|
Consulting |
Search |
ICC Clarifies POR Order, Combines Class Uncollectibles into Single Discount Rate
Email This Story
February 25, 2011
The Illinois Commerce Commission has clarified its amendatory order on Commonwealth Edison's Purchase of Receivables program, confirming that administrative costs will not be recovered twice, and affirming that a single discount rate shall be applied to all customer classes (Docket 10-0138).
The order on clarification first eliminates language in the amendatory order (2/11) that suggested that a 0.44% discount factor for administrative costs would be charged, either in addition to or in place of the 50¢ fee per utility consolidated bill. The order on clarification confirms that administrative costs will only be collected through the 50¢ charge per utility consolidated bill.
The order on clarification further confirms that a single uncollectibles discount rate shall be applied to all purchased receivables, regardless of customer class, departing from the class-specific uncollectible factors adopted in the original December order.
"It is also in the best interests of Illinoisans in ComEd’s service territory if there were one single charge for uncollectibles, as opposed to one uncollectible charge for residential customers and a different uncollectible charge for commercial customers. ComEd shall amend its tariffs to reflect this charge, which is 1.8453%," the order on clarification states. The 1.8453% figure represents the weighted average of ComEd's residential uncollectibles and the uncollectibles for its small commercial customers (e.g. those commercial customers eligible for POR).
Previously, the ICC had established the POR uncollectibles rate as equal to the supply-related uncollectibles rate charged to default service customers under Rider UF. Under the current rider, this resulted in an uncollectibles discount of 2.239% for residential customers, and 0.774% for non-residential customers. Notably, Rider UF is annually updated June 1 (with a tariff filing in May), and the December POR order merely tied the POR uncollectibles rate to the applicable current amount under Rider UF, and not a specific rate.
One wrinkle of the clarified amendatory order is that there does not appear to have been any consideration for a change in the POR uncollectibles rate of 1.8453% when the Rider UF amounts change. This could lead to a further divergence of the uncollectibles charged to default service customers versus those charged to suppliers participating in POR, aside from the initial divergence resulting form using a combined uncollectibles rate for POR, but class-specific rates for default service.
Aside from resulting in a higher discount rate for commercial customers and lower discount for residential customers, the use of a single discount rate for all rate classes means that uncollectibles costs are no longer strictly aligned between default service and competitive supply. While the uncollectibles reflected in retail suppliers' pricing to customers is ultimately at the retail supplier's discretion, under the original POR order, if the retail supplier simply elected to pass-through the POR uncollectibles discount to customers, it would have mirrored the uncollectibles charge paid by the customer had they remained on default service. Now, however, the POR discount factor is not the same as the uncollectibles rate the customer would have paid under default service, due to the combination of various class-specific rates into a single POR uncollectibles rate.
ComEd is required to file tariffs compliant within the amendatory order as clarified within five business days of the order's effective date.
Email This StoryCopyright 2010-
Be Seen By Energy Professionals in Retail and Wholesale Marketing
Run Ads with Energy Choice Matters
Call Paul Ring
954-
|
Consulting |
Search |