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Pennsylvania PUC Issues Formal Proposed Rulemaking to Modify Interest Rate Charged to Default Service Reconciliations

October 3, 2014

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Copyright 2010-14 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

The Pennsylvania PUC has issued a formal rulemaking proposal containing revised regulations governing interest rates applicable to electric default service over-collections and under-collections.

Under the proposed rule, interest on both over-collections and under-collections shall be computed at the prime rate of interest for commercial banking in effect on the last day of the month the over or under collection occurs, as reported in the Wall Street Journal or other publicly available source identified by the Commission.

Interest shall be computed monthly from the month the over collection or under collection occurs to the effective month that the over collection is refunded or the under collection is collected

This uniform interest rate would apply to over- and under-collections of the following charges:

• Price-to-Compare (PTC)

• Hourly Pricing Default Service Rider (HPDSR)

• Transmission Service Charge (TSC)

• Generation Supply Charges 1 & 2 (GSC-1 & GSC-2)

• Generation Supply Adjustment 1, 2, 3, 4 (GSA 1-4)

• Generation Supply Service Rate (GSSR)

• Default Service (DS)

• Default Service Supply (DSS)

Currently, for most of the charges listed above, the "legal rate" of interest (defined as 6%) is applied to under-collections, and the legal rate of interest plus 2% is applied to over-collections.

This current policy results in interest rates that are well above current market-based rates, the PUC has said

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