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Utility Considers Two Mechanisms To Collect Proposed Administrative Adder For Purchase of Receivables Program
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During a District of Columbia PSC technical conference concerning the consideration of adding an administrative adder to the purchase of receivables program in D.C., Pepco reported that it has considered two mechanisms for the collection of administrative costs which would be recovered under the proposal
The administrative adder had been first proposed by Pepco during the PSC's POR review (see background here)
Pepco reported that the utility has evaluated two potential mechanisms for collection of the admin. adder. Pepco is not currently advocating for any specific approach, but offered the potential mechanisms for discussion
One potential cost recovery mechanism evaluated by Pepco, to recover the costs of administering the POR program, would be a per-bill fee charged to retail suppliers
A second potential cost recovery mechanism would be a percentage of supplier receivables fee [i.e. an adder to the POR discount rate(s)]
Pepco generally noted benefits and drawbacks to each approach.
A per-bill fee provides more stability and predictability in cost recovery, but may represent a proportionally larger cost burden for suppliers with smaller customer bases.
In contrast, including the admin. adder as part of the discount rate is comparatively less linked to actual administrative costs which generally do not vary with the dollar amount of the receivables, but are rather driven in greater part by the amount of transactions (bills) and other support needed for the POR program
Stakeholders also discussed what costs would be recovered via the administrative adder, with Pepco generally proposing that any costs which are incremental to Pepco's non-POR activities should be included in the POR administrative costs to be recovered via the POR program. As such, the admin. adder would recover, for example, labor costs for Pepco representatives to attend POR-related meetings, such as the technical conference.
Pepco confirmed that Pepco has not produced an estimate of the total administrative costs to be recovered. While Pepco in a prior filing had cited a figure of $48,500 for POR admin. costs (an estimate for 2024), this amount only included internal labor, and did not include any billing system costs which Pepco may seek to recover via the admin. adder
As previously reported by ECM, the PSC, in a separate technical conference process, is also considering other discount rate changes, such as implementing a limited amount of tiers for the discount rate based on the arrearages of a supplier's customers (rather than transitioning to a specific discount rate for each individual supplier). See more background on tiered discount rates in DC here
Costs to implement tiered or similar multiple discount rates could potentially be recovered in the admin. adder, with some suppliers expressing concern about the two concepts (admin. cost recovery and discount tier implementation) not being discussed simultaneously given their interaction.
Cases PEPPOR-2026-01, WGPOR-2026-01
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July 23, 2026
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Copyright 2026 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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