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Md. PSC Suspends BGE POR Tariff Revisions Related to Sales Tax
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December
16, 2010
As first reported in our live blog yesterday, the Maryland PSC has suspended Baltimore Gas & Electric's electric purchase of receivables tariff revisions relating to sales tax, and directed the supplier coordination working group to address the issues (12/14).
Responding to a memo from Staff, BGE said that neither BGE nor the supplier is eligible for a sales tax rebate for uncollectible amounts related to supplier billings (Staff suggested either party may be eligible), because under POR there is no uncollectible amount to the supplier.
BGE is not eligible for the rebate since it is not considered the "vendor" for tax purposes, and thus there is no opportunity for BGE to profit under its tariff, answering a Staff concern.
Aside from the tax rebate issue, Staff was also hesitant to codify BGE's current practice in the tariff because the Commission has never discussed whether the POR discount rate should apply to the portion of receivables paid by customers to cover the sales tax. BGE argued that receivables are appropriately treated as a bundled sum and not individual components (e.g. commodity cost, tax cost, etc.) since the discount rate reflects BGE's costs to pursue collections and bear uncollectibles.
However, Commissioner Susanne Brogan noted that such policy was not explicitly addressed by the Commission in establishing POR, and noted that the discount rate could alternatively apply to only the commodity portion of the suppliers' receivables, with no discount on the sales tax remitted by the customer through BGE to the supplier.
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