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PSC Requires Utilities To Report Data On Customer Uncollectibles Related To Specific Retail Suppliers Under POR Program
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The District of Columbia PSC has issued data requests to Pepco and Washington Gas Light concerning the PSC's investigation into the purchase of receivables programs, with the interrogatories including a direction for the utilities to report on each retail supplier's number of residential customers served under POR, and the number of such customers in arrears for each supplier
See background on the PSC's investigation of the POR programs here
As previously reported, the investigation is prompted, in part, by excessive uncollectible under-collection balances in the POR programs, which have resulted in residential POR discounts of 11% at Pepco and nearly 8% at WGL
The PSC asked the utilities several questions in response to previously reported comments that the utilities had filed concerning the POR programs.
For example, WGL had suggested that the PSC, if wishing to maintain POR, could consider
lengthening the period over which WGL recovers its current under-collection. WGL had noted that about 50% of the most recent calculated POR increase had related to reconciliation of prior bad debt under-collections, observing that, if uncollectibles remain steady or decline, lengthening the period over which
the current under-recovery is paid would mitigate the discount rate increase. However, WGL also noted that, if uncollectibles increase going forward, a longer period for reconciliation may exacerbate the problem
Citing WGL's observations, the PSC asked WGL to respond to the following:
(a) Please provide an illustrative example using actual data that shows the step-by-step calculation of a multi-year amortization approach, showing the discount rate,
the uncollectible balances, the annual amortization amount and the compensation
for carrying costs.
(b) What does WGL propose would be a reasonable carrying costs for uncollected
balance if the amortization approach is adopted by the Commission?
(c) Over what period of time does WGL propose for the amortization?
(d) If the uncollectible rate does not decrease or increases from its current level,
would WGL continue to recommend amortization of the uncollectible balance?
While Pepco did not itself propose a longer amortization for the current POR reconciliation balances, Pepco in reply comments said that it did not oppose such a longer recovery period. However, Pepco said that, "Pepco emphasizes that any extended recovery timeline must include appropriate
compensation for carrying costs because currently, Pepco is only compensated for
unrecovered balance within each specific year, with interest calculation resetting
annually."
The PSC directed Pepco to provide responses to the same amortization questions posed to WGL listed immediately above (updated to reflect Pepco)
Pepco had recommended excluding late payment fee revenues from the POR discount rate
calculation, with such revenues instead used to cover the costs that Pepco incurs in pursuing past-due
and uncollectible balances
In response to this proposal, the PSC directed Pepco to respond to the following:
a. Please provide an illustrative example of how exclusion of the late payment revenues from
the discount rate calculation would work, using CY 2023 POR data from Pepco's 2024 POR
filing.
b.
(i) Please explain and confirm whether Pepco’s proposal to exclude late payments
revenues from the discount rate would result in suppliers paying for the risk of
uncollectible at the front-end as compared to the back-end when the uncollectibles
are carried forward to future periods.
(ii) If not, please explain how increasing the discount rate by eliminating late payment
revenues (which would increase supplier upfront costs) and then applying the same
late payments to the uncollectible balance (which would reduce future discount
rates) helps improve the POR program.
c.
(i) Please confirm whether Pepco’s proposal includes tracking the excluded late
payments to ensure that they are used to reduce uncollectibles balances on a dollar for dollar basis.
(ii) If not, please clarify Pepco’s proposal regarding how the late payments would be
applied to the uncollectible balances going forward and how the reconciliation
would work.
Pepco had alternatively proposed that, if late payment fees remain as an offset in the POR discount rate calculation, then the PSC should institute an administrative adder to, "more accurately reflect the costs associated with
administering the program and collecting overdue balances".
The PSC directed Pepco to provide an itemized list describing the administrative costs that Pepco envisions
should be included in the POR administrative adder under Pepco's alternative proposal. The PSC directed Pepco to quantify on an incremental basis (for the POR program) the cost associated with each
of the items listed in response to this data request
Both utilities were directed to file, for Residential POR customers, a list of retail suppliers
enrolled in the POR program and, broken out by each supplier, the following: 1) the number of Residential POR customers and
2) the number of Residential POR customers with uncollectable accounts for each supplier for CY 2024, CY 2023 and CY 2022.
Both utilities were also directed to file, for Non-Residential POR customers, a list of retail suppliers
enrolled in the POR program and, broken out by each supplier, the following: 1) the number of Non-Residential POR customers and
2) the number of Non-Residential POR customers with uncollectable accounts for each supplier for CY 2024, CY 2023 and CY 2022.
Cases PEPPOR-2025-01, WGPOR-2025-01
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November 20, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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