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State Approves Implementation Plan for Purchase of Receivables At New Utility, With 5% Discount

October 21, 2015

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

The Massachusetts DPU has approved the implementation plan for purchase of receivables at Fitchburg Gas and Electric Light Company d/b/a Unitil

The implementation plan, while including certain details of the POR program, did not include a specific effective date, as Unitil said that it will implement POR within 60 days of a DPU order approving its plan, and that it will refile its approved POR terms and conditions 30 days prior to the implementation of the POR program.

Under Unitil's adopted implementation plan as-filed in April, the initial POR discount, or Standard Complete Billing Percentage discount, is to be 5.16% for the Residential class and 1.96% for the Small & Regular General classes.

It is not clear if these discounts will change based on updated uncollectible data since Unitil's initial filing in April. Unitil's adopted POR terms and conditions provide that the uncollectibles percentages, "is based on actual uncollectible expense data for the participating Customer Class for the past 12-month period for which data is available prior to the annual filing (or other appropriate period approved by the M.D.P.U.)"

For purposes of its April implementation plan, calendar year 2014 uncollectibles were used. It is not clear if this data will be updated in the final terms and conditions (or whether it would result in any appreciable difference in the high residential discount rate)

The discount reflects the sum of uncollectibles and administrative costs, and in the future will include a reconciliation (past period reconciliation)

As filed, the initial uncollectibles percentages are 4.78% for the Residential class and 1.58% for the Small General & Regular General customer classes

The initial administrative cost percentage is 0.38% for all classes.

POR will only be available to the Residential and Small General & Regular General customer classes. Unitil will not offer POR for its largest customers, the GD-3 rate class.

Unitil's program also differs from the programs in place at the other Massachusetts utilities in that Unitil will make a single monthly remittance of receivables encompassing all eligible classes to each supplier, rather than sending numerous smaller remittances over the course of a month. Unitil also will not more heavily discount existing receivables by age, with the initial POR discounts listed above applied to both the purchase of existing receivables and to the purchase of supplier receivables that accrue after the implementation of the POR mechanism.

Docket 15-POR-04

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