Multiple Utilities Support Eliminating Purchase Of Receivables

November 7, 2023

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Copyright 2010-23 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Baltimore Gas and Electric Company ('BGE'), Potomac Electric Power Company ('Pepco'), and Delmarva Power & Light Company ('Delmarva Power') (collectively the 'Joint Exelon Utilities') told the Maryland PSC that they, "agree that POR [purchase of receivables] should be eliminated and recommend that the payment posting priority structure in place prior to the implementation of POR be applied."

The Joint Exelon Utilities were responding to a previously reported petition from the Maryland Energy Advocates Coalition (MEAC) to eliminate the purchase of receivables program at the electric and gas utilities in the state

See our prior story for background on the MEAC petition

"The Joint Exelon Utilities agree that POR has served the purpose of aiding in the creation of a robust energy marketplace in Maryland and therefore support the elimination of POR. The POR mechanism removes natural incentives, that retail suppliers would otherwise have, to follow prudent credit practices in obtaining customers. Eliminating POR provides the appropriate signals to suppliers to operate under good business practices. As a robust marketplace exists in Maryland for retail energy suppliers, there is no longer a need for POR to provide market-wide risk mitigation to the retail supplier community," the Joint Exelon Utilities said

With the elimination of POR, the Joint Exelon Utilities said, "if suppliers do not elect to use SCB [supplier consolidated billing], under the utility consolidated billing option the utility would continue to serve as a billing agent for energy suppliers. In this capacity, the utility would receive payments from retail customers and these payments would be remitted to the supplier. Any arrearages would remain with the supplier until the customer is transferred back to the utility, at which point future arrearages would vest 100% with the utility."

In contrast, The Potomac Edison Company and Washington Gas Light Company said in joint comments that, "At this time, The Potomac Edison Company ('Potomac Edison' or 'PE') and Washington Gas Light Company ('Washington Gas' or 'WGL') both oppose MEAC’s Petition to eliminate POR. For 11 years POR has been deeply rooted in configurations within the Maryland utilities’ billing systems, and eliminating POR will not be as easy as 'flipping a switch'. Rather, eliminating POR would require significant work to design, test, and then implement IT system and internal procedure changes. Those changes likely would require the utilities to expend a vast amount of labor and technological resources, the costs of which will be borne by ratepayers ... Thus, Potomac Edison and Washington Gas do not see the proposed change as helping customers; rather, it will impose new costs on them."

For coverage of more comments in response to the MEAC petition, including a host of proposed retail market reforms from PSC Staff, see our story from earlier today here

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