The Commission approved the results of DEO's standard choice offer (SCO) and standard service offer (SSO) auctions. The auctions set a new retail price adjustment of $1 per thousand cubic feet, to which is added the NYMEX month end settlement price to establish SCO and SSO rates. The new retail price adjustment will be implemented on April 1, 2011.

On a related note, DEO also filed with the Commission notice of its intent to file an application in which it will, "request Commission approval . . . to combine its next Standard Service Offer and Standard Choice Offer auctions and implement other changes thereafter to facilitate the Company's ongoing transition to a more competitive natural gas commodity market." DEO noted its intent to make the filing within thirty days.

As part of its determination to approve the FirstEnergy and Allegheny merger, the Commission decided to open a broader inquiry into the retail electric markets. Specifically, a Motion by Commissioners Powelson and Coleman explained, "we are mindful of our obligation to ensure a properly functioning and workable competitive retail electricity market pursuant to Section 2811(e). However, rather than attempting to make changes piecemeal as a result of a litigated proceeding, we believe that any issues related to the structure of the retail electricity market in Pennsylvania should be addressed on a statewide level. To that end, we will open a statewide investigation into Pennsylvania’s retail electricity market, with the goal of making recommendations for improvements to ensure a properly functioning and workable competitive retail electricity market exists in the state. This investigation will be initiated within 60 days and will examine both the legislative and the regulatory framework behind Pennsylvania’s competitive retail electricity markets, including an analysis of the current default service model and whether, as currently structured, that model is hindering competition. Additionally, the investigation will include a process to identify interested alternative suppliers of electric generation services qualified to provide default service throughout the state and should result in recommendations for legislative changes, as well as changes the Commission can initiate on its own, to improve competition in Pennsylvania’s retail markets.

In addition to the statewide investigation, we believe there are certain actions that should be taken immediately with regard to the relationships between electric distribution companies (EDCs) and their affiliate electric generation suppliers (EGSs)in order to ensure a properly functioning competitive retail market in Pennsylvania. The following provisions should be added to the Code of Conduct Rulemaking currently underway at Docket No. L-2010 2160942: (1) protections so that EDC-affiliated EGSs do not inappropriately benefit from the use of resources shared with its affiliate EDC; (2 prohibitions on joint EDC/EGS marketing, sales, and promotional activities; (3) provisions to prevent direct or indirect cross-subsidies, such as the use of the affiliate EDC for credit support for affiliated EGS sales; and (4) an examination of whether the Commission should require EDC-affiliated EGSs to change their trade names so as to be dissimilar from both the EDC affiliate and corporate parent.

Regarding FirstEnergy specifically, in addition to the retail market enhancements and protections included in the Settlement Agreement, within 30 days after the close of the merger, the merged entity shall coordinate a meeting with all interested EGSs to address the operational issues set forth in the record of this proceeding including, but not limited to: (1) not implying a right of rescission in customer enrollment confirmation letters; (2) implementing an EDI Advance Notice of Drop; (3) providing PLC factors; (4) developing procedures for seamless moves; and (5) addressing account attribute changes for shopping customers by eliminating any operational or other rules that provide a disincentive for customers to either switch to a competitive electricity provider, or once switched, to remain a customer of an EGS, when a person initiates service or when a customer moves or his or her customer information changes (this should include prohibitions against any rule that requires an applicant to take default service for any period of time before being able to obtain service from an EGS). FirstEnergy shall hold these operational calls with suppliers on a monthly basis for 24 months after consummation of the merger and thereafter as may be necessary. The purpose of these meetings is to assist suppliers with technical and operational issues and to reach mutually satisfactory resolutions for the operational problems as they may arise. FirstEnergy shall commit to working cooperatively with the EGSs
on addressing these issues."

The full text of the Powelson and Coleman Motion is available on the NEM Website.