WGL POR Delayed Until March 1, 2011 at the Earliest

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January 20, 2011

Purchase of Receivables at Washington Gas Light in Maryland will be delayed until March 1, 2011 at the earliest, after the Maryland PSC took WGL's compliance filing under advisement.

As only reported in Matters (12/22), one of the outstanding issues regarding WGL's POR program is the appropriate time period for amortization.  Pro forma discount rates based on two, three or five year amortization are available in our 12/22 story.

WGL had been seeking a February 1, 2011 start for POR, and needed a prompt decision to allow final testing prior to implementation.

Commissioners expressed a need for additional time to review WGL's costs to be recovered in the POR discount rate, particularly regarding the process through which IT costs were derived.

Competitive suppliers did not file any comments, adverse or supporting, regarding WGL's most recent compliance filing.  Commissioner Susanne Brogan asked Staff if that should cause any concern, given suppliers' more active involvement in other POR proceedings before the PSC.

However, it should be noted that the WGL program is unique in that it was essentially negotiated with suppliers before being filed.  Originally, to comply with COMAR 20.59, WGL elected to pro-rate partial payments between supply and distribution costs, rather than use POR.  At the request of suppliers, WGL entered negotiations to develop a POR program acceptable to all parties, ultimately resulting in a POR filing in December 2009 (12/8/09).  Accordingly, unlike with the other utilities, the negotiated nature of the WGL POR program left little room for suppliers to seek any modifications through the PSC proceedings, and thus little need for active intervention.

Also outstanding, on a separate track from WGL's compliance filing, is WGL's rehearing request regarding its ability to reconcile bad debt costs under POR.  Originally, bad debt was excluded from WGL's POR reconciliation factor because any under-recovery of bad debt costs was to be addressed in a risk factor.  However, the PSC rejected the proposed risk factor, prompting WGL to seek rehearing to ensure bad debt costs may be reconciled in the reconciliation component, similar to other POR programs approved by the PSC.

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