Duquesne Light Company's Default Service Plan

Bidding Rules

RUL 00001

Question: If, for example, a qualified bidder was currently serving one block of Residential load, procured in a previous solicitation, with a term that would overlap the term offered in the March 2017 auction, would the Residential Load Cap for that particular bidder be reduced by one block? Further, would any blocks awarded in the March 2017 auction affect the bidder’s Load Cap for the September 2017 auction?

Answer: Yes.  For the Duquesne Light auction, eligibility is affected by the amount of load currently being served by the supplier.

RUL 00002

Question: Do tranches that are pulled from the auction and tranches that are shifted into other products have the same chance of being rolled back into a prior round product?

Answer: No, if a bidder reduced the total number of tranches it bid across all products, those “reduced” tranches are more likely to be used for rollbacks than tranches that were “switched” from one product to another. As much as possible, such “reduced” tranches are used first for rollbacks, and then “switched” tranches are used for rollbacks if necessary.

RUL 00003

Question: If tranches are shifted into other products and rolled back into a prior round product, how are those tranches identified or earmarked as rolled back so that the bidder has a clear understanding which tranches are subject to rollback?

Answer: When a bidder increases the tranches it bids on a product, the bidder does not specify which product(s) the tranches are coming from. In the rollback algorithm, there is no explicit identification of any switched tranches used for rollbacks. Each tranche is assigned a unique random number. The random numbers are used to select among “reduced” tranches for rollbacks, and then (if necessary) to select among “switched” tranches for rollbacks. When the random process finds a pair of products for which – in effect – a “switched” tranche could be used for a rollback, it does not report the “from” product and the “to” product because all that matters are the rollbacks in aggregate and satisfying a number of constraints per the auction rules (for example, a bidder’s eligibility). Even if it did report the “from” and “to” products, in general that would be meaningless in the sense that if the algorithm were run a second time, it could produce the same result in terms of number of tranches deemed bid on each product (including rollbacks) but with a different set of “from” and “to” products for the switched tranches.

FAQs Disclaimer

The information provided in the Frequently Asked Questions (“FAQs”) section of the Site has been prepared by Duquesne and its advisors for the purposes of facilitating the Default Service auction process. The information presented and distributed here is subject to update, modification and/or amendment. The information is current as of the posting date. The material presented and distributed here is for informational purposes only and is made available with the understanding that any individual accessing it will use it for the sole purpose of participating in the aforementioned Default Service auction process. 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 Default Service auction process. This information should not be relied upon, and each recipient should make its own independent assessment of the subject opportunity after making all investigations it deems necessary.

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