Supplements A, B, and C to the 2025 BGS-RSCP Supplier Master Agreement (“BGS-RSCP SMA”) filed on July 1, 2024, specify the conditions under which BGS-RSCP suppliers that serve tranches procured in the 2025 BGS-RSCP Auction will be paid (or will pay) for the difference between the rate paid by BGS-RSCP suppliers for capacity and the Capacity Proxy Price in the 2025/2026, 2026/2027, and 2027/2028 delivery years, respectively.

As described in the EDCs’ Proposal for Basic Generation Service Requirements to be Procured Effective June 1, 2025 (“Joint Proposal”), the EDCs proposed setting a Capacity Proxy Price for each of the 2025/2026, 2026/2027, and 2027/2028 delivery years that suppliers would be able to incorporate into their bids in the event that the results of PJM’s base residual auction (“BRA”) for that delivery year are not known at least five business days prior to the start of the BGS-RSCP Auction.  The EDCs also proposed that if the results of the BRA for the 2025/2026 delivery year, the 2026/2027 delivery year, or the 2027/2028 delivery year are known at least five business days prior to the start of the BGS-RSCP Auction, the Capacity Proxy Price for the applicable delivery year will no longer be needed and will be voided (Joint Proposal at page 8). As the results of the BRA for the 2025/2026 delivery year were made available in July 2024, the Capacity Poxy Price for the 2025/2026 delivery year and Supplement A to the BGS-RSCP SMA are voided in accordance with the EDCs’ Joint Proposal.

As described in the Joint Proposal, winning BGS-RSCP suppliers will be paid the closing price (cents/kWh) in the BGS-RSCP Auction for load served. In the 2026/2027 and 2027/2028 delivery years, BGS-RSCP suppliers will additionally be paid (or will pay) the difference between the rate paid by BGS-RSCP suppliers for capacity and the final Capacity Proxy Price for that delivery year. These payments will only occur in the 2026/2027 delivery year or in the 2027/2028 delivery year, even if the value of the capacity price for that delivery year is known prior to the start of that delivery year - but only if the results of the BRA for that delivery year are not known at least five business days prior to the start of the BGS-RSCP Auction. This construct provides certainty to BGS-RSCP suppliers that they will be fully compensated for the actual rates for capacity that they pay in the 2026/2027 and in the 2027/2028 delivery years (Joint Proposal at pages 16-17).

Please see each EDC’s rate design spreadsheet posted to the Additional Data Room of the BGS Auction website for example calculations of the true-up mechanism described in the Supplements to the BGS-RSCP Supplier Master Agreement.

The EDCs’ Joint Proposal is available on the BGS Proceeding page of the BGS Auction website.