|
|
|
|
|
PSC Orders Utility To File Alternative To Both 15% & Updated 5% POR Discount Rate
The following story is brought free of charge to readers by VertexOne, the exclusive EDI provider of EnergyChoiceMatters.com
Concerned about the potential "anti-competitive" impacts from two proposals from Pepco-DC to set the residential purchase of receivables discount rate, the District of Columbia PSC has ordered Pepco to further change the inputs used in the residential POR discount, with the goal of ensuring that retail suppliers may still be competitive under the revised POR discount rate
As first reported by EnergyChoiceMatters.com, Pepco-DC's standard POR update calculation had resulted in a residential POR discount rate of 14.8693%
Pepco later proposed an alternative proposal with a residential POR discount of 5.4197%. The mechanics of the alternative proposal are fully discussed in our prior story here, but, in brief, the alternative would have amortized 2023 uncollectibles over two years
However, the PSC rejected both of these proposed POR discounts for residential customers at Pepco
Even the alternative 5.4197% discount rate filed by Pepco, "may have a chilling effect on electricity supplier competition in the District," the PSC said
The PSC said that Pepco's alternative proposal would only delay, to the future, impacts to the POR discount from current bad debt trends that, "are outside the norm[.]"
The PSC directed Pepco to use the approach recently adopted at Washington Gas Light (story here), where the PSC accepted the use of 2022 bad debt expenses and late fees in setting the annual update to the residential POR discount rate
The PSC ordered Pepco to file a new residential POR discount reflecting the use of residential calendar year 2022 bad debt expenses and late fee revenues in the calculation in place of the standard data used for such components
It is unknown what discount rate will result from the PSC's direction. Pepco is to file the new residential POR discount within 10 days
While the PSC directed the use of the alternative methodology recently approved at WGL, the alternative at WGL still resulted in a residential POR discount of over 7.7%
Given that the PSC has expressed concerns with a 5.4% residential discount under Pepco's previously filed alternative, the PSC may have an expectation that its newly ordered alternative for Pepco will produce a sub-5.4% POR discount for residential customers
The PSC said that, "The purpose of the POR program is to encourage electricity competition in the District by encouraging Suppliers to participate in the electricity market."
"[W]e are concerned that Pepco’s POR proposals could have unintended anti-competitive consequences," the PSC said
"The Commission is concerned that a high POR Discount Rate could make it impossible for suppliers to make competitive offers to residential customers in the future," the PSC said
PEPPOR-2024-01
ADVERTISEMENT ADVERTISEMENT Copyright 2024 EnergyChoiceMatters.com. Unauthorized copying, retransmission, or republication
prohibited. You are not permitted to copy any work or text of EnergyChoiceMatters.com without the separate and express written consent of EnergyChoiceMatters.com
PSC Concerned These Filed POR Discounts Could Make It "Impossible" For Retail Suppliers To Compete
Goal Of POR Is To Encourage Competition, PSC Says
August 7, 2024
Email This Story
Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
NEW Jobs on RetailEnergyJobs.com:
• NEW! -- Director, Load Forecasting
-- Retail Supplier
• NEW! -- Wholesale Markets Analyst -- Retail Supplier
• NEW! -- Origination Analyst
-- Retail Supplier
• NEW! -- Settlements Analyst
-- Retail Supplier
• NEW! -- Billing Supervisor
|
|
|
|
|