In Examining POR Changes, Regulator Issues New Questions For Comment, Asks Whether Maturity Of Market Means Need To Exempt Suppliers From Burden Of Arrearages Has Passed

June 16, 2020

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

In its investigation of potential changes to purchase of receivables (POR) for retail electric suppliers, the Connecticut Public Utilities Regulatory Authority has sought comment on whether market conditions have changed such that relieving suppliers from the burden of arrearages is no longer needed to support the previously "nascent" market

As exclusively first reported by EnergyChoiceMatters.com (details here), the Connecticut Public Utilities Regulatory Authority (Authority) is conducting a proceeding to review the costs and benefits of the current purchase of receivables (POR) method used by the electric distribution companies (EDCs).

PURA noted that Conn. Gen. Stat. § 16-244c(j) states, "Each electric distribution company shall offer to bill customers on behalf of participating electric suppliers and to pay such suppliers in a timely manner the amounts due such suppliers from customers for generation services, less a percentage of such amounts that reflects uncollectible bills and overdue payments as approved by the Public Utilities Regulatory Authority."

In its Decision dated October 10, 2007 in Docket No. 05-08-05RE02, the Authority implemented this statute by requiring the EDCs to create a "Bills Rendered" payment mechanism for POR, which requires the EDCs to pay suppliers based on bills rendered to customers less a percentage that reflects the EDCs’ uncollectible bills and overdue payments.

PURA noted that the statute, however, requires only that EDCs pay suppliers in a, "timely manner ... less a percentage ... that reflects uncollectible bills and overdue payments."

"In the intervening twelve years, the nascent supplier market has grown into a mature market, circumstances have changed, and uncollectibles have risen. This includes amounts paid to suppliers for uncollectible accounts that were charged supply rates in excess of standard service rates, causing the Authority to question whether the existing 'Bills Rendered' payment mechanism continues to be appropriate, and what alternative options are available," PURA said

In new questions issued for comment, PURA noted that the existing POR program was originally established to support a "nascent" market and to exempt suppliers from the burden of arrearages.

PURA sought comment on the following:

a. Discuss whether market conditions have changed and whether changed market conditions justify the revision of existing POR policies and mechanisms.

b. Discuss whether the current POR policies and mechanisms can be modified within the borders of Conn. Gen. Stat. § 16-244c(j) to address or mitigate, in full or in part, any changed market conditions noted in response to Question (a).

c. Discuss whether it is necessary and appropriate to examine and amend Conn. Gen. Stat. § 16-244c(j) and the existing POR payment mechanism currently in place. If yes, please describe a proposal for amending § 16-244c(j) that may improve the status quo for all ratepayers. If not, please explain why the current system is adequate and does not place added costs on all ratepayers.

As previously reported (see story here), an earlier round of questions had sought comment on whether POR, for uncollectible accounts, should be limited to the equivalent shadow-billed default service receivables, or whether supplier-specific discount rates should be used

Docket 20-01-33

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