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Frequently Asked Questions - #48

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FAQ-48

Can a marketer qualified for the BGS-CIEP Auction contract with a generator/wholesaler, who is also qualified for the BGS-CIEP Auction, for the generator/wholesaler to supply certain ancillary services (i.e., those that need not be purchased from PJM, such as ancillary services of schedule 3, voltage regulation) and Renewable Energy Credits (“RECs”) tied to the volume of BGS-CIEP load should the marketer win at the BGS-CIEP Auction? Is this permissible given that the marketer will not purchase capacity or energy from the generator in connection with BGS-CIEP supply?  Could these two Qualified Bidders, in good faith, make all the certifications in the Part 2 Application for the BGS-CIEP Auction?


No, they could not.  Any contractual arrangements for both certain ancillary services and RECs tied to the volume of BGS-CIEP load should the marketer be a winner at the auction would reveal confidential information relative to the marketer's bidding strategy.  The products together account for most requirements that a BGS-CIEP Supplier must meet and that involve price risk.  For energy, the EDC pays the BGS-CIEP Supplier the zonal real-time locational marginal price, and the BGS-CIEP Supplier does not generally face price risk for energy.  For capacity, the BGS-CIEP Supplier pays the price from the Reliability Pricing Model (“RPM”), which is known before the auction begins.  A generator that is qualified for the BGS-CIEP Auction and that sells a contract to cover the variable ancillary services and RECs needed to serve BGS-CIEP to a marketer that is also qualified for the BGS-CIEP Auction, has knowledge of confidential information relative to the bidding strategy of the marketer. The generator would not be able to certify that it does not have any knowledge of confidential information relative to the bidding strategy of another Qualified Bidder.  The marketer may not be able to certify that it does not have any knowledge of confidential information relative to the bidding strategy of the generator if it has acquired knowledge of the generator's estimation of the risks associated with serving BGS-CIEP load through the transaction.  Further, the marketer would not be able to certify that it has not disclosed confidential information relative to its own bidding strategy to another Qualified Bidder in the BGS-CIEP Auction.



11/15/2021, in Association and Confidential Information Rules.

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