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Illinois ALJ Recommends Rejection of Flat Fee to Recover ComEd POR Implementation Costs

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October 11, 2010

An Illinois ALJ has recommended that Commonwealth Edison's Purchase of Receivables discount rate be established solely as a fixed percentage discount off of a supplier's receivables, with no flat per-bill charge as proposed by ComEd (Docket 10-0138).

The actual discount rate recommended by the ALJ is apparently 2.167% for all customers; however, it is not clear whether that total reflects the correct discount percentage for non-residential customers.

The ALJ recommended rejecting ComEd's proposed discount rate of a flat fee of 50¢ per bill for administrative and implementation costs, plus a discount rate reflecting uncollectible percentages of 2.239% for residential customers and 0.774% for non-residential customers. ComEd's proposal was supported by the Illinois Competitive Energy Association and Retail Energy Supply Association, but opposed by Illinois Commerce Commission Staff and Dominion Retail (Matters, 8/5/10).

"If retail electric suppliers passed on ComEd's proffered $0.50 per-bill charge to their customers in the manner in which ComEd bills them, effectively, lower-end (in usage) PORCB customers would subsidize the higher-end users. No party has proffered anything to indicate that this was the intent of the General Assembly. In fact, the statement of legislative intent indicates the opposite, which is, that all Illinoisans should benefit from the services of retail electric suppliers," the ALJ found.

"While ComEd contends that its costs per bill are constant, high-use customers use a greater amount of retail electric supplier service. However, it is the policy of this State to reduce overall energy consumption. (220 ILCS 5/8-103). The subsidy proposed by ComEd and by various retail electric suppliers does not further this policy," the ALJ said.

The ALJ accepted Staff's alternative administrative discount percentage of 0.44% to recover implementation costs. Furthermore, the ALJ concluded that, "it is in the best interests of Illinoisans in ComEd's service territory if there were one single charge for uncollectibles, as opposed to one uncollectible charge for residential customers and a different uncollectible charge for commercial customers."

"ComEd shall amend its tariffs to reflect this charge, which is 1.727% (2.239% + 1.215% divided by two)," the ALJ continued. However, while 2.239% reflects residential uncollectibles, the non-residential uncollectibles rate according to a Staff brief is 0.774%, not 1.215%, and it is not clear what figure the ALJ is using. As written, the ALJ's discount rate would be 2.167% (0.44% plus 1.727%); however, if the ALJ's calculation were repeated using 0.774% as the non-residential discount rate, the total discount rate would be 1.9465%.

The ALJ declined to require ComEd to use late payment fees to offset the uncollectibles factor.

The ALJ would accept ComEd's proposed enrollment timeline and 10-day rescission period but, "only as a temporary stop-gap until such time when Part 412 is in effect."

"At that time, Part 412 will govern the effective rescission period," the ALJ stated.

"Nothing in this Order should be construed in a manner that would conflict with, or override, Commission regulations. When the rulemaking for Part 412 in docket No. 09-0592 comes to an end, Part 412 will govern the applicable areas. Further, in this proceeding [we] are not making any determination regarding whether any new rescission period (or other potential additional obligations) will apply to non-residential customers who use more than 15,000 kilowatt hours on an annual basis," the ALJ added.

Due to uncertainty over the rescission period issue, whose adjudication could prompt additional billing system modifications, ComEd had filed modified tariffs delaying the proposed start date of POR from December 1, 2010 as originally filed, to April 1, 2011.

The proposed order would, "make no determination ... as to whether ComEd should be allowed to extend its 'go live' date beyond December 1, 2010, except to note that, as a result of this docket, there is no need to do so."

"In that vein, here, we are not authorizing ComEd to extend its 'go live' date beyond December 1, 2010. ComEd has stated, here, essentially, that changing the rescission period involves complicated IT changes, which will push that date back for approximately four months. No evidence has been presented to indicate that this is incorrect. It is with this evidence, and the potential for a conflict with a Commission rule, (Part 412) that this Commission concludes that no change to ComEd's tariffs is warranted at this time. We note that the Part 412 rulemaking has been in litigation for quite some time; it is therefore possible that, in that proceeding, ComEd has been on notice for several months, due to the litigation in that proceeding regarding this issue, that it may have to change its IT programming and related matters," the ALJ said.

However, "[w]e make no determination as to the notice that ComEd received in another docketed proceeding, except to note that the ruling here is with limited evidence regarding what amount of notice that ComEd had regarding the IT changes that would be necessary to implement a change in the rescission period. Additionally, any conclusion here is based solely on the limited facts presented here; it cannot serve as precedent in the Part 412 Rulemaking proceeding, regarding when the 'go live' date can occur. In that proceeding, there may be different facts regarding the amount of time that ComEd personnel knew, or, should have known, that there would be, or could be, a change in the rescission period, thus necessitating the massive IT changes that ComEd alleges are necessary for such a change," the ALJ added.

The ALJ further declined to adjudicate in the POR docket the definition of mass market customer, which would be eligible for the rescission period, as that matter is being litigated in the Part 412 rulemaking docket. "We specifically note that here, the applicable tariffs will remain as they are in their current form, but, temporarily, until the time when Part 412 is adopted by this Commission in Docket no. 09-0592. At that time, ComEd shall comply with whatever is required of it in that docket pursuant to the rule (Part 412) that is promulgated pursuant to that docket," the ALJ said.

The ALJ would deny requests from retail suppliers to require ComEd to include, in its consolidated bills, the inserts from retail suppliers which suppliers are legally required to send customers (e.g. environmental disclosures, etc.)

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