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D.C. PSC Rules on Offset to Pepco POR Discount Rate
The District of Columbia PSC has approved Pepco's purchase of receivables discount rates as filed in September, which excluded any offset resulting from late payment revenues paid by competitive supply customers.
The PSC had previously directed the inclusion of late payment revenues as an offset to the POR discount rates. The Retail Energy Supply Association had protested Pepco's initial discount rates because they did not include an offset from late payment revenues. Pepco had said that it did not include such offset since its billing system cannot currently calculate late payment revenues on competitive supply receivables, and that once a new billing system is in place, it will begin using late payment revenues as a POR offset.
In ruling on RESA's protest, the PSC said that it recognized that Pepco would not be able to immediately implement the late payment revenues (LPRs) as a POR offset.
"Although Order No. 17052 directed Pepco to implement the POR program within nine months of issuance of that Order, it was not contemplated that LPRs would be calculated in the Discount Rate within the same timeframe. The Commission was aware of Pepco's inability to calculate LPRs when it directed Pepco to implement the POR Program within the nine-month timeframe. Pepco's position at the time was that the implementation date imposed by the Commission for a POR program should coincide with the Company's installation and successful testing of its new billing system, which is scheduled to occur in 2014. However, whether the nine-month implementation timeframe also included the time needed for Pepco to successfully modify its billing system to be able to bill and collect for LPRs was not an issue that was considered in Order No. 17052 ... [T]he Commission understood Pepco's proposed nine-month timeframe to reflect the minimum amount of time it would take to implement POR, based upon the Company's original proposal that did not include LPRs in the calculation of the Discount Rate," the PSC said.
"Given this clarification of the Commission's orders, we will continue to rely on Pepco's assertion from its October 25, 2013 Reply Comments that when its new billing system is in place, this issue will be resolved and Pepco will be able to both collect and account for LPRs in the POR program. We are directing Pepco to provide the Commission with a status report on its billing system and its ability to include LPRs in the Discount Rate, including a date certain in 2014 when its billing system will be complete. If Pepco fails to complete its billing system by that date certain in 2014, we will not rule out the possibility of directing Pepco to implement one of two options suggested by RESA in it filings," the PSC said.
As a result of the PSC's order, the following discount rates used by Pepco since September have been maintained.
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March 10, 2014
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Reporting by Karen Abbott • kabbott@energychoicematters.com
R, AE, R-TM 1.3737%
RAD, RAD-AE 1.7598%
GS-LV ND, T, SL, TS, TN (SOS) 1.3296%
GS-LV, GS 3A, GT LV, GT 3A, GT 3B, RT (SOS) 0.2083%
GSLV-ND, GS-LV, GS 3A, GT LV, GT 3A,
T, SL, TS (Market-Priced Service) 0.0130%
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