WGL POR Delayed Until March 1, 2011 at the Earliest Email This Story January 20, 2011
Purchase of Receivables at Washington Gas Light in Maryland will be delayed until
March 1, 2011 at the earliest, after the Maryland PSC took WGL's compliance filing
As only reported in Matters (12/22), one of the outstanding issues regarding WGL's
POR program is the appropriate time period for amortization. Pro forma discount
rates based on two, three or five year amortization are available in our 12/22 story.
WGL had been seeking a February 1, 2011 start for POR, and needed a prompt decision
to allow final testing prior to implementation.
Commissioners expressed a need for additional time to review WGL's costs to be recovered
in the POR discount rate, particularly regarding the process through which IT costs
Competitive suppliers did not file any comments, adverse or supporting, regarding
WGL's most recent compliance filing. Commissioner Susanne Brogan asked Staff if
that should cause any concern, given suppliers' more active involvement in other
POR proceedings before the PSC.
However, it should be noted that the WGL program is unique in that it was essentially
negotiated with suppliers before being filed. Originally, to comply with COMAR 20.59,
WGL elected to pro-rate partial payments between supply and distribution costs, rather
than use POR. At the request of suppliers, WGL entered negotiations to develop a
POR program acceptable to all parties, ultimately resulting in a POR filing in December
2009 (12/8/09). Accordingly, unlike with the other utilities, the negotiated nature
of the WGL POR program left little room for suppliers to seek any modifications through
the PSC proceedings, and thus little need for active intervention.
Also outstanding, on a separate track from WGL's compliance filing, is WGL's rehearing
request regarding its ability to reconcile bad debt costs under POR. Originally,
bad debt was excluded from WGL's POR reconciliation factor because any under-recovery
of bad debt costs was to be addressed in a risk factor. However, the PSC rejected
the proposed risk factor, prompting WGL to seek rehearing to ensure bad debt costs
may be reconciled in the reconciliation component, similar to other POR programs
approved by the PSC.