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BGE Files To Lower POR Discount Rate, Asks PSC To Reconvene Workgroup on Negative Discounts

March 24, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

Baltimore Gas & Electric has filed proposed updates to the electric and natural gas purchase of receivables discount rates, to be effective June 1, 2015.

In doing so, BGE asked the PSC to reconvene a supplier coordination working group to address negative discount rates, and the application of late payment charge revenue to the POR discount which BGE said is the primary driver of negative discount rates (which are set to 0% under PSC policy). All but BGE's residential discount rates would be set at 0% under this policy.

"In 2012, the Commission directed the Supplier Coordination Working Group to convene to consider the inclusion of late payment charges in the discount rate or other options that will minimize the possibility of negative discount rates occurring in the future. See Commission's Letter Order (June 21, 2012). BGE does not believe setting rates to zero indefinitely into the future is an adequate manner to address the issue on a long-term basis. The working group has not submitted a report to the Commission and there has not been a working group meeting on this issue for the past ten months. Until a resolution is reached, BGE will continue to re-set the negative rates to zero. BGE has held that the inclusion of late payment revenues as an offset is a key cause for the negative rates. BGE respectfully asks that the Commission direct that the working group reconvene to address this issue in the near-term, and that the Commission set a date certain by which the working group must provide a report to the Commission," BGE said.

Baltimore Gas & Electric's updated electric POR discount rates, effective June 1, 2015, are as follows:

             Current Discount      New Discount
Residential      0.9475%             0.4764%*
Type I           0.0000%             0.0000%
Type II          0.0000%             0.0000%
Hourly           0.3564%             0.0000%

*Note: 0.4764% is the June 1, 2015 residential POR discount as listed in BGE's clean and redlined tariffs and supporting calculation. An explanatory memo, however, lists the new residential electric discount as 0.6754%.

BGE's natural gas updated POR discount rates are as follows, effective June 1, 2015:

                         Current Discount   New Discount
Residential (Sch. D)        1.4337%           1.1889%
General Service (Sch. C)    0.0000%           0.0000%

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