Utility Files To Set 0% Purchase Of Receivables (POR) Discount Rate

Utility Seeks POR Calculation Change To Cease Using Late Payment Revenues As POR Uncollectibles Offset

April 16, 2020

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Copyright 2010-20 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Pepco in the District of Columbia has filed updated purchase of receivables discount rates, proposed to be effective June 1, 2020

For all customer classes, based on the latest calculations, Pepco proposes to set the POR discount at 0%. This does not represent a change for any customer class from the current POR discount rate

Specifically, proposed new POR discounts for Pepco (D.C.) are as follows, by SOS or market-priced service rate schedule:

Rate Class                  Current   June 1, 2020

Residential
R, MMA, Rider RAD           0.0000%   0.0000%

Small Commercial 
GS-LV ND, T, SL,
   TS, TN (SOS)             0.0000%   0.0000%

Large Commercial
GS-LV, GS 3A, GT LV, MGT LV,
   GT 3A, GT 3B, RT (SOS)   0.0000%   0.0000%

Market Priced
GSLV-ND, GS-LV, GS 3A, 
   GT LV, MGT LV, GT 3A, T, 
   SL, TS                   0.0000%   0.0000%

For all classes, the 0% discounts reflect the "zeroing-out" of negative discount rates that otherwise result from the discount rate calculation

Pepco has proposed a change to the POR discount rate calculation to remove late payment fee revenue as an offset to uncollectibles effective June 1, 2021

"It is Pepco’s position that late fees should not be used to reduce the Discount Rate of the POR program. The Company is therefore proposing to exclude Late Payment Fees from the POR discount calculation effective June 1, 2021," Pepco said

"Allowing late payment fees by third party customers to be credited to third party suppliers, who are not incurring late payment fees or collection cost, constitutes an unjustified bonus for suppliers. Suppliers are not obligated to pass the reductions in the discount rate along to customers, rather it is at the expense of Pepco’s customers for reasons set forth below," Pepco said

"The Company will use these late payments to lower the collection costs in distribution base rates so that all customers benefit from lower rates because of late payment fees. If these payments are continued to be credited to third party suppliers, all distribution customers are forgoing this benefit; distribution rates will increase the revenue requirement by the amount of this revenue given to third party suppliers," Pepco said

Docket PEPPOR

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