BGE Proposed POR Discount Rate Revised Downward As Result Of PSC Order
August 16, 2017 Email This Story Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • email@example.com
Baltimore Gas & Electric earlier this month filed revised proposed updates to its electricity purchase of receivables discount rates as a result of a recent Maryland PSC letter order rejecting certain costs BGE had sought to include in the discounts.
Baltimore Gas & Electric's proposed new electric POR discount rates are as follows (current and initially proposed discounts provided for comparison):
Current Initial Revised
Discount Proposal Proposal
Residential 0.0359% 0.2350% 0.1366%
Type I 0.0000% 0.0000% 0.0000%
Type II 0.0000% 0.0000% 0.0000%
Hourly 0.0000% 0.0000% 0.0000%
The revised POR discounts listed above remain subject to PSC review at a future admin. meeting (currently scheduled for Sept. 13)
The PSC in a letter order rejected BGE's proposal to remove late payment revenue fees as a component of the POR discount (which offset uncollectibles), and rejected without prejudice inclusion of RM 54 compliance costs in the discount
Regarding late payment revenue fees, the PSC said, "Since the inception of the POR discount, the Commission has directed BGE and other utilities to track late fees that are assessed and collected as part of the consolidated billing system, and to disclose and include the data as part of the utility’s next annual POR discount rate filing for the Commission’s consideration. For the past six years the Commission has consistently approved the inclusion of the LPCs in the discount rate calculation. Similarly, the Commission has consistently denied any request for exclusion of these charges. The Commission reaffirms the reasons previously given for requiring the inclusion of LPCs in the calculation, declines to make the significant policy change being requested by BGE, and denies the Company’s request that LPCs be omitted from its POR discount rate."
Regarding RM 54 costs, which included accelerated switching, the PSC said, "the Commission does not believe that it would be appropriate to force suppliers and their retail customers to bear the costs associated with the implementation of a program that benefits all ratepayers, as well as the competitive market as a whole. RM54 implemented stronger protections for customers choosing to receive service through a competitive supplier, as well as for all SOS customers given that they may at any time choose to switch to a competitive supplier, as well. RM54 made switching service safer, easier, and more efficient for all customers choosing to do so. These added securities also help to foster market competition, which the Commission finds to be a benefit to all customers."
"For the foregoing reasons, the Commission denies, without prejudice, BGE’s proposal that RM54 program development costs be included in the calculation of the POR discount rate. Rather, if the Company so chooses, it may include RM54 costs in a future rate case, thereby allowing the recovery of such costs to be spread among all customers who may benefit therefrom. In such a rate case, the Commission will evaluate the appropriateness of allowing RM54 cost recovery from the balance of the fund developed as a result of previous and continued over-collections by the Company and encourages BGE to develop a strong record in this matter," the PSC said
The PSC have previously accepted BGE's updated natural gas POR discounts, effective June 1, which were not affected by the PSC's letter order. BGE did file to remove RM 54 costs from the gas discounts as well, but since the discounts were already "zero-ed out" as a result of being negative, there was no change in the discounts charged to suppliers as a result
BGE's natural gas POR discount rates are as follows, effective June 1, 2017:
Prior Discount 6/1/17 Discount
Residential (Sch. D) 1.8989% 0.0000%
General Service (Sch. C) 0.0000% 0.0000%