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Shock: Utility Refunding Over-collection of Distribution Charges To SOS Customers Only -- Without PSC Authorization

December 21, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Pepco has been refunding to District of Columbia SOS customers, through the Procurement Cost Adjustment (PCA), over-collections under the Residential Aid Discount (RAD) Surcharge, which is a surcharge paid by distribution customers

The D.C. PSC said in orders issued Friday that such action has not been authorized by the Commission. "Pepco's use of the PCA to true-up RAD Surcharge over- or under-collections came as a surprise to the Commission," the PSC said

"The 2005 Schedules applicable to the PCA contain no language that authorizes its use to address over- or under-collections in the RAD Surcharge. Moreover, there is no Commission order that specifically authorizes Pepco to use the PCA as a means to true-up the cumulative over- or under- collections for the RAD Surcharge," the PSC said

The PSC said that based on its 2005 order relating to the PCA, and the definition of the PCA contained therein, "the PCA is an adjustment to reflect the Company's cost of providing SOS; consequently, the PCA is an adjustment to be applied only to the bills of customers who take SOS Service. There is no reference in the tariff to its use as a means to true-up the cumulative over- or under-collections for the Rider 'RADS' Surcharge which is paid for by all distribution ratepayers except RAD customers and net exporting net energy metering customers who do not pay fees based on volumetric charges; nor is there any Commission order that specifically authorizes Pepco to use the PCA for that purpose."

The PSC directed Pepco to, "immediately cease using the PCA as a means to true up, account for, credit or collect any over- or under-collection of RAD Surcharge revenue for SOS."

"Instead, any such cumulative over- or under-collection shall only be collected through the true-up procedure that is provided for in Pepco's annual Rider 'RADS' surcharge filing," the PSC said

Some $6 million in RAD over-collections has been credited back to SOS customers

The PSC also opened Formal Case No. 1134 to further investigate Pepco's use of the PCA.

"The discovery that the PCA was being used as a tool to adjust over and under collections for the RAD Surcharge revenues for SOS program underscored the fact that the Commission has not conducted a review of the uses and the operation of the PCA since it was first included in the 2005 tariff. Such a periodic review is both appropriate and prudent," the PSC said

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