to Credit Instruments

The products being procured in this October 2024 Default Service RFP are fully governed by the Default Service Rules and the Default Service SMA that was approved by the Pennsylvania Public Utility Commission on December 17, 2020 in Docket No. P-2020-3019356.

Please note that the process for completing the PJM Declaration of Authority Attachment A has moved online and is to be completed via PJM Tools. As stated in Section 2.4(f) of the Default Service SMA, the PJM Declaration of Authority is used to allocate PJM costs, in association with the shortnames created when a new Default Service Supplier is onboarded. This is a standard process in PJM Tools for any supplier taking on full requirements service obligations so that the correct Billing Line Items (BLI) can be allocated in the PJM system. Further, as stated in Section 2.4(i) of the Default Service SMA, “In the event PJM requires that the Declaration of Authority be amended after execution by the DS Supplier, DS Supplier agrees to execute a revised PJM Declaration of Authority in accordance with PJM requirements.” As such, all questions about PJM Tools including the assignment of BLI for serving load and supply full requirements service should be directed to PJM.