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PSC Accepts 100-200% Increases In POR Discount Rates; Allows Socialization Among Suppliers For POR End Balances At Some Utilities; Defers Consideration Of Some Costs
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The Maryland PSC issued letter orders today approving 100-200% increases in purchase of receivables discount rates at several utilities, and addressed any reconciliations after the end of residential POR in a two-step process.
Initially, the PSC appears to accept each utility's proposal on how to deal with reconciliation balances which exist through the end of 2026, as the PSC states (with language varying slightly by utility, with exact language below) that it accepts the utility's, "method to collect any final residential under-recovery." Depending on utility, these reconciliations, which will be a charge or credit to retail suppliers, will either be supplier-specific based on each supplier's unique uncollectibles, or will be a socialization among suppliers based on residential receivables purchased by the utility in 2025
As more fully detailed below, generally, Potomac Edison and Washington Gas Light will address reconciliations on a supplier-specific basis, tracking each supplier's specific uncollectibles. BGE, Pepco, and Delmarva will generally socialize reconciliations, with the socialization based on the supplier's share of residential purchased receivables in 2025.
However, for "post-2026" uncollected POR residential balances, the PSC deferred a decision at each utility. Uncollectibles may still exist after 2026 related to residential POR, which will not be reflected in the "final" reconciliation at the end of 2026 which will be charged to suppliers as noted above, due to the time it takes for bills to become written off by the utilities.
Most utilities proposed to recover post-2026 under-recovered residential POR costs in a manner not charged to suppliers -- either recovery through a default service rate or a distribution rate
WGL specifically proposed that such post-2026 balances still be recovered from suppliers, but offered a proposal to the extent recovery from suppliers is not possible if suppliers exit the market
The specific POR discounts approved by the PSC are at the end of this story
With regards to reconciliations, the PSC's letter orders state as follows at each utility, with the utility's proposal also included for context:
Baltimore Gas and Electric - Electric
"The Commission accepts the BGE’s [sic] proposed reconciliation reporting process and method
to return or collect any final residential under or over-recovery. The Commission, however, defers
a decision regarding recovering post-2026 residential POR uncollectible costs through the
Standard Offer Service administration charge."
ECM note: BGE had proposed to socialize under-recovered POR costs among retail suppliers serving residential customers in 2025, based upon each retail supplier’s relative
share of the residential receivables purchased over the entirety of calendar year 2025. BGE had proposed to recover any post-2026 unrecovered costs through the SOS administrative charge
BGE had specifically stated: "Following December 31, 2025, BGE 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. BGE is
recommending the last reconciliation be filed with enough time following the end of
residential POR UCB 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. BGE
also recommends that any retail supplier who served residential customers in 2025 (i.e. BGE
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." BGE's proposal to recover any post-2026 unrecovered costs through the SOS administrative charge was made in a response to a PSC Staff data request
Baltimore Gas and Electric - Gas
"The Commission accepts the Company’s proposed reconciliation reporting process and method to return or collect any final residential under or over-recovery. The Commission, however, defers a decision regarding recovering post-2026 residential POR uncollectible costs through the Standard Offer Service administration charge [sic, this "SOS" text is from the letter order linked to the gas agenda item, but BGE's gas proposal had been through the GAC]."
ECM note: BGE had proposed to socialize under-recovered POR costs among retail suppliers serving residential customers in 2025, based upon each retail supplier’s relative
share of the residential receivables purchased over the entirety of calendar year 2025. BGE had proposed to recover any post-2026 unrecovered costs through the gas administrative charge (GAC)
BGE had specifically stated:
"Following December 31, 2025, BGE 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. BGE is
recommending the last reconciliation be filed with enough time following the end of
residential POR UCB 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. BGE
also recommends that any retail supplier who served gas residential customers in 2025 (i.e.
BGE 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 gas 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." BGE's proposal to recover any post-2026 unrecovered costs through the GAC was made in a response to a PSC Staff data request
Pepco
"The Commission also accepts the Company’s proposed reconciliation reporting process and method to return or collect any final residential under or over-recovery. The Commission directs the Company to file a revised supplier coordination tariff, as proposed by Staff, inclusive of the date on which the Residential POR rate ends. The Commission, however, defers a decision regarding recovery of any post-2026 uncollected POR residential balances through the SOS administration charge at this time."
ECM note: Pepco had proposed to socialize reconciliations among all retail suppliers serving residential customers in 2025, based on the supplier's share of purchased receivables during 2025. For residential POR uncollectible expenses incurred after 2026, Pepco had proposed to recover costs through the SOS administrative charge
Pepco had specifically proposed, "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." The proposal to use the SOS administrative charge for post-2026 POR costs was made in a response to a Staff data request
Delmarva
"The Commission also accepts the Company’s proposed reconciliation reporting process and method to return or collect any final residential under or over-recovery. The Commission directs the Company to file a revised supplier coordination tariff, as proposed by Staff, inclusive of the date on which the Residential POR rate ends. The Commission defers a decision regarding recovery of any post-2026 uncollected POR residential balances through the Standard Offer Service administration charge at this time."
ECM note: Delmarva had proposed to socialize reconciliations among all retail suppliers serving residential customers in 2025, based on the supplier's share of purchased receivables during 2025. For residential POR uncollectible expenses incurred after 2026, Delmarva (DPL) had proposed to recover costs through the SOS administrative charge
Delmarva had specifically proposed, "Following December 31, 2025, DPL 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." The proposal to use the SOS administrative charge for post-2026 POR costs was made in a response to a Staff data request
Potomac Edison
"The Commission accepts the Company’s proposed reconciliation reporting process and method to collect any final residential under-recovery. The Commission, however, defers a decision on under-recovery being recovered in a rate case at this time."
ECM note: PE had proposed to address reconciliations on a supplier-specific basis, based on such supplier's specific uncollectibles. PE proposed any remaining under-recovery be deferred for recovery in a future distribution base rate case
PE had specifically proposed: "If the Residential POR deferral balance moves into an under-recovered position during
2026, the Company would begin billing suppliers for their uncollectible expense since the
Company tracks it by supplier. PE would include the amounts owed by each supplier in its
informational filings to the Commission, as well as provide an update on invoice issuance and
collections. Should the Company have an under-recovered balance remaining on December 31,
2026, it requests authorization to establish a regulatory asset, which it would request recovery for
in its next distribution base rate case."
Washington Gas Light
"The Commission also accepts the Company’s proposed reconciliation reporting process, the Company’s proposal to directly bill suppliers for any outstanding residential POR costs following the Company’s final reconciliation filing in 2027, and the accompanying tariff revisions. The Commission defers a decision regarding recovery of any post-2026 uncollected POR residential balances through the residential Purchased Gas Charge."
ECM note: For reference, WGL had proposed supplier-specific reconciliations, with recovery ultimately through the default service rate if costs remain unrecovered. However, unlike at the other utilities, WGL did not propose any initial or interim reconciliation in early 2026, and only proposed a reconciliation to be filed by March 2027, with this reconciliation ultimately being conducted based on each supplier's unique, specifically tracked costs
WGL had specifically proposed as follows: "To the extent that there remains an uncollected POR balance as of the end of 2026, those
costs should be recovered through an adjustment to the residential customer purchased gas charge
('PGC'). The Company proposes to then bill CSPs [retail suppliers] for the balance that is placed into the residential
PGC based on outstanding supplier residential uncollectible costs and incremental collection cost
which the company will track by supplier. Any POR write-offs that are collected from CSPs would
then be credited back to residential customers through the PGC. The Company believes that
collection of these bills to CSPs may prove challenging if the CSP exits the Maryland market
entirely. Collection of these costs through the PGC is appropriate as a targeted method to recover
residential customer costs from residential customers, while also allowing the Company to
immediately credit costs recovered from CSPs back to the same residential customers."
The PSC approved the residential discount rates below. Utilities which are not listed already had their POR rates previously approved, as previously reported.
For Pepco and Delmarva, the letter orders direct the EDCs to file updated supplier coordination tariffs as recommended by PSC Staff. Thus, ECM reads the letter orders as incorporating all of Staff's recommended changes to the tariffs, including the Staff-recommended changes to the new discount rates and their effective dates, and not only language to be included in the tariffs concerning the end of residential POR which Staff had also proposed. The discount rates reported below reflect that any proposed changes from Staff concerning the discount rate or effective date were approved via the letter orders' language regarding the supplier coordination tariffs
Note: There was no opposition to the as-proposed non-residential POR discounts at each utility included in the chart above, which were approved without modification. These C&I discounts can be found in our prior stories.
Note, for BGE and PE, POR discount rates were previously approved, as reported in our prior stories
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June 13, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
Approved Residential POR Discounts
Pepco-MD
Current 6/6/25
Discount Discount
Residential 2.6710% 8.0768%
Delmarva-MD
Current 6/6/25
Discount Discount
Residential 2.1739% 6.1101%
WGL-MD
Current 6/27/25
Discount Discount
Residential 3.2418% 6.4698%
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