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March 18, 2011
Brattle Economists Report Successful Procurement of Nearly 20,000 Solar Photovoltaic Alternative Energy Credits for Pennsylvania Power Company

The Pennsylvania Power Company has successfully contracted for 19,800 Solar Photovoltaic Alternative Energy Credits (SPAECs). Economists at The Brattle Group acted as the independent manager of the procurement. The procurement is part of Pennsylvania Power Company’s plan to purchase SPAECs to meet the state’s Alternative Energy Portfolio Standards through 2020. This purchase of SPAECs is equivalent to approximately 2,200 megawatt-hours of solar power generation annually over the next nine years, representing enough energy to power more than 300 homes. The average cost is $199.09 per SPAEC, with deliveries scheduled to begin in June 2011 and continue through May 2020. The results of the procurement were approved by the Pennsylvania Public Utility Commission on March 11. “We are pleased with both the high level of interest in this procurement and the resulting prices, which were below those obtained in prior long-term SPAEC procurements in Pennsylvania within the past year,” said James Reitzes, a principal of The Brattle Group and lead procurement manager. Reitzes cited a well designed product requirement and procurement process, as well as the declining costs of constructing solar generation facilities, as potential contributing factors to the lower prices obtained from this procurement. Economists at The Brattle Group were responsible for managing and evaluating the entire solicitation process, including the review of qualifying applications and bid documents, the handling of bidder inquiries, the conduct of bidder information sessions, and the preparation of a report for the Pennsylvania Public Utility Commission that described the procurement process and provided an assessment of the state of the SPAEC market.