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Utility Seeks 8% Purchase Of Receivables Discount Rate
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Pepco in Maryland has proposed an 8% residential purchase of receivables (POR) discount rate as part of winding down POR for residential customers
Residential POR in Maryland will end December 31, 2025
Pepco proposed that, to mitigate potential under-recovered balances under residential POR due to its termination, the residential POR discount should be set at 8.0768% effective July 1, 2025 through December 31, 2025
In Maryland, Pepco's current residential POR discount is 2.6710%
Similar to a recent proposal by BGE, Pepco's 8% discount rate proposal departs from the established POR discount calculation, and includes forecasted uncollectible expenses through December 2026, to reflect potential write-offs related to receivables purchased prior to December 31, 2025, but which do not become uncollectible until after the end-date of POR, based on Pepco's write-off timeline. The 8% discount reflects a forecast of late payment revenues only through December 2025
Pepco said of its proposal, "First, this
recommendation mitigates the size of any eventual true-up for uncollectible expense after
December 31, 2025. Second, including the forecasted costs in the POR discount rates now best
assigns the eventual uncollectible expense to the appropriate retail suppliers."
Similar to BGE, Pepco proposed to socialize any under-recovery under residential POR among all residential suppliers
Pepco said, "Following December 31, 2025, Pepco recommends that there be a final reconciliation
performed in two parts: (1) an initial reconciliation could be performed following December 2025
between the forecasted amounts included in the updated POR discount rates and the actual amounts
seen, with a recommended timing of a filing by March 31, 2026, and (2) a last, final reconciliation
could be performed and filed following the 12-month period ending December 2026, with a
recommended filing date of January 31, 2027. Pepco is recommending the last reconciliation be
filed with enough time following the end of Residential POR as of December 31, 2025, so that the
uncollectible process followed by the Company can be expected to largely be completed for the
purchased receivables."
"Pepco also recommends that any retail supplier who served residential customers in 2025 (i.e. Pepco purchased residential receivables from the retail supplier during that
period) would be included in the final reconciliations. Amounts to be refunded or charged to retail
suppliers in these final reconciliations would be socialized based upon each retail supplier’s
relative share of the residential receivables purchased over the entirety of calendar year 2025. This
treatment is reasonable as it balances identification of suppliers who should bear the uncollectible
expense associated with the accounts receivable written off," Pepco said
Pepco's proposed updates to the POR discounts for all classes are as follows (the non-residential classes follow the customary rate calculation)
Delmarva also filed updates to its Maryland POR discounts, proposing to set the residential discount in the same manner as Pepco, with Delmarva also proposing socialization of any residential POR balance at program end similar to Pepco
Delmarva's proposed residential POR discount under this adjustment is 6.2589% effective July 1, 2025, versus the current 2.1739%
Delmarva's proposed updates to the POR discounts for all classes are as follows (the non-residential classes follow the customary rate calculation)
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May 9, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
Pepco-MD
Current 7/1/25
Discount Discount
Residential 2.6710% 8.0768%
Type I 0.0000% 0.6868%
Type II 0.0000% 0.0000%
Hourly 0.0000% 0.0000%
Delmarva-MD
Current 7/1/25
Discount Discount
Residential 2.1739% 6.2589%
Type I 0.0000% 0.0000%
Type II 0.0000% 0.0000%
Hourly 0.0000% 0.0000%
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