Long-Term Block Contract

The RFP Bidder must qualify as a PJM “Load Serving Entity” during the term of the LTB SMA. As stated in Section 2.4(g) of the LTB SMA, “For the period of time this Agreement is in effect, LTB Supplier shall be: (i) a member in good standing of PJM; (ii) qualified as a PJM “Market Buyer” and “Market Seller” pursuant to the PJM Agreements; and (iii) qualified as a PJM “Load Serving Entity.”
If you are not qualified as a Load Serving Entity at this time, in order to proceed further in the RFP process, the RFP Bidder is required to submit the relevant PJM application materials for qualification as a Load Serving Entity along with its signed LTB SMA by the deadline for the submission of the LTB SMA by 12 PM (noon) on October 24, 2025, along with a statement that indicates that the RFP Bidder does not have any impediments to becoming qualified by PJM as a Load Serving Entity pursuant to its application to PJM and that the RFP Bidder will be qualified as a Load Serving Entity by June 1, 2026.

Section 2.4(c) of the LTB Supplier Master Agreement specifies that the LTB Supplier is responsible for any costs regarding demand response compensation in organized wholesale energy markets. This means that if PJM or another market operator assesses charges for demand response events, such as payments to resources that curtail load in response to market signals, those charges may be allocated to the LTB Supplier under the agreement.
Section 2.4(b) affirms that PPL Electric manages PJM load response programs and retains all associated wholesale revenues from PJM for capacity, energy, and ancillary services. Default Service Customers may participate in demand response programs unless specifically prohibited by retail tariffs. The responsibility for costs is limited to those directly related to demand response compensation in the wholesale market, not costs associated with PPL Electric’s retail programs or benefits.

Curtailment risk is worn equally across products supplied to PPL (block and Default Service). There is no “pecking order” specified in the DSP VI Master Agreement. All suppliers are subject to curtailment based on PJM and Company operational needs, and the agreement does not provide for compensation or indemnification specifically due to curtailment.

Correct, if the Total Exposure Amount for the LTB Supplier is a negative number, it shall be deemed to be zero. PPL Electric will not post Performance Assurance Collateral to the LTB Supplier.

PPL Electric does not share the specific index. Please refer to definition of On-Peak Energy Forward Price and Off-Peak Energy Forward Price in the LTB SMA, pasted below –
On-Peak Energy Forward Price – Shall mean the price for On-Peak Hours for each Billing Month of the delivery period stated in terms of $/MWh as based on commercially available market prices at the Market Price Hub. In the event that the Market Price Hub is no longer available or no longer representative of a transparent trading hub, the Parties will negotiate in good faith to agree upon an alternate liquid price.
Off-Peak Energy Forward Price – Shall mean the price for Off-Peak Hours for each Billing Month of the delivery period stated in terms of $/MWh as based on commercially available market prices at the Market Price Hub. In the event that the Market Price Hub is no longer available or no longer representative of a transparent trading hub, the Parties will negotiate in good faith to agree upon an alternate liquid price.

Current BLITs:
LTB Suppliers are not responsible for any existing Billing Line Items (BLITs). Block Supply is entered as bilateral agreements for energy-only, and suppliers are only obligated to provide energy. Costs for AECs, capacity, ancillary services (including PJM-defined BLIs) are explicitly excluded.

Future BLITs or PJM Charges:
As stated in Section 3 of Appendix C to the LTB SMA: “…if there are any other new FERC-approved PJM transmission charges other than those referred to in Paragraph 1 above or other new PJM charges and costs, charged to network transmission customers, that LTB Supplier believes the Company should recover through retail rates because they are directly related to the Company’s obligations, then Company may file with the PaPUC a request for approval to recover such new costs. LTB Supplier is required to intervene in any such proceeding before the PaPUC. Such new costs can only be charged to the Company to the extent that the PaPUC approves the Company’s recovery of those costs.”

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 that of the LTB Supplier.

You may refer to slide 16 of the Default Service RFP Process and Requirements presentation for more information.

No. Network Integration Transmission Services (“NITS”) costs will not be borne by the LTB Supplier. Pursuant to the Appendix C of the LTB SMA, PPL Electric is responsible for the costs of Non-market-based Transmission Services. Non-market-based Transmission Services includes NITS as stated in Article 1 of the LTB SMA: “Non-market-based Transmission Services shall mean Network Integration Transmission Services (“NITS”), Transmission Enhancement Costs, Expansion Cost Recovery Costs, Non-Firm Point-to-Point Transmission Service Credits, Regional Transmission Expansion Plan (“RTEP”), and Generation Deactivation Charges. These terms shall have the meaning ascribed to them in the PJM Agreements.”

The Block Energy product is a 24×7, 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 LTB 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 LTB SMA for more information.

Long-Term Block Energy is to be scheduled to the day-ahead market.

Long-Term Block Supply is a physical product. PPL Electric Long-Term Block Energy Contracts are Energy-only contracts to supply 24×7 power.  Suppliers are responsible for delivering supply to the Delivery Point (PPL_RESID_AGG), incurring all costs or credits to do so.

Based upon the terms of the contract, (1) PPL Electric shall provide to the LTB Supplier and PJM all information required by PJM, for the purpose of calculating the LTB Supplier’s LTB Supply obligations and (2) the LTB Supplier shall schedule LTB Supply obligations pursuant to the PJM Agreements.

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

PPL Electric Long Term Block Energy Contracts are Energy-only contracts to supply 24×7 power.  Suppliers are responsible for delivering supply to the Delivery Point (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).