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ComEd POR Order States Rider UF to be Used to Set Uncollectibles Rate

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December 17, 2010

A written order on Commonwealth Edison's purchase of receivables program holds that uncollectible costs shall be determined by Rider UF.

As first reported in our live blog yesterday, the order states:
"No party contested ComEd's proposal that, to determine the percentage reduction for the recovery of uncollectible costs that are associated with the purchase of receivables, ComEd will apply the same supply-related uncollectible cost factors set forth in its Rider UF - Uncollectible Factors ('Rider UF') that it applies to its own supply charges under Rate BES, ComEd's fixed-price bundled electric service tariff. This proposal links the historic bad debt rates used in setting ComEd's supply charges with those used in the PORCB discount. It also identifies when the uncollectible cost factors will be established."

Rider UF provides a complex formula to set the supply-related uncollectible rate applicable to various customer classes. Rider UF includes both a "base" uncollectible amount as well as incremental amounts.

Rider UF contains unique rates applicable to the following customer designations: R for residential retail customers, N for non-residential retail customers in the Watt-Hour Delivery Class, the Small Load Delivery Class, the Medium Load Delivery Class or the Large Load Delivery Class, or A for all other retail customers.

Rider UF, and its base amounts, can be found on sheet 267 in ComEd's tariff (p. 280 of the PDF). An informational filing with the incremental UF rates is on page 442 of the same PDF.

According to Staff testimony filed in May, using the still most recent Rider UF informational filing, the relevant uncollectibles factor for a residential customer under POR using ComEd's proposal for uncollectibles adopted by the ICC is 2.239%. Staff testimony also listed the uncollectibles rate for non-residential customers under POR as 0.774% when using Rider UF. Matters provides these numbers for informational purposes, but notes they are not contained in the final order.

In addition to these uncollectibles amount, suppliers using POR will be charged a flat fee of 50¢ per bill for implementation costs, as noted yesterday. In adopting the flat charge for implementation costs, and in response to arguments that the charge will hinder low-volume shopping, particularly residential shopping, the ICC said that,
"[n]othing in that debate indicates that the General Assembly intended any class of consumer to be the primary beneficiary of [POR]."

"Accordingly, we adopt the fixed charge approach, which properly accounts for the fixed nature of the start-up and implementation costs being recovered by that charge. The fact that start-up and implementation costs do not vary with the amount of receivables purchased is an unrefuted fact," the ICC said.

The order states that ComEd shall institute its POR program no later than December 31, 2010. New tariff sheets conforming to the order should be filed within five business days from the date upon which the order is entered, to be effective "immediately." The order was dated December 15, and served on parties on December 16.

The order provides that, "ComEd's proposed 18-calendar enrollment window is adopted herein, but, it is adopted 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. Part 412 will also govern any potential modifications to the approved enrollment window in the tariffs that are at issue here."

"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. We also recognize that there is a distinction between the extended enrollment period described in ComEd's proposed tariff revisions and the rescission period that is contemplated in the Part 412 Rulemaking. The latter addresses issues between a retail electric supplier and the end-user customer while the former does not," the order states.

Similarly, the order, "is not making any determination in this proceeding as to whether any new rescission period (or any other potential obligations) will apply to non-residential customers that use more than 15,000 Kilowatt hours annually. Therefore, approving ComEd's proposed tariff revisions shall not prejudice the issue of what constitutes an appropriate definition of a 'small commercial customer,' as is or will be, contemplated in any rulemaking concerning Part 412."

The order declines to require ComEd to provide bill inserts on behalf of retail suppliers in utility consolidated bills, such as environmental disclosures required of suppliers.

ComEd's POR program includes an all-in/all-out provision for residential customers, which was not contested during the case.

As noted yesterday, the order directs the Office of Retail Market Development to monitor POR implementation and migration. "[I]f in the opinion of ORMD, residential and small commercial customer switching rates are not developing at an adequate pace, the Commission recommends ORMD hold workshops to determine why that is the case. The workshop process will serve to establish reasonable goals and timelines to enhance residential and small commercial switching rates. Further, the Commission requests the parties to provide the ORMD with any reasons they believe have resulted in customer switching lag, whether it be POR/UCB design, wholesale market barriers, differences between RTO business models, or any other structural or market barriers that become apparent to market participants - all constructive comments are encouraged," the order states.

The POR docket is 10-0138

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