Utilities Propose New Purchase Of Receivables Programs, Discount Rates
January 11, 2023 Email This Story Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
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The New Hampshire investor-owned electric utilities have proposed new purchase of receivables programs, in response to recent state law and PUC rulemaking
All of the utilities would offer POR to governmental aggregations (including those acting as their own supplier) as well as non-aggregation retail suppliers
None of the EDCs have yet filed proposed new supplier agreements or tariffs. While EDCs generally described their proposals as "offering" POR, other language states that suppliers using utility consolidated billing will need to sign a revised agreement concerning consolidated billing and POR (but such revisions were not yet available). None of the EDCs specifically addressed whether POR would be "all-in or all-out".
All of the descriptions below reflect the EDCs' proposals, which remain subject to PUC approval. Discount rates are generally illustrative based on current data, and may change by implementation date
Public Service Of New Hampshire
Public Service Company of New Hampshire proposes to offer the POR Program to all competitive suppliers
that have selected utility consolidated billing.
PSNH is proposing a discount rate comprised of an uncollectibles factor as
determined by PSNH's trailing, two-year uncollectibles expense as a
percentage of customer revenue over the same timeframe, and the annual amortized
portion of the incremental capital expense for IT infrastructure modifications
needed to accommodate POR as a percentage of supplier billings. An administrative cost component, set as $0, is included as a placeholder, but no administrative costs are currently expected
It appears that PSNH is proposing a single discount rate applicable to all customer classes, but its testimony appears to contain an error on this issue:
PSNH's testimony states:
Q. Is the Company proposing the same discount rate for all customer classes?
A. No. [sic] The Company did not consider proposing discount rates that differ by class
due to the need to implement POR in two very different billing systems. Due to
the need to accommodate two different systems, the Company determined that the
potential benefits would be outweighed by the additional costs associated with the
necessary system upgrades for facilitating multiple discount rates.
PSNH's attachment demonstrating its POR calculation appears to show only a single discount rate
PSNH's POR discount rate, using 2020 and 2021 uncollectible data, is:
PSNH POR Discount Factors, Illustrative:
Admin Costs: [placeholder, none currently expected]
Total Discount: 0.01066 [i.e. 1.066%]
PSNH estimates an eight-month process to implement POR
following Commission approval of the POR Program
Granite State Electric
Granite State Electric (Liberty Utilities, or GSE) proposes to offer the POR program to all Competitive Suppliers that
choose Consolidated Billing service from GSE.
Notably, Granite State Electric said that it intends to differentiate
between Competitive Suppliers serving municipal aggregations and all other Competitive
Suppliers using a separate identifier in the GSE's billing system, though Granite State Electric did not further address this intention (e.g. in terms of different discount rates, rules, etc).
Granite State Electric proposes that class-specific POR discounts (DPRs, discount percentage rate) be set for the classes used in its default service -- the Small and Large customer groups.
However, for the first DPR, GSE is
proposing the same rate for both classes until uncollectible and other data can be collected for each class to be
able to perform a class-specific DPR calculation
Granite State Electric Illustrative POR Discounts:
Customer Group: Small Large
Uncollectible (UP) 0.261% 0.261%
Administrative Cost (ACP) 1.281% 1.281%
Past Period Reconciliation (PPRP) 0.0% 0.0%
Total Discount DPR 1.542% 1.542%
GSE proposes to purchase all existing receivables upon implementation of the
POR program utilizing a single discount percentage rate.
The amounts purchased for the existing receivables shall be subject to full reconciliation
through the PPRP.
GSE estimates a six-month period to fully implement
and test POR after a Commission order is issued
Unitil proposes to offer the POR Program to all Competitive Suppliers that
choose Consolidated Billing service from the Company
Unitil proposes class-specific DPRs (discounts) for two class groupings: (1) the
Residential Service Class; and (2) the General Service Class
Unitil's DPR is comprised of three elements: the Uncollectible
Percentage (UP), the Administrative Cost Percentage (ACP) and the Past Period
Reconciliation Percentage (PPRP).
During the first year of the POR Program, the UP is calculated as the uncollectible
expense for the applicable customer class based on actual data for Default Service
Customers, divided by the total amounts billed by the Company for Default Service
Supply, including late payment fees if included in uncollectible expenses.
Unitil's proposed initial (illustrative) discount rates are as follows:
Unitil Initial POR Discounts, Illustrative:
UP 0.94% 0.26%
ACP 0.02% 0.02%
PPRP 0.01% 0.04%
Total (DPR) 0.97% 0.32%
Unitil proposes to purchase all existing receivables upon implementation of
the POR Program utilizing the initial DPRs for the Residential and General customer
classes. The amounts purchased for the existing receivables will be subject to full
reconciliation through the PPRP.
Unitil expects four months is required for POR implementation
New Hampshire Electric Cooperative
Citing staffing and technical issues, New Hampshire Electric Cooperative, Inc. sought a waiver of the requirement to file a POR plan at this time. NHEC did not seek a specific amount of time during which the waiver would be in effect, but proposed to file an update on any continued need for the waiver within 60 days. NHEC said that it expects to require at least three more months to develop a POR proposal