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Utility Seeking To Impose New Credit Requirements On Retail Suppliers
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Retail electric suppliers currently serving, or seeking to serve, customers at Public Service of New Hampshire (PSNH or Eversource) would be subject to a new creditworthiness requirement under proposed changes to PSNH's s Electric Supplier Services Master Agreement (supplier agreement)
PSNH's sought creditworthiness standard for retail suppliers is among several changes to PSNH's supplier agreement and tariff that PSNH has filed to implement purchase of receivables. As previously reported, the PUC has approved the major design elements of POR, and had directed the development of tariffs to implement the program
PSNH proposes to mandate that, under the supplier agreement, retail suppliers shall be "Creditworthy".
"Creditworthy" would be defined by the supplier agreement to mean a credit rating of at least BBB- from Standard & Poor's or at least Baa3 from Moody’s (with such rating agencies the only two cited in the definition)
For a supplier not meeting this definition of "Creditworthy", the supplier would be required to provide an additional assurance amount to PSNH.
Such assurance would be in the form of a letter of credit, in a manner and from a bank acceptable to PSNH, or other credit support acceptable to PSNH, which the supplier agreement states could be a parent guaranty from a Creditworthy entity
The additional assurance would be required to be provided within 3 business days of a request from PSNH
The proposed supplier agreement does not otherwise address creditworthiness, including factors to be considered in, or the nature of the calculation of, any additional assurance amount
The NRG Energy retail suppliers opposed PSNH's proposed creditworthiness provision, arguing that the revision to the supplier agreement is not related to POR. NRG Energy said that PSNH did not explain the rationale for this sought change
NRG Energy argued that retail suppliers already demonstrate creditworthiness to the PUC in receiving a license
NRG Energy said that, to the extent the credit provision is adopted, the period provided to suppliers to meet any additional assurance request should be extended to 10 business days
NRG Energy also expressed concerns with certain other aspects of PSNH's filing to implement POR
Separately, NRG also raised concerns with the proposed implementation of POR at Granite State Electric (GSE or Liberty Utilities), due to, most notably, GSE's proposal to return a supplier's customers to default service if the supplier does not execute a new Energy Service Supplier Agreement (ESSA or supplier agreement)
The current supplier agreement, executed by the supplier and GSE and setting forth obligations for each party, permits retail suppliers to bill customers under utility consolidated billing without POR, or through dual billing. This existing authorization to use UCB without POR, absent the adoption of GSE's sought changes, would ostensibly continue, and apparently mandate that GSE offer UCB without POR until otherwise ordered by the PUC (through a change to the supplier agreement, etc.).
GSE's proposed new supplier agreement would allow retail suppliers to use consolidated billing with POR (the only form of UCB available under the new agreement) or dual billing. The new supplier agreement would not allow UCB without POR
GSE said that a settlement addressing design elements of POR "contemplates" that GSE would only provide consolidated billing with POR, with the current non-POR consolidated billing terminated.
GSE said that, "utilities cannot be expected to
maintain two consolidated billing services, one that includes POR and one without for
those that do not sign, and the approved Settlement Agreement in this case contemplates
Liberty providing only consolidated billing with POR."
GSE said that a supplier not signing the revised supplier agreement, which mandates either UCB with POR or dual billing as the only two options, could hold up implementation of POR, by such supplier enforcing terms in the existing supplier agreement that require GSE to offer non-POR UCB.
As such, GSE proposed to "leave[] behind" any supplier not executing the new supplier agreement
Specifically, GSE would drop to default service the customers of any suppliers not executing the new supplier agreement
GSE said that under its preferred solution described above, POR would be implemented on May 1, 2025
However, if the requirement to sign the new supplier agreement is not adopted by the PUC, GSE said that the POR launch would be a "soft target" as GSE would have to wait until all suppliers sign the new supplier agreement
GSE said that dropping customers to default service, if the customer's supplier does not execute the new supplier agreement, would ensure that no supplier is able to hold the roll-out of POR "hostage".
NRG opposed GSE's changes.
NRG argued that for suppliers currently using dual billing, there is no need to compel the suppliers to execute the new agreement or to drop the supplier's customers to default service absent such execution
NRG said that, if a supplier does not sign the new supplier agreement and is using UCB, then GSE should move all of the supplier's customers to dual billing (standard billing in the parlance of the agreement).
GSE had raised concern in making its proposal that some suppliers may not be equipped to engage in dual billing
NRG also objected to language in GSE's proposed tariff that NRG said would result in a unique uncollectibles discount rate for each supplier, by calculating the discount based on the specific supplier's billings
NRG said that this supplier-specific method for calculating the uncollectibles discount rate departs from the settlement adopted by the PUC
Dockets:
PSNH: DE 23-004
GSE: DE 23-003
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Utility Proposes Supplier-Specific Discount Rates For POR
October 14, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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