New York PSC Approves Tariff Filing Revising Purchase Of Receivables (POR) Program
November 19, 2018 Email This Story Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • email@example.com
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The New York PSC has approved tariff filings from Consolidated Edison (ConEd, Con Edison, or the Company) modifying the manner in which credit and collections and theft (C&C) recoveries for retail access customers served by Energy Service Companies (ESCOs) that participate in the electricity Purchase of Receivables (POR) program are reconciled.
The four components of the POR Discount Percentage are the Uncollectible Bill Percentage, Risk Factor, C&C, and Incremental Cost. The Uncollectible Bill Percentage component is based on the Company's actual uncollectible bill experience applicable to electric customers for the 12-month period through the previous November. The Risk Factor component is equal to 15 percent of the Uncollectible Bill Percentage. The C&C component (C&C POR Rate) includes: (a) the ratio of the Company’s credit and collection expenses attributable to retail access customers whose ESCOs participate in the Company’s POR program and the estimated electric supply costs to be billed on behalf of ESCOs through the POR program; and (b) a percentage that reflects a reconciliation of prior periods’ credit and collections expenses and recoveries, plus interest. The C&C POR Rate is dependent on the target C&C dollars associated with the Company’s POR program (C&C POR target dollars) and an estimate of electric supply costs, therefore, the Company updates the C&C POR Rate of the POR Discount Percentage each year. The C&C POR target dollars for each rate year were established by the Commission in its rate order for the Company’s electric business. At the end of each rate year, the Company reconciles the C&C recoveries attributable to retail access customers whose ESCOs participate in the Company’s POR program to the C&C POR target dollars set pursuant to the 2017 Rate Order. Lastly, the Incremental Cost, which is designed to recover the administrative cost of the POR program, is set at 0.15 percent. The sum of these four components is the POR Discount Percentage.
The PSC noted that, "Currently any variations from the C&C POR target dollars and revenue collected is credited or surcharged to full service and retail access customers through the Transition Adjustment, even though some C&C related costs are being paid by ESCOs through the C&C POR Rate component of the POR Discount Percentage."
In ConEd's most recent gas rate case, a group of ESCOs had sought to change the POR reconciliation mechanism such that reconciled amounts would instead be returned to, or collected from, ESCOs, as they are the entities from whom the discount rate is applied to their receivables.
The PSC in its order stated, "Since ESCOs incur the POR related C&C costs, it is appropriate that any reconciliation of C&C recoveries attributable to retail access customers whose ESCOs participate in the Company’s POR program be collected or credited to ESCOs through the subsequent year’s C&C rate component. Appropriately reconciling C&C recoveries attributable to retail access customers whose ESCOs participate in the Company’s POR program will also benefit full service customers should the actual revenues collected from ESCOs through the C&C portion of the POR Discount Percentage fall short of the target POR C&C dollars in any given rate year, as these customers would be charged for any shortfall. In addition, such a change is permissible under the 2017 Rate Order, as it is a revenue neutral change."
Under the adopted tariff amendments, effective January 1, 2019, C&C recoveries attributable to retail access customers whose ESCOs participate in the Company’s POR program would be reconciled to C&C POR target dollars through the C&C component of the Company’s POR Discount Percentage.
The Company will expand General Rule 19.3.6, Consolidated Billing and Payment Processing Services, to include a description of the POR Discount Percentage by listing its four components, Uncollectible Bill Percentage, Risk Factor, C&C, and Incremental Cost. The Company will file a new statement with the Secretary to the Commission, Statement of Purchase of Receivables Discount Percentage, showing each component of the POR Discount Percentage, including the C&C Component which contains the POR C&C Reconciliation.
Con Edison will also revise General Rule 28, Transition Adjustment for Competitive Services, to reflect that, effective January 1, 2019, the POR C&C Reconciliation will be included in the C&C component of the POR Discount Percentage and no longer included in the Transition Adjustment. Lastly, reconciliation of competitive C&C supply-related charges reflected in the Merchant Function charge will be modified to specify that, effective January 1, 2019, it will apply only to full service customers.
"The proposed tariff amendments are in compliance with the Gas POR Order and will allow the Company to appropriately reconcile electric C&C recoveries attributable to retail access customers whose ESCOs participate in the Company’s POR program. Additionally, a more detailed description of each component of the Company’s electric POR Discount Percentage under General Rule 19.3.6 and the filing of a new statement for the POR Discount Percentage displaying each component by the Company will provide further clarity to customers. Therefore, the tariff amendments as contained in the Appendix are approved," the PSC said