N.Y. PSC Approves Changes to NiMo POR Described As Inconsistent with "Without Recourse" Design

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January 25, 2011

The New York PSC will allow Niagara Mohawk, for electric service, to recalculate on a monthly basis the commodity cost component of the merchant function charge and the Purchase Of Receivables discount, using monthly commodity-related uncollectible pricing data (10-E-0050).  

Additionally, the Commission, reversing a recommended decision (see 11/18), will allow annual true-ups of the Merchant Function Charge and the POR discount rate.

Both the monthly changes and annual true-up to the POR discount rate were opposed by ESCOs, who had argued that the changes are inconsistent with a "without recourse" POR program.

The Commission also denied ESCOs' petition to eliminate the all-in/all-out requirement (by service group) in NiMo's POR program.  

"We do not believe that the greater flexibility that RESA/SCMC seek for ESCOs to use the purchase of receivables program is essential for them to operate, nor are we persuaded that the current approach presents any real or serious barriers to the provision of product options for customers," the PSC ruled.

The PSC affirmed that an updated study which allocates uncollectibles among electric and gas service shall be applied in setting electric rates, even though NiMo's most recent gas rate case used an older study in allocating uncollectibles to gas rates.  The Commission's findings result in a lower uncollectibles rate than what NiMo was originally seeking.

As part of its order, the PSC adopted a stipulation among several parties which defers NiMo's proposed changes in the design of commodity rates for 2012 (see 2/1 story) until a separate proceeding after the rate case.  Changes to the pricing of capacity, including the use of capacity tags for hourly priced customers, are also to be deferred to a later proceeding.

NiMo is to file proposed modifications to its commodity rate mechanisms within 45 days.

The approved stipulation also reduces the threshold for mandatory hourly pricing from a demand of 500 kW to a demand of 250 kW (Matters, 7/15).


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