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Two Proposals Offered To Allow Shopping Customers To Receive Low-Income Discount

June 1, 2015

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

Two proposals have been offered to the District of Columbia PSC to make the residential low-income electric assistance discount portable, or available to customers regardless of their electric supplier.

Currently, the discount is only available to customers on SOS.

PSC Staff has proposed replacing the current discount with a new discount set equal to the residential distribution customer charge and distribution volumetric charges. Such discount would apply to all eligible assistance customers, regardless of supplier.

The District Department of the Environment and the Office of the People's Counsel have alternatively proposed that low-income assistance customers receive a 33% discount off of their total bill amount (exclusive of surcharges), based on actual usage.

Under the DDOE/OPC proposal, the 33% bill discount would apply equally whether or not the customer chooses a third-party supplier for generation. For those assistance customers who switch from SOS, the discount would be calculated using SOS rates, and not the alternative supplier's rates.

Under the DDOE/OPC proposal, Pepco would need to perform an internal calculation for those assistance customers who switched to third-party suppliers because the discount would assume Pepco's SOS price for generation, not the actual generation price of third-party suppliers. Pepco has indicated that it can make this calculation, according to a workgroup report. DDOE/OPC state that their proposal uses the SOS rate for purposes of calculating the discount regardless of the customer's supplier, because suppliers may charge more than the SOS rate, and giving a 33% discount off third-party supplier prices may potentially produce an undesirable result that ratepayers would be subsidizing the higher generation prices of third-party suppliers.

DDOE/OPC argue that their proposal is superior because basing the assistance credits solely on distribution charges would reduce the assistance provided versus current assistance levels, and would provide a smaller percent of bill assistance in the future as non-distribution rate components increase

While portable, the DDOE/OPC has been criticized because customers served by a third-party supplier may be confused about their discount being based on SOS rates, rather than their actual supplier rate.

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