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WGES Seeks Rehearing on WGL POR Discount Rates
July 12, 2011
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Washington Gas Energy Services has sought rehearing on the Maryland PSC's June order establishing Purchase of Receivables discount rates at Washington Gas Light (see 6/17).
Specifically, WGES is seeking rehearing of the PSC's decision to use a two-year amortization period for implementation costs. The two-year amortization resulted in relatively high discount rates of 4.39% for residential customers, and 0.83% for non-residential customers.
WGES is seeking use of a five-year amortization period, which was originally recommended by WGL and initially supported by Staff, WGES said. A five-year amortization would result in a residential discount rate of 3.09%, and a non-residential discount rate of 0.79%.
"There is significant risk that the high 4.39% residential discount rate will undermine the purpose of instituting the POR program which is to encourage new competitors to enter the residential market on the WGL system," WGES said.
WGES also called the two-year amortization period inconsistent with the Commission's actions with respect to other POR programs. Specifically, WGES noted that a five-year amortization was used at Delmarva. While two-year amortization periods have been used at other utilities, WGES noted that this shorter amortization period did not result in a residential discount rate higher than 2.5% in any of these cases, unlike at WGL and Delmarva (absent the five-year period).
Additionally, the utilities using two-year amortization had previously recovered much of the implementation costs related to IT changes to support retail choice (included in the WGL POR discount rate) via base rates.
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