Sanctions can be imposed for such a violation.  These sanctions include loss of all rights to serve any BGS Load won in the auction, forfeiture of the Pre-Auction Letter of Credit, liquidated damages of $100,000, action under state or federal laws, debarment from participation in future BGS Auctions, prosecution under applicable state and federal laws, or other sanctions that the Board may consider appropriate.  The Auction Manager will make a recommendation to the Board on a possible sanction and the Board will make the final determination. 

It depends on the certification.  Some certifications of the Part 2 Applications are required for a Qualified Bidder to become a Registered Bidder.  For example, a Qualified Bidder must certify that, other than agreements disclosed in the Part 1 Application, the Qualified Bidder has not entered into any agreement with any other Qualified Bidder regarding participation in the auction for which it is applying.  If a Qualified Bidder is unable to make this certification, the Qualified Bidder will not be able to participate in the auction. 

Other certifications of the Part 2 Application allow the Qualified Bidder to make an information disclosure to explain why it is unable to make a certain certification.  For example, a Qualified Bidder that is unable to certify that it is not associated with any other Qualified Bidder will be asked to identify the Qualified Bidder(s) with which it is associated, and will be asked to describe the nature of the association.  If a Qualified Bidder makes such a disclosure because it cannot make one of the certifications in the Part 2 Application, this disclosure will be considered when the Part 2 Application is processed.  The Auction Manager may require additional information and will decide on a course of action on a case-by-case basis to preserve the competitiveness and integrity of the auction.  This course of action could include allowing the Qualified Bidder to complete the Part 2 Application successfully without additional undertakings, could include requiring additional undertakings as a condition for the successful completion of the Part 2 Application and for participation in the auction, and could include rejection of the Part 2 Application.

Yes.  The BGS-RSCP and BGS-CIEP Auctions are separate in all important respects.  The evaluation of the Association and Confidential Information Rules pertains to each auction separately.  A bidder in the BGS-RSCP Auction is asked in its Part 1 and Part 2 Applications to make a number of certifications found in the BGS-RSCP Auction Rules.  In these rules, a “bidder” means a bidder in the BGS-RSCP Auction.  Most of these certifications are made in Insert #P2-1 required by the Part 2 Application, where it is stated: "In these certifications, a “Qualified Bidder” refers to an entity qualified to participate in the BGS-RSCP Auction."  Similarly, a bidder in the BGS-CIEP Auction is asked in its Part 1 and Part 2 Applications to make a number of certifications found in the BGS-CIEP Auction Rules.  In these rules, a “bidder” means a bidder in the BGS-CIEP Auction.  Most of these certifications are made in Insert #P2-3 required by the Part 2 Application, where it is stated: "In these certifications, a “Qualified Bidder” refers to an entity qualified to participate in the BGS-CIEP Auction.”

The objectives of the Association and Confidential Information Rules of preventing collusive arrangements and of preventing any one bidder from gaining superior information regarding its competitors mean that these rules do imply some restrictions on the day-to-day market activities of bidders and on possible supply arrangements. 

For example, if one bidder (Bidder A) transacts with another bidder (Bidder B) and in the process Bidder A learns Bidder B’s valuation for the auction product, then Bidder A would have gained superior information about a competitor, and this transaction could foster collusion (see, for instance, FAQ-35 and FAQ-36).  The fact that the Association and Confidential Information Rules aim to prevent a bidder from gaining superior information about its competitors that might affect the Auction Process implies that Bidder A cannot sell a full-requirements product to Bidder B.  Such a supply arrangement would provide Bidder A with reliable information regarding Bidder B’s valuation of the auction product.  This is an example of a restriction on supply arrangements implied by the Association and Confidential Information Rules.  As another example, each bidder is asked to certify that it has not entered into a supply arrangement that would provide explicit instructions on how to bid (see certification 5 of the Association and Confidential Information Rules portion of the Auction Rules, section VI.E.4 in the BGS-CIEP Auction Rules and section VII.E.4 in the BGS-RSCP Auction Rules).  This is a restriction on supply arrangements that aims to prevent coordination of bidding of several bidders if these bidders all entered into supply arrangements that provided bidding instructions. 

The Association and Confidential Information Rules attempt to place only necessary restrictions on supply arrangements and on day-to-day market activities.  Such restrictions are unavoidable if these rules are to meet their goals.  These rules may impact hedging activities and supply arrangements of bidders.  Each bidder should be aware of these rules at all times, should be aware of the entities that have become Qualified Bidders for the auction in which it is participating, and should be especially mindful of these rules from the start of the auction until the Board renders a decision on the auction results.  For additional information, see, for instance, FAQ-39, FAQ-40, and FAQ-41, as well as other questions and answers in the “Transactions and Hedging” section of this document.

The Association and Confidential Information Rules do not “permit” or “prohibit” any specific transaction.  Rather, these rules focus on employing a system of certifications to ensure that competition in the auction is not compromised either because bidders are not bidding independently, or because a bidder gains superior information about its competitors that might affect the Auction Process.  If a bidder is unable to make a certification, typically the bidder will make an information disclosure and the Auction Manager may ask for more information to decide, on a case-by-case basis, upon a remedy that will ensure that competitiveness at the auction is not jeopardized (see, for instance, FAQ-23).  A list of permitted or prohibited transactions is not feasible or practicable: a given transaction may in one context allow the bidder to make all the certifications in the Association and Confidential Information Rules, while the same bidder may be unable to make one or more certifications with respect to the same type of transaction in another context.  The bidder must make this determination considering the full context in which the transaction is made.

Yes.  If a bidder is party to a bidding agreement with another party, is part of a bidding consortium or joint venture for the purpose of bidding in the auction, or is party to any arrangement involving joint or coordinated bidding with another party, then the bidder is not bidding independently.  Any such agreement and arrangement must be disclosed in the Part 1 Application. 

Furthermore, the Association and Confidential Information Rules included in the BGS-RSCP Auction Rules (section VII.E.) and the BGS-CIEP Auction Rules (section VI.E.) provide specific criteria for one bidder to be associated with another bidder.  Such associations are links among bidders that may impede their ability to act independently.  Bidders are entirely responsible for reviewing these criteria and for evaluating their ability to make certifications in this regard.  Any such associations must be declared in the Part 2 Application.  

The intent of the Association and Confidential Information portion of the Auction Rules is to promote the competitiveness of the auction, to uphold the integrity of the Auction Process, to prohibit collusive arrangements, and to ensure that no bidder gains superior information regarding its competitors that might affect the Auction Process.  A bidder shows compliance with these rules by making a number of certifications in the Part 1 Application and the Part 2 Application.  If a bidder is able to make all the certifications, the bidder complies with the Association and Confidential Information Rules.  The certifications ensure that the bidder is not part of a collusive arrangement, the bidder does not gain superior information regarding its competitors that might affect the Auction Process, and the bidder is not providing to others information related to the auction or its bidding strategy. 

Yes.

The Auction Manager provided contact information for each of the four EDCs in the Acceptable Modifications documents posted to the contract & credit page of the “bidder info” tab on the BGS Auction website. This contact information is to be used for informational purposes only as a modification to the Pre-Auction Letters of Credit. A hardcopy of the Pre-Auction Letter of Credit is not to be issued.

The Pre-Auction Letter of Credit must be provided with the Part 2 Application due on January 10, 2024.

Questions and responses are integrated into the Frequently Asked Questions (“FAQ”) section of the BGS Auction website on a rolling basis, meaning that questions will be responded to and posted as new questions are received, and at least on a weekly basis. FAQs will continue to be updated at least weekly until bidders are notified that they are registered to participate in the Auctions. FAQs will then be answered and blind carbon copied daily (or as often as questions are received and answered) to registered bidders and representatives from the Board Advisor only.

The presentation slides and accompanying audio for the first and second bidder information webcasts get posted to the webcast materials page of the “bidder info” tab on the BGS Auction website typically within a day of the event.

No. There is no sealed bid round at the end of an auction. Once an EDC is oversubscribed in an auction, the target will always be filled for the remainder of the auction. In order to fill the target, offers are taken in price order. This means that in a given round, the bids will be stacked to fill the target as follows:

1) First, all tranches bid at the going price are taken;

2) Second, tranches withdrawn are retained to fill the target from lowest to highest exit price. The exit price is the last and best offer for the tranche. The exit price must be greater than the going price for the round and less than or equal to the prior round price; and

3) Last, if all withdrawals are retained and the target is still not met, switches from the EDC will be denied at the previous round’s going price, which the price at which they were last freely bid.

Bidders receive information about their own retained exits and denied switches in the round report each round.

Thank you for bringing this to our attention. The “JCP&L Historical Hourly Load by Class Jun20-May23” file has been updated and is available on the additional data page of the BGS Auction site.

The BGS Auction Manager has made available redlines between the Final 2023 BGS-CIEP and BGS-RSCP SMAs and the SMAs filed as part of the EDCs’ Proposal for the provision of Basic Generation Service for the period beginning June 1, 2024. The redlines are available on the Contract and Credit page of the “bidder info” tab of the BGS Auction website.

As stated in section VI.D. of the BGS-CIEP Rules and section VII.D. of the BGS-RSCP Rules, each winner and each EDC will have three days from the time at which the Board approves the Auction results to execute the applicable agreement. Each winner will have these three days to demonstrate compliance with the creditworthiness requirements set forth in the applicable agreement. Please review the BGS-CIEP Rules and BGS-RSCP Rules for further information.

The documents and FAQs of the BGS Auction website are refreshed every year to include only content relevant for the upcoming BGS Auctions. The FAQ Archive page is for FAQs posted since the refresh of the BGS Auction website but that are no longer relevant at the present time. FAQs from prior BGS Auctions are no longer available.

The data in the BGS Data Room is reported in Eastern Prevailing Time (“EPT”).

A BGS-CIEP Supplier provides full-requirements service for the percentage of the EDC’s BGS-CIEP Load corresponding to the number of tranches won. A BGS-CIEP Supplier receives the price determined at the Auction applied to the supplier’s share of the BGS-CIEP capacity obligation. A BGS-CIEP Supplier also receives the following payments: (i) a fixed ancillary service payment rate applied to the supplier’s share of BGS-CIEP Load (energy); (ii) the “Hourly Real-Time Spot Price”, which refers to the PJM load-weighted average Residual Metered Load aggregate Real-Time Locational Marginal Price for the zone, applied to the supplier’s share of BGS-CIEP Load (energy); and (iii) the CIEP Standby Fee.

With respect to the rates paid by BGS-CIEP customers, the transmission rate is based on either a demand charge or transmission obligation charge, depending on the EDC. The energy rate is the Hourly Real-Time Spot Price, which will be adjusted each hour by the relevant EDC loss expansion factor. The ancillary service rate will be a pre-determined value based on the ancillary service payment rate to suppliers adjusted for losses. The price for an EDC is the final Auction price for that EDC and will be assessed as a specific capacity obligation charge, demand charge, or energy charge.

Each tranche represents a set percentage of BGS (BGS-RSCP or BGS-CIEP) Load for the EDC. The tranches are neither specific to a set of customers or to a subzone. BGS suppliers are not paired with individual customers.

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