Source: Grid Shopper — https://gridshopper.com/blog/duke-procurement-auction


import ExplainerBox from '../../components/ExplainerBox.astro';
import AuctionEmbed from '../../components/embeds/AuctionEmbed.astro';
import OffersEmbed from '../../components/embeds/OffersEmbed.astro';

*Also: Cincinnati municipal aggregation rate increasing by 49% in May 2025*

<ExplainerBox title="What You Need to Know">
  - **What happened:** Duke Ohio awarded bids for the last 50% of their energy supply needs for the June 2025 - May 2026 service period on April 15th
  - **What's next:** The auction results are used to determine the "price to compare" for Duke Ohio customers
  - **Bottom line:** Duke's rate filings with the Public Utilities Commission of Ohio suggest a 30% rate increase starting June 1st
  - **Estimated new rate:** 10.45¢/kWh (up from current 8.02¢/kWh)*
  - **Cincinnati aggregation customers:** Rate increasing from 7.19¢/kWh to 10.73¢/kWh
  - **Why:** PJM capacity auction results are driving up costs across the region

  *\* Our initial forecast, based on the auction results, was ~10¢/kWh. We have revised this estimate based on Duke's official rate filing with the PUCO. Final rates can still vary slightly due to final adjustments.*
</ExplainerBox>

Duke Energy Ohio recently announced the results of the second of two auctions they held to purchase energy for the June 2025 - May 2026 service period. Results from the two auctions will lead to a 30% rate increase starting June 1st, largely due to an increase, region-wide, in the cost of [PJM capacity](/blog/pjm-capacity-auction).

In related news, Dynegy, the supplier for the city of Cincinnati's municipal aggregation program, [announced a 49% rate increase](https://www.dynegy.com/municipal-aggregation/communities-we-serve/ohio/cincinnati) for aggregation customers set to go into effect in May. The new aggregation rate will be 10.73¢/kWh, up from the current 7.19¢/kWh.

If you are interested in exploring your supplier options, we track supplier offers, customer shopping statistics, and utility auction progress on our [Duke Ohio data page](/oh/deok). You can also find this information for the other Ohio utilities on the [Ohio page](/oh).

## How the Duke Ohio "Price to Compare" is Determined

#### Default Service Procurement Explained

All Ohio electric utilities, Duke included, purchase supply for their customers through a "Competitive Bidding Process". Duke holds auctions twice per year where they invite energy companies to bid on providing service to customers who have not chosen an alternative supplier and those that do not participate in municipal aggregation programs. The auction is monitored by independent consultants to ensure fairness, and the results must be approved by the Public Utilities Commission of Ohio. Once the auction is concluded, the results are used to determine the "price to compare", the energy supply portion of your bill if you have not chosen an alternative supplier. By Ohio law, Duke passes through this cost without any additional markup.

Your monthly Duke electric bill splits into two parts: delivery charges (regulated by the Public Utilities Commission of Ohio) and supply charges. For supply, you have options - stick with Duke's "[price to compare](https://energychoice.ohio.gov/ApplesToApplesComparision.aspx?Category=Electric&TerritoryId=4&RateCode=1)", join a municipal aggregation program, or choose from competitive suppliers in the market.

Duke's approach to securing energy supply is designed with customer stability as the priority. Instead of buying supply all at once, Duke spreads purchases across multiple auctions throughout the year, leveraging the bulk purchasing power of its entire customer base to negotiate competitive pricing. This strategy typically helps insulate customers from market volatility, but when fundamental costs like capacity prices rise dramatically across the region, some degree of rate increase becomes unavoidable despite their best efforts.

## Auction Results Explained

Here are the latest auction results for June 2025 - May 2026 compared to previous auctions. The significant increase in the auction clearing price was caused by the [PJM capacity auction results](/blog/pjm-capacity-auction), which are driving up costs across the region.

| Auction Date | Service Period | % for the Period | Price |
| --- | --- | ---: | ---: |
| April 2025 | June 2025 - May 2026 | 50% | 8.604¢/kWh |
| March 2025 | June 2025 - May 2026 | 50% | 9.317¢/kWh |
| February 2024 | June 2024 - May 2025 | 30% | 6.339¢/kWh |
| September 2023 | June 2024 - May 2025 | 35% | 7.508¢/kWh |

The chart below shows the results of the Duke auctions going back to 2022. The stacked bars represent different auctions and show how those auction prices contribute to the total weighted average price for each service period (the blue line). The dotted red line shows Duke's price to compare history. You can see the supply has now been 100% purchased for the June 2025 - May 2026 service period based on the height of the bars.

Note about units: The chart below shows prices in $/MWh. For reference, $10/MWh = 1¢/kWh.

<AuctionEmbed utility="oh/deok" />

The chart above shows Duke's procurement schedule and weighted average prices across multiple auctions.

## What Makes Up the Duke "Price to Compare"

The volume-weighted average auction results, 8.961¢/kWh, will account for most of the supply portion of Duke's "price to compare", but there are a couple of other components that get added to determine the final rate:

#### Renewable Energy

Duke adds the cost of complying with Ohio's Renewable Energy requirements, which involves purchasing generation credits from renewable power generators.

#### Adjustments for distribution losses

Accounting for electricity lost as heat during transmission.

#### Revenue True-Up

By law, Duke has to balance the amount it collects from customers with the amount it pays to energy suppliers. On occasion, adjustments to the price to compare will be made to bring the totals into balance.

#### State taxes

Various state-level taxes applied to electricity supply.

When we include these additional cost components based on Duke's official filing, the new rate will be 10.45¢/kWh. Duke will announce the final official rate closer to June 1st when the new service period begins.

## The PJM Capacity Auction Impact

We published a detailed analysis about the recent [PJM capacity auction results](/blog/pjm-capacity-auction), which resulted in effective capacity prices ~4.5x higher for Duke customers than previous auctions.

The whole country, and especially the mid-Atlantic region, is facing new challenges in securing enough electricity supply. At the same time that many of our older power plants are reaching the end of their useful life, the demand for electricity is skyrocketing, thanks mostly to the electricity needs of artificial intelligence, cloud computing, and industrial electrification. The market is responding to this new demand with efforts to build new power plants, but the time it takes to get them online has not kept up with the demand. This supply and demand imbalance is driving up capacity prices across the region.

Check out the capacity write-up linked above if you're interested in taking a deeper dive. The key takeaway is that the capacity costs increases are likely here to stay for a few years, and are impacting customers across the entire mid-Atlantic region.

## What This Means for You

### For Duke Ohio Default Service Customers

- **Rate Increase:** Expect your electricity supply rate to increase about 30% beginning June 1st, 2025
- **Bill Impact:** For the average household using 800 kWh monthly, this translates to approximately $20 more per month in supply charges
- **Future Outlook:** The higher rates are likely to stick around for at least a few years

### For Cincinnati Municipal Aggregation Customers

- **Rate Increase:** Your rate increase is already locked in: 49% starting in May
- **Bill Impact:** For the average household using 800 kWh monthly, this translates to approximately $28 more per month in supply charges
- **Other Municipalities:** All aggregation customers in Ohio will face rate increases, though the timing and magnitude of the increases may vary by municipality

### For Electricity Shoppers

- Depending on future market conditions, customers might save money by shopping around for alternative suppliers
- You can track supplier offers on our [Duke Ohio page](/oh/deok), where we store and present data from the official [Ohio Public Utilities Commission electricity rate board](https://www.energychoice.ohio.gov/ApplesToApplesComparision.aspx?Category=Electric&TerritoryId=4&RateCode=1).

The chart below is an example of the type of data you can find on our [Duke Ohio page](/oh/deok). It shows current supplier offers for Duke customers, arranged by contract length and price. The dotted green line represents the current Duke price to compare.

You can find more information about the current supplier offers on the Ohio "Apples to Apples" page, managed by the Public Utilities Commission, here: [Ohio Public Utilities Commission electricity rate board](https://energychoice.ohio.gov/ApplesToApplesComparision.aspx?Category=Electric&TerritoryId=4&RateCode=1). The PUCO also provides [helpful information](https://www.energychoice.ohio.gov/Pages/About%20Choice.aspx) about your supplier choices.

<OffersEmbed utility="oh/deok" />

## Key Takeaways

Here's what you should know about Duke's latest auction results:

- The Duke price to compare is set to increase by about 30% in June, to 10.45¢/kWh, pending the final announcement of the official rate
- The 49% increase in the Cincinnati Municipal Aggregation rate is already locked in, with a May 2025 start date
- The large increase in PJM capacity costs is mostly to blame for the higher rates
- Depending on future market conditions, you might be able to save money by shopping around for alternative suppliers

*Note: The estimated bill impacts are general approximations. Your actual bill impact may vary based on your specific rate plan and electricity usage patterns.*