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PSC Issues Order On Proposed Change In POR Discount Methodology, Meant To Address 15% Discount Rate
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The residential purchase of receivables discount at Washington Gas Light in the District of Columbia will not be 15% -- the discount that would have resulted under the standard calculation to update the POR discount rate -- as the D.C. PSC has instead approved WGL's proposed use of an alternative input in the discount rate calculations
While not as excessive as the 15% discount, as discussed further below, the new WGL residential POR discount will still be relatively high at 7.718%. The current residential discount is 6.897%.
As first reported by EnergyChoiceMatters.com, the standard operation of WGL's POR discount calculation would have resulted in a new residential discount rate of over 15%
In filing its annual update to the POR discounts, WGL departed from the standard process and instead used 2022 levels for bad debt and late fees as a proxy for current ongoing costs, rather than relying on 2023 data. WGL said that using 2022 data provides a more reasonable estimate of going forward costs for these items, due to the resumption of disconnections following a moratorium
As a result of using 2022 levels for bad debt and late fees, WGL's new residential POR discount is 7.718%, instead of a rate of over 15% that would have resulted from using 2023 data
The PSC has now approved WGL's alternative calculation and the new 7.718% residential POR discount rate
For non-residential accounts, the PSC approved WGL's proposal to set the non-residential POR discount at 0.478%, down from the current 0.809%
The new POR discounts are effective upon publication of a notice of final tariff in the D.C. Register
WGPOR-2024-01
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July 29, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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