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PSC Orders Utilities To Pauses Work On Supplier Consolidated Billing, Since Zero Retail Suppliers Have Agreed To Testing
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Citing a lack of retail suppliers who have agreed to participate in utility testing for supplier consolidated billing, the Maryland PSC ordered the state's utilities to pause work on implementing supplier consolidated billing (SCB)
The PSC pressed retail suppliers to "expeditiously" commit to participate in SCB and utility testing of SCB. While the PSC exhorted suppliers to commit to SCB expeditiously, the PSC did not set a specific deadline for the submission of any such commitments by retail suppliers.
The PSC's decision was prompted, in part, by the cost recovery design for SCB.
As previously reported, costs for SCB are initially assigned to distribution customers, so that no initial impediment is created to supplier participation (as would be the case if an initial entry fee for SCB were charged to recover costs upfront). Suppliers using SCB will pay a per-bill fee of $2 per bill issued under SCB, which will be paid back to ratepayers to offset the initial costs assigned to ratepayers
The PSC noted that, if no suppliers use SCB, ratepayers will have expended millions of dollars for an unused system.
As such, the PSC ordered the utilities to pause any "new" SCB implementation work until retail suppliers commit to SCB (the PSC did not establish a specific threshold or other factor to determine when SCB work shall resume, such as a number of suppliers making the requisite commitment)
The PSC noted that BGE, Pepco, and Delmarva have, in aggregate, spent $24 million on SCB, with an average ongoing monthly cost of $1 million to maintain needed IT contractors staffed for SCB implementation and to maintain the coding environment used for developing SCB
The PSC said that it is "concerned" that, "no supplier has volunteered to participate in system testing or agreed to participate in SCB."
The PSC observed that the suppliers who had petitioned the PSC for the adoption of SCB had alleged various benefits from the billing mechanism, "yet not even one Petitioner has agreed to assist with system testing."
Further, the PSC cited billing changes under SB1, including an end of residential POR, as heightening the importance of SCB, with the PSC calling SCB a "primary" billing practice for suppliers
"SCB will become a critical and primary billing practice of retail suppliers in Maryland, especially if UCB with POR is no longer available as a billing option to suppliers," the PSC said
"The Commission therefore expects retail suppliers to come forward in the near future to participate in SCB testing and to commit to using SCB for billing their customers," the PSC said
While the PSC expressed concerns about SCB cost recovery as described above, the PSC declined to make any changes in the SCB cost recovery mechanism at this time, though, as noted, it did order a pause on SCB work, in order to halt additional costs
Given the pause and lack of supplier commitments to SCB, the PSC extended the deadline for SCB go-live indefinitely, removing the previously set December 31, 2024 implementation date
In the SCB order, the PSC found that SB1, which generally prohibits POR for residential customers, does not prevent the utility from re-purchasing delivery-related receivables from retail suppliers under SCB (specifically, any distribution arrearages which remain after reasonable collection efforts by the supplier)
The relevant provision of SB1 states, "A residential electricity supplier may not sell to an electric company, and an electric company may not purchase from the electricity supplier, accounts receivable."
However, this provision is contained within subsection (d) of § 7-510, which expressly applies only to "residential electricity supply."
The Commission agreed that delivery receivables are not "residential electricity supply".
The Commission found that subsection (d) of § 7-510 means that a utility's purchase of delivery arrearages under SCB is not prohibited under SB1.
The PSC further noted that its SCB rules which require the utilities to purchase distribution arrearages under SCB were in place when SB1 was passed, and thus the legislature could have explicitly included the re-purchase of distribution arrearages by the utilities in the POR prohibition if such was the intent of lawmakers
The PSC also observed that the receivables re-purchased by the utilities under SCB are regulated distribution charges, which were not the concern of SB1, which was passed to address unregulated retail supplier charges
The PSC also did not, on its own authority on policy rather than statutory grounds, order the initiation of any SCB rule change to modify the current rule which requires that a utility shall re-purchase delivery arrearages under SCB
Case 9461
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PSC Presses Retail Suppliers To "Expeditiously" Commit To Using Supplier Consolidated Billing
PSC Rules New Law Banning POR Does Not Prohibit Utility's Re-purchase Of Delivery Receivables Under SCB
December 11, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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