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Utility Says 12% POR Discount Needed To Clear Outstanding Costs Under Program's Closure
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A 12% residential purchase of receivables (POR) discount rate would be needed for Washington Gas Light in Maryland to recover all outstanding balances under its POR program prior to POR's termination for residential customers on January 1, 2025
WGL is recommending that the residential POR discount be set at 12.2% for the remainder of the year to reflect outstanding balances under POR. This reflects uncollectibles of 3.5%, up from 1.4073% in the current discount, and a reconciliation factor of 8.25%, up from 1.7171%
The current WGL residential POR discount in Maryland is 3.2418%
Having the 12.2% discount in place from September 2024 through the end of December 2024 is expected decrease the outstanding balance under residential POR to $93,327 from the current $861,173, using forecasted retail supplier sales. Using the existing discount rate would leave a balance of $657,133 at year-end
Washington Gas further told the Maryland PSC that further decisions from the PSC are needed before utilities can move forward with changes in light of the end of residential POR
As first reported by EnergyChoiceMatters.com, the PSC recently issued an order ending residential POR for both new and existing residential contracts effective January 1, 2025, though the order was unclear in certain respects (especially with regards to a stated "temporary allowance" for existing contracts), and the order did not address non-residential POR
The PSC had ordered stakeholders to confer in light of its ruling ending POR for new and existing residential contracts
WGL reported that, following the PSC's order, WGL met with PSC Staff, the Office of People's Counsel, other utilities, and retail suppliers to discuss necessary changes in light of the PSC's ruling
"Washington Gas proposes that no system changes can be made until decisions have been made -- and approved by the Commission -- on how to proceed," WGL said
"We do not believe it is possible for this to happen prior to January 1, 2025," WGL said
WGL reiterated its preference that, with the end of POR, a payment hierarchy be introduced, rather than a pro-ration of payments between supply and delivery charges as required under current rule if POR is not in place
WGL's proposed payment processing order would be the system in place prior to the POR/pro-rata rule being adopted: all utility arrearages would be paid first, then all supply arrearages, followed by all utility current charges, and then all supply current charges.
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Utility Says Further Decisions Required From PSC On Next Steps In Light Of Order Ending POR
August 30, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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