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Pepco Proposes Further Change To Annual POR Discount Rate Update

June 19, 2018

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Pepco has filed with the Maryland PSC further revisions to its proposed updated purchase of receivables (POR) discount rates.

Pepco said that, after further discussions with Staff the Company has removed the RM54 costs from the calculation, deleted the detailed calculations of RM54 - Accelerated Supplier Switching Cost Component, and changed the amortization period for RM54 costs from three to two years.

The revisions only result in a change to the proposed Type II discount rate, resulting in the proposed discount rate going from the originally proposed 0.1042% to 0% (as the changes result in a negative discount rate, which would be "zeroed out")

The newly proposed discount rates (as well as unaffected updates) are now proposed to take effect August 1, rather than July 1.

For the residential discount rate, the RM54 costs included in Pepco's original proposal had been 0%. For the other non-residential classes (Type I, hourly), while Pepco's changes do result in a larger negative discount rate, these rates had already been proposed to be "zeroed out" consistent with PSC precedent to not apply negative discount rates under POR, as thus while Pepco's updated calculations will affect any accruing balance, the actual proposed discount rate is not affected.

Pepco's current and proposed total POR discount rates are below:

                       Original     New 
             Current   Proposal   Proposal
Residential  0.6339%   0.6859%    0.6859%
Type I       0.0000%   0.0000%    0.0000%
Type II      0.0000%   0.1042%    0.0000%
Hourly       0.0000%   0.0000%    0.0000%

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