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Answers to Frequently Asked Questions are provided in this section. 

The first posting of FAQs is in August. The last posting of FAQs is in the latter part of January, after bidders are registered to participate in the Auctions. From that point, questions and answers are emailed directly  to Registered Bidders and are not posted to the BGS Auction website. Questions that are not from Registered Bidders or their advisors are answered strictly as time permits.

Your use of this page (site) constitutes an acceptance of the Terms as  described in the disclaimer.

 

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FAQ-84

The archived JCP&L excess generation data seems to contain daylight savings data in November. Is November daylight savings data available in the non-archived JCP&L excess generation data files?


Thank you for bringing this to our attention.  The following files have been updated and posted to the monthly data page of the BGS Auction website:
  • JCP&L_Total_Retail_Hourly_Excess_Generation_December_2023_Update
  • JCP&L_BGS_Hourly_Excess_Generation_December_2023_Update
  • JCP&L_BGS_Hourly_Excess_Generation_December_2023_Update
  • JCP&L_BGS_CIEP_Hourly_Excess_Generation_December_2023_Update
Please note that each bidder is entirely responsible for analysis of the data provided. All data are provided for informational purposes only. The EDCs have compiled the data in good faith from sources believed by the EDCs to be reliable but do not warrant the accuracy of the data. It is the responsibility of users of the posted data to determine whether and how they should be applied; by utilizing the data, users assume all risk associated therewith.
 
Please also note that archived data series (pre-June 2020) are provided strictly for the convenience of bidders.  These data series are not reviewed and the BGS Auction Manager does not answer questions regarding these data series.


1/12/2024, in Data.
FAQ-83

When are the Pre-Auction Letter of Credit and Part 2 Application due? What happens if we receive a deficiency notice from the Auction Manager?


The Pre-Auction Letter of Credit must be provided with the Part 2 Application due on January 10, 2024 by 12PM (noon) Eastern Prevailing Time. If a Qualified Bidder’s Part 2 Application is incomplete or requires clarification, the Qualified Bidder will receive a deficiency notice from the Auction Manager. The Qualified Bidder will have until noon on the Part 2 Application Date, or until 6 PM on the business day following the business day during which a deficiency notice is sent, whichever comes later, to respond. If a Qualified Bidder’s Pre-Auction Letter of Credit is not in a form acceptable to the EDCs, the Qualified Bidder will likewise receive a deficiency notice. The Qualified Bidder will have until noon on the Part 2 Application Date, or until 6 PM of the second business day following the business day during which a deficiency notice is sent, whichever comes later, to respond.



1/11/2024, in Pre-Auction Security.
FAQ-82

Where is the “EDC Municipal Aggregation Enrollment” file posted?


The “EDC Municipal Aggregation Enrollment” file, containing data through January 2024, has been posted to the additional data page of the BGS Auction site.



1/11/2024, in Data.
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FAQ-81

Which data source will be used to determine the forward market energy prices if the Mark-to-Market Amendment goes into effect?


It would be the intention of the EDCs to use data from Intercontinental Exchange, Inc. (“ICE”) as the single source used in determining the forward market energy prices in the BGS-RSCP Supplier Master Agreement; however, as stated in the Board Order Approving the EDCs’ Joint Proposal, ICE does not need to be the single source (the November 17, 2023 Board Order is available here).

Please note that the change to the definition of “Forward Market Price” will only take effect if all BGS-RSCP Suppliers serving tranches won in the 2022 and 2023 BGS-RSCP Auctions execute the Mark-to-Market Amendment (“MtM Amendment”) by January 26, 2024.  Execution of the MtM Amendment is not mandatory; the change will not go into effect for any BGS-RSCP Supplier, including those suppliers that win tranches in the 2024 BGS-RSCP Auction, if all suppliers serving tranches won in the 2022 and 2023 BGS-RSCP Auctions do not sign the MtM Amendment.  

The EDCs filed the final form of the MtM Amendment as part of their compliance filing.  The final form of the MtM Amendment is available here.  Section 2 of the MtM Amendment details the conditions that must be met by January 26, 2024 for the MtM Amendment to take effect on June 1, 2024.



1/9/2024, in Supplier Master Agreement .
FAQ-80

What form of Pre-Auction Security am I required to submit with the Part 2 Application? Are two separate pre-auction letters of credit required for the BGS-CIEP and BGS-RSCP Auctions?


If participating in both the BGS-CIEP and BGS-RSCP Auctions, each Qualified Bidder, regardless of the creditworthiness evaluation of such Qualified Bidder, must provide separate pre-auction letters of credit with their Part 2 Application.

For the BGS-CIEP Auction, the pre-auction letter of credit must be in an amount of $375,000 per tranche of the Qualified Bidder’s indicative offer at the maximum starting price. 

For the BGS-RSCP Auction, the pre-auction letter of credit must be in an amount of $500,000 per tranche of the Qualified Bidder’s indicative offer at the maximum starting price.  For a Qualified Bidder to the BGS-RSCP Auction that is relying on the financial standing of a creditworthy guarantor, such Qualified Bidder is required to provide a Letter of Intent from the guarantor in an amount of $1.9M per tranche of the Qualified Bidder’s indicative offer at the maximum starting price.  (Alternatively, the Qualified Bidder can provide a pre-auction letter of credit for the full amount, namely $2.4M per tranche of the Qualified Bidder’s indicative offer at the maximum starting price.)  

Standard forms of the pre-auction letter of credit for BGS-RSCP Bidders, of the pre-auction letter of credit for BGS-CIEP Bidders, and sample letters of intent are available on the BGS Auction website at the link below. 

https://bgs-auction.com/bgs.bidinfo.cc.asp



1/4/2024, in Pre-Auction Security.
FAQ-79

Can you provide a redline for the Mark-to-Market (“MtM”) Amendment relative to the July Filing?


The MtM Amendment was not included as part of the EDCs' 2024 Joint BGS Proposal, and as such, a redline will not be provided. The Final MtM Amendment is posted to the Contract and Credit page of the ''bidder info" tab of the auction website.



1/2/2024, in Supplier Master Agreement .
FAQ-78

Can you please provide redlines between the July Filing Supplier Master Agreements (“SMAs”) and the Final SMAs for the 2024 BGS Auctions? Can you please also provide redlines between the Final SMAs for the 2023 BGS Auctions and the Final SMAs for the 2024 BGS Auctions?


The following redlines have been posted to the Contract and Credit page of the ''bidder info" tab of the auction website:
  • BGS-CIEP 2024 July Filing SMA vs BGS-CIEP 2024 Final SMA
  • BGS-RSCP 2024 July Filing SMA vs BGS-RSCP 2024 Final SMA
  • BGS-CIEP 2023 Final SMA vs BGS-CIEP 2024 Final SMA
  • BGS-RSCP 2023 Final SMA vs BGS-RSCP 2024 Final SM


1/2/2024, in Supplier Master Agreement .
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FAQ-77

Is cash an acceptable form of pre-auction security?


Cash is not acceptable as pre-auction security.  Each Qualified Bidder must submit a Pre-Auction Letter of Credit (or Bid Bond) with its Part 2 Application.  Furthermore, a Qualified Bidder in the BGS-RSCP Auction may also be required to provide additional pre-auction security in the form of a letter of intent to provide a guaranty or a letter of reference.



12/21/2023, in Pre-Auction Security.
FAQ-76

Our Notification of Qualification for the BGS-RSCP Auction stated that we may submit a Letter of Reference for purposes of meeting the pre-auction security requirements of the Part 2 Application. What is the purpose of a Letter of Reference?


The total amount of pre-auction security required with the Part 2 Application for the BGS-RSCP Auction is $2.4M per tranche of the indicative offer at the maximum starting price.  A Pre-Auction Letter of Credit in the amount of $0.5M per tranche is always provided and the Notification of Qualification states for each bidder how the remaining $1.9M per tranche should be provided.  If a bidder is asked to provide a Letter of Reference from a bank, this Letter of Reference is simply to state that as of the date of the letter, there is a sufficient unused credit facility between the bidder and the bank to cover the $1.9M per tranche of the indicative offer at the maximum starting price. The Letter of Reference has two portions: a statement from the bank; and a certification from the bidder.

Three (3) samples for the Letter of Reference are made available to bidders on the Contract and Credit page of the BGS Auction website.  A bidder that uses any of these samples can be assured that the Letter of Reference will be acceptable to the EDCs.  If a bidder uses a different Letter of Reference and it is not acceptable to the EDCs, the bidder will have two business days to provide a replacement document.

Please note that a bidder always has the option, instead of providing a Letter of Reference for $1.9M per tranche of the indicative offer at the maximum starting price, to increase the amount of the Pre-Auction Letter of Credit to $2.4M per tranche of the indicative offer at the maximum starting price.



12/21/2023, in Pre-Auction Security.
FAQ-75

Can the EDCs provide load forecasts?


The information you are requesting cannot be made available from the EDCs at this time as the EDCs only provide actual historical data.



12/21/2023, in Data.
FAQ-74

Are the JCP&L PLA files adjusted for excess generation? Are the JCP&L values for capacity PLA and transmission NSPL scaled?


The JCP&L PLA files posted to monthly data page do not need to be adjusted for excess generation. 

The JCP&L BGS-CIEP PLA files posted to the monthly data page are based on net BGS-CIEP load (net of excess generation). For PJM settlement purposes, JCP&L (consistent with the other EDCs) reports the net BGS-CIEP load (i.e., net of on-site generation) to PJM. The net BGS-CIEP load (netted against excess generation) is assigned to suppliers based on BGS-CIEP responsibility shares. 

The Hourly Excess Generation (JCP&L only) files are provided on the Monthly Data page so that bidders may develop JCP&L load data that is consistent with how JCP&L load has been reported to PJM. For data prior to August 1, 2022, to develop JCP&L load data that is consistent with how JCP&L load has been reported to PJM for settlement purposes, sum the excess generation with the load reported in the BGS Data Room. Beginning August 1, 2022, JCP&L load data no longer needs to be summed with excess generation to be consistent with the JCP&L load reported to PJM for settlement purposes.

For JCP&L, the following file(s) are already scaled and do not need to be adjusted by the applicable Daily Zonal Scaling Factors: Total Retail PLA.  As of June 1, 2017, the following files should be adjusted by the applicable Daily Zonal Scaling Factors: Total BGS PLA, BGS-CIEP PLA, and BGS-RSCP PLA.  As of September 1, 2022, the following files should be adjusted by the applicable Daily Zonal Scaling Factors: BGS-CIEP Eligible PLA and BGS-RSCP Eligible PLA.

REVISED 2-1-2024

 



12/21/2023, in Data.
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FAQ-73

Are BGS Suppliers responsible for costs associated with the purchase of TRECs, SREC-IIs, and ORECs?


Load Serving Entities (“LSEs”) in New Jersey are responsible for complying with Transition Renewable Energy Certificate (“TREC”) obligations, with SREC-II obligations arising from the Solar Successor Incentive Program (“SuSI”), and with Offshore Wind Renewable Energy Certificate (“OREC”) obligations as a component of the BGS Supplier’s Class I obligation under New Jersey’s Renewable Portfolio Standards (“RPS”) requirements. However, LSEs (including winners of the 2024 BGS Auctions) are not responsible for purchasing TRECs, SREC-IIs, and ORECs to satisfy these obligations. 

Regarding the TREC and SREC-II obligations, it is our understanding that the TREC and SREC-II program administrator will purchase TRECs and SREC-IIs on a monthly basis from eligible system owners with accounts on PJM-EIS GATS. TRECs and SREC-IIs will be retired to the EDCs’ joint GATS account and BPU Staff will allocate them to BGS Suppliers annually based on the BGS Supplier’s market share of electricity supplied during an energy year. Allocation of the statewide TREC obligation and the statewide SREC-II obligation to suppliers will follow the method set forth in N.J.A.C. 14:8-2.3 (r) and (t). It is our understanding that the Transition Incentive and SuSI program costs are collected by the EDCs from ratepayers. The costs are based on the number of TRECs and SREC-IIs purchased under the applicable program and retired by the applicable program administrator on behalf of LSEs in New Jersey, multiplied by the value of each TREC or SREC-II. Please see New Jersey Administrative Code 14:8-2.3 for further information.

Regarding the OREC obligations, the OREC Funding Mechanism codified in N.J.A.C. 14:8-6.6 describes the mechanism for payment and retirement of ORECs to meet the offshore wind renewable portfolio standard requirement set by the Board. As currently proposed, the EDCs will collect the charges for these ORECs, on behalf of suppliers, from ratepayers through a non-bypassable charge. The EDCs will pay the developers of off-shore wind projects on a monthly basis. Upon receipt of payment, developers of off-shore wind projects will transfer the ORECs to the suppliers’ account so that they can be retired. Thus, while BGS suppliers have the responsibility to retire ORECs, BGS suppliers bear no cost to acquire the ORECs. OREC obligations constitute a component of Class I RPS requirements. Please see New Jersey Administrative Code 14:8-6, including the Funding Mechanism Rules, for further information.



12/21/2023, in Renewable Portfolio Standards.
FAQ-72

Will the EDCs execute a non-disclosure agreement prior to reviewing the financial information submitted with the Part 1 Application? Alternatively, can you please confirm that any non-public financial information submitted with the Part 1 Application will be kept confidential?


The EDCs will not execute a non-disclosure agreement for the financial information submitted with the Part 1 Application.  

Section IV.B. Confidentiality of Auction Information of the EDCs’ Joint Proposal contains a list of information that the EDCs proposed to remain confidential throughout the Auction Process and specifically, the confidentiality of financial information provided in the Applications is addressed in the Order of the New Jersey Board of Public Utilities (“Board”) approving the EDCs’ Joint Proposal.  In its Order from November 17, 2023, the Board re-affirmed the confidentiality provisions of its December 1, 2004 Order in Docket No. EO04040288 (“2004 Order”).  In the 2004 Order, the Board specified that information provided in the Applications (other than information already released publicly) is proprietary commercial and financial information, and deemed confidential.  This would include all financial data that is not available publicly.  Further, this 2004 Order makes such information an exception to the Open Public Records Act (“OPRA”) so that any request to the Board’s custodian for this information would be denied.  Procedures for the administration of the BGS Auctions are in place to ensure that the auction process is conducted in accordance with the Board’s Orders and decisions.  

Bidders are advised that the information they provide as part of the application process will be treated as confidential on the front page of the Part 1 Application, which states that: “Any information in this application will be provided on a confidential basis to the BGS Auction Manager Team and representatives from the New Jersey Board of Public Utilities (“Board”). Any information that you provide in this application, except for information regarding bidding agreements provided in Section 10, can be provided on a confidential basis to a committee of the Electric Distribution Companies (“EDCs”).”

The 2004 Order is provided as Attachment C in the most recent Board Order approving the 2024 Auction Process and is also posted to the BGS Orders page of the “auction” tab on the BGS Auction website.



12/4/2023, in Application.
FAQ-71

Can you please provide a redline document comparing this year’s Auction Rules to last year’s Auction Rules?


The Auction Manager does not provide redlines of the Auction Rules.  As noted in the EDCs’ July filing, there have been no material changes to the Auction Rules.



12/4/2023, in Auction Rules.
FAQ-70

Will the EDCs review a draft Pre-Auction Letter of Credit prior to our bank issuing such document?


With the Part 2 Application, bidders must submit their executed Pre-Auction Letters of Credit. The EDCs do not provide courtesy reviews of draft documents. Bidders must use the final version of the Pre-Auction Letter of Credit or include only modifications that are acceptable to the EDCs on an optional basis as posted to the BGS Auction website. The list of modifications acceptable to the EDCs on an optional basis is available in the document entitled “Final Acceptable Modifications to Pre-Auction Letter of Credit” posted to the “application process” page of the “bidder info” tab.



11/27/2023, in Pre-Auction Security.
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FAQ-69

If we present financial information for a Guarantor in the Part 1 Application and we are qualified on that basis, can we change the entity upon whose financial standing we are relying at a later time?


No.  The Auction Manager provides to each Qualified Bidder a notification of qualification that includes the requirements for presenting pre-auction security with the Part 2 Application. These requirements are based on the financial information provided in the Part 1 Application.  In particular, a Qualified Bidder that named a Guarantor in the Part 1 Application is required either
  • to provide a Pre-Auction Letter of Credit in an amount of $500,000 per tranche of the indicative offer at the maximum starting price and a Letter of Intent to Provide a Guaranty in an amount of $1.9M per tranche of the indicative offer at the maximum starting price; or:
  • to provide a Pre-Auction Letter of Credit in an amount of $2.4M per tranche of the indicative offer at the maximum starting price.
There is no mechanism or opportunity for the Qualified Bidder to request a creditworthiness assessment of another entity (including itself) after the Part 1 Application process is complete.


11/20/2023, in Pre-Auction Security.
FAQ-68

In the event that we become a winning bidder in the Auction, is it required for the Authorized Representative or the Officer who names the Authorized Representative in the Part 1 Application to be the individual who executes the applicable Supplier Master Agreement (“SMA”)?


Neither the Authorized Representative, nor the Officer who names the Authorized Representative in the Part 1 Application, is required to be the individual who would execute the applicable SMA should the bidder win at the Auction.

In the event that you become a winning bidder in the Auction, the entity that executes the applicable SMA must be the same entity that has agreed to the terms of the SMA in the Part 1 and Part 2 Applications. However, the individual who signs the SMA can be any officer or representative who is authorized to execute contracts and bind the bidder.



11/20/2023, in Supplier Master Agreement .
FAQ-67

Is an Applicant to the BGS Auctions required to be a Load-Serving Entity (“LSE”) in the PJM Interconnection, L.L.C. (“PJM”) at the time of submitting the Part 1 Application? 


No, the Applicant is not required to be a PJM LSE at the time of submitting the Part 1 Application. However, if the Applicant is not a PJM LSE at the time of submitting the Part 1 Application, the Applicant must certify in its Part 1 Application that there exist no impediments for the Applicant to become a PJM LSE by the start of the supply period (by using the LSE Certification Insert labelled #P1-4).



11/20/2023, in Application.
FAQ-66

We do not have an office in New Jersey and we do not have legal counsel in New Jersey. What are our options to comply with the requirements of Section 3 of the Part 1 Application? 


Section 3 of the Part 1 Application does not compel the Applicant to have an office in New Jersey or to have legal counsel in New Jersey. Section 3 requires that the Applicant name a legal representative; for purposes of the Part 1 Application, a legal representative is a person or company that agrees to accept service of process on the Applicant’s behalf. The legal representative can be either legal counsel or a representative agent. The individual or company serving as the Applicant’s legal representative must provide an address in New Jersey. If a company agrees to accept service of process on your behalf, an individual from that company must sign the Legal Representative Insert (labelled #P1-3).  The name of the individual and contact information must be provided.



11/20/2023, in Application.
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FAQ-65

Entity A is contemplating selling a hybrid swap/credit-support product to Entity B, akin to a contingent credit sleeve.  Entity A and Entity B are each a BGS Supplier.  It is possible that each intends to bid in the next auction; however, these entities have not and do not intend to discuss with each other participation in future auctions.  Further, Entity A and Entity B are not related entities, always bid separately, and have no agreements related to bidding in the auctions in any way.  

The transaction can be described as follows.  Entity B would pay Entity A a premium in exchange for Entity A standing ready and posting cash or a letter of credit directly to the EDC (not Entity B) if the PJM forward energy price exceeded a particular threshold.  This would assist Entity B to meet its credit obligations under an existing Supplier Master Agreement.  

This "contingent credit sleeve" product is negotiated after the close and certification of the results of the last BGS Auctions, and before the beginning of the next BGS Auction cycle.  This product is not for the purposes of bidding in future BGS Auctions.  Are there any issues with such a transaction under the Association and Confidential Information Rules?


As we understand your inquiry, Entity A would sell to Entity B a product that would obligate Entity A to post margin as an agent for Entity B when forward prices for PJM exceeded a certain threshold.  As you have described the product, the product applies for BGS obligations only and not for a wider range of trading obligations.  Further, it applies to BGS load won in Auctions already held and ruled upon by the BPU.  

There is no issue, with respect to BGS certifications that have been made, with the two entities transacting such a product that relate to positions won in past auctions once the Supplier Master Agreements have been signed for the relevant supply period.  Your concern is also whether entering into such a transaction could make it difficult for Entity A or Entity B to make the certifications required to participate in future BGS Auctions.    

Without going through each certification in detail, an entity will generally be required to certify in future auctions that the entity has no bidding agreements, no knowledge of another bidder’s bidding strategy, no knowledge of another bidder's preference for bidding on any product, or no knowledge of another bidder's valuation of any product in the upcoming auction.  You will also be required to certify that you have not revealed any such information to anyone, including another bidder.  It does not seem that selling the product you describe, in the particular timeframe you describe, related only to past BGS obligations, would create any type of bidding arrangement for a future auction, would reveal confidential information with respect to bidding strategy, would reveal either entity’s valuation of the BGS product for future auctions, or would reveal an entity's preference for bidding on any specific product.  Hence, it would seem that if Entity A and Entity B entered into this contingent credit sleeve arrangement in the timeframe you describe, the transaction would not have an impact on the certifications to be made for future auctions.  

Our response does not contemplate, and would not necessarily apply, to a situation in which Entity A and Entity B entered into a general corporate agreement where Entity A would be supporting all of Entity B’s trading obligations.  Similarly, we are assuming that the arrangement is not a transaction that would entail Entity A conducting due diligence with respect to Entity B’s trading operations, or BGS supply arrangements, or valuations (and vice versa).  Further, we are assuming, as you have stated, that this credit product is not for the purposes of bidding in future BGS Auctions.  Were any of these assumptions to be incorrect, the guidance we are providing could differ as the level of knowledge that each entity may have about the other’s valuation methods and preferences could make it difficult to make some of the required certifications.  However, trading a contingent credit sleeve on a one time basis, without a review of the other entity’s trading strategies and BGS hedging and supply arrangements, does not in itself appear to pose any problem for future auctions.  Finally, we note that the transaction you describe would not "make" one entity a financial institution for the other, and that any provisions for additional information to be provided to a financial institution under the Association and Confidential Information Rules would not apply to the circumstance described.



11/20/2023, in Association and Confidential Information Rules.

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