Dive Brief:

• Ohio regulators last week accepted the results of Dayton Power & Light Co.'s wholesale auction results, with competitive supplier bids on one-, two- and three-year supply contracts clearing at prices from $48.65/MWh to $51.45/MWh.
• Last month the Public Utilities Commission of Ohio accepted auction results submitted by Duke Energy for a one-year supply contract at a clearing price of $50.71/MWh.
• Auction results will be blended with future auctions to establish a price for utility customers to compare with competitive options, which they can choose to take. The results come as Ohio utilities have been announcing retirements of older coal-fired plants that are being pressured by cheap natural gas.

Dive Insight:

Winning bidders will remain confidential for three weeks, so it's not yet possible to know which generators won the right to supply capacity in DP&L's auction. But Platts reports the winners in Duke's auction included American Electric Power Service Corp., Exelon Generation and AEP Energy Partners, among others.

For DP&L, its one-year product resulted cleared at an average price of $51.45/MWh, for delivery period June 1, 2017 to May 31, 2018. The two- and three-year products beginning the same date cleared at $50.91/MWh and $48.65MWh, respectively.

Duke held a 16-round auction in March, in which a half dozen competitive suppliers submitted winning bids, resulting in an average clearing price of $50.71/MWh.

Clearing prices in Ohio power auctions have remained relatively steady over the past few years, despite a shift away from older coal-fired generation and the influx of new natural gas plants in the Ohio market.

In October 2013, DP&L's first competitive power auction cleared at an average of $49.32/MWh for contracts to serve 10% of its service area. Average prices rose above $60/MWh in a 2014 auction, but then settled back near $51/MWh in 2015.

The results come as low natural gas prices and stagnant load growth sow fears of depressed prices in the nation's wholesale power markets. Last month, Moody's analysts warned that continuing coal retirements and a gas plant buildout could distress prices in the PJM market.

Last month, DP&L announced plans to close its J.M. Stuart and Killen coal-fired plants in southern Ohio, which combined for about 3,000 MW of capacity. According to the utility, the plants are no longer economically viable.

Ohio has been dealing with how to handle retiring baseload generation for more than a year. In 2016, the Federal Energy Regulatory Commission blocked power purchase agreements approved by state regulators that aimed to support aging coal and nuclear plants owned by FirstEnergy and AEP Ohio. A settlement was reached last year on plant retirements for American Electric Power that included job revitalization efforts.