Energy Auction

Phase I Energy Auction Information

On Oct. 17, 2008, Southern Company filed with the Federal Energy Regulatory Commission (FERC) amendments to its Market-Based Rate Tariff to incorporate a must-offer, bid-based energy auction. The proposal includes simultaneous day-ahead energy auctions for firm-LD energy and recallable energy, along with an hour-ahead energy auction for non-firm energy.

The purpose of the energy auction is to resolve perceptions that Southern Company could exercise horizontal market power through the physical or economic withholding of generation. The energy auction will supplement existing bi-lateral markets. The proposal was conditionally accepted by FERC on Dec. 18, 2008, and Southern Company filed their Compliance Filing accepting all conditions on Jan. 21, 2009. This Compliance Filing was accepted by FERC on March 25, 2009. The implementation of the energy auction will begin on April 23, 2009. The governing terms and conditions are set forth in Southern Company's Market-Based Rate Tariff, which is on file with FERC and accessible at www.ferc.gov.

Participation in the auction is open to any entity that is qualified to transact with Southern Company pursuant to their Market-Based Rate Tariff. All prospective bidders must be in good standing with Southern Company credit requirements consistent with the master power purchase/sale agreement between buyer and seller. An executed Participation Agreement is also required.

Day-Ahead Energy Auctions

There will be two simultaneous day-ahead energy auctions – one for firm-LD energy and one for recallable energy. Both involve 50-megawatt blocks of energy for delivery "into Southern" during the 16-hour period from 6 a.m. to 10 p.m. The primary difference between these day-ahead products is the right of Southern Company to curtail recallable energy in the event of a supply-side disruption. The bid period for these two auctions will open at 12:00 p.m., two days prior to delivery and will close at 6:30 a.m., one day prior to the delivery day. All winning bidders will pay the same market clearing price, expressed as an implied heat rate to be applied to the Henry Hub midpoint price published by Platts Megawatt Daily. These auctions will be run for each business day, Monday through Friday, excluding NERC holidays. All transmission-related arrangements and costs, including tagging, are the responsibility of the winning bidders.

Hour-Ahead Energy Auction

There will be an hour-ahead energy auction each hour of the day, 24 hours a day, seven days a week, including NERC holidays. This auction will be for one-megawatt increments of non-firm energy for delivery "into Southern" in the upcoming hour. The bid period will open at 60 minutes prior to the delivery hour and will close at 45 minutes prior to the delivery hour. Winning bidders will all pay the same market clearing price ($/MWh), and each is responsible for the transmission-related arrangements and costs, including tagging, associated with its transaction.

More Information

For general questions regarding the Southern Company Energy Auction, please see Frequently Asked Questions.

For detailed information regarding the rules and regulatory framework of the Southern Company Energy Auction, please see Auction Rules and Compliance.

For information regarding participating in the bid-based energy auction, please see Auction Registration Process.

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