Model B: Variables/Series: FDI, HC, CBRT, POLR
Your EDC, which serves as your default supplier or POLR
(Provider of Last Resort), takes over if your supplier cannot meet your needs.
Closing on the transaction is conditioned on Pennsylvania Public Utility Commission (PUC) approval of Duquesne Light's POLR plan, currently anticipated to occur in the summer of 2004, as well as other related regulatory approvals.
As a means of managing supply risks and at the same time building long-term value for the company, Duquesne Light is focusing on a portfolio strategy to supply its post-2004 POLR load.
and bundled utility rates that penalize customers for switching by imposing extra stranded cost charges, exit fees, and other regulatory fees must be eliminated.
Ohio legislation allows electric customers the free option to switch to lower cost generation providers, either the POLR
or alternative electricity generation suppliers.
Current ratings assume the cost of procuring power to meet PECO's POLR
obligations after 2010 will be passed through to customers.
West Penn has filed a request with the PUC to proceed with procurement auctions starting in 2008 for POLR capacity needs beginning in 2011.
The company contractually purchases a majority of the power necessary to serve POLR customers from affiliate, AE Supply.
The ratings and Stable Outlook of West Penn reflect Fitch's expectation that West Penn's net revenue margin will improve when power purchase costs come into line with generation rates beginning in January 2009, and also that West Penn will receive approval from the Pennsylvania PUC to begin procuring power in an auction process for 2011 POLR
load requirements and to allow full recovery of power costs through customer tariffs.
While the residential generation rate cap and associated power supply contract for the Maryland portion of Potomac Ed's service territory terminate at the end of 2008, Potomac Ed retains residential POLR
obligations through 2012.
AE Supply's cash flow should improve as a result of annual rate increases in WP's POLR
generation rates that will be passed through to AE Supply and growth in the percentage of total power sales made at higher PJM market rates, assuming no prolonged outages at base-load generation plants.