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Utility Files Higher POR Discount To Resolve Forecast Balances Under End Of POR
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Potomac Edison in Maryland has filed a proposed update to its residential purchase of receivables discount rate meant to resolve outstanding balances as a result of the POR program's termination for residential customers
Potomac Edison's proposal, filed on September 19, is the first such proposed adjustment to the POR discount occurring after the PSC clarified the Commission's prior pronouncement about a POR end date, and after a PSC Staff report on winding down residential POR
Specifically, as previously reported, the PSC has confirmed that, while it wishes to establish a "date certain" for the complete end to residential POR, it has not yet "definitively" established January 1, 2025 as the date certain end date for all residential POR.
SB 1 requires that POR cease effective January 1, 2025 for contracts entered into or renewed on or after January 1, 2025
However, the PSC has said that a "temporary allowance" regarding POR would be made for existing residential contracts, though the PSC has yet to establish the term for any such temporary allowance
Additionally, while only a recommendation for PSC consideration, PSC Staff has proposed that POR for existing residential customers continue until a post-POR form of utility consolidated billing can be implemented into the utilities' billing systems, with Staff suggesting a June 1, 2026 go-live date for such system changes and as the end date for the grandfathered residential POR
The PSC previously directed the utilities to propose discount rate updates in light of the residential POR wind down, but other utilities filed their proposals prior to the PSC's latest clarification and Staff proposal. As such, the other utilities' filings generally approached updates to the discount rates on the presumption that all residential POR would cease effective January 1, 2025, and sought to address balances that would not be able to be reconciled under the normal POR discount rate update process, given that the program would no longer be available.
Potomac Edison's filing uses the same approach of presuming a January 1, 2025 end date for residential POR, and forecasts remaining balances which must be recovered in light of such an end date (such as from receivables purchased prior to January 1, 2025 which later become uncollectible)
Potomac Edison proposes that, effective November 1, 2024, the residential POR discount should be increased to 4.5274% from the current 4.2722%
This proposal reflects a forecast of late payment revenues and uncollectible expense related to previously purchased receivables through May 2025
Potomac Edison also filed an illustrative discount that would apply if late payment revenues and uncollectible expense related to previously purchased receivables were only forecast through December 2024. The residential POR discount under this approach would be 3.9977%. Potomac Edison does not recommend this approach
To the extent the residential POR program has unrecovered costs under the updated discount rate, Potomac Edison noted BGE's previously reported (story here) proposal to assign all such outstanding costs (or credits) to residential retail suppliers who had their receivables purchased during December 2024, with costs allocated to retail suppliers based on their share of all residential receivables purchased during calendar year 2024
While Potomac Edison called BGE's proposed approach "reasonable" and does not object to it, Potomac Edison reserved the right to propose an alternative mechanism, upon the calculation of the final reconciliation
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September 19, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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