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PSC Sets Technical Conference To Consider Adoption Of Multi-Tier Purchase Of Receivables Discount Rate (PSC Previously Endorsed Use Of Multiple Discount Rates To Be Based On Each Retail Supplier's Own Uncollectibles)
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The District of Columbia PSC has scheduled for October 1, 2026 a virtual technical conference to consider the feasibility of adopting a tiered
discount rate under the Pepco-DC and Washington Gas Light-DC Purchase of Receivables (POR) programs, in order to address the "disparity" in customer payment default rates among retail suppliers
As first reported by EnergyChoiceMatters.com, the DC PSC in a prior POR order had generally embraced the use of multiple discount rates for residential POR, to be based on the uncollectibles of a retail supplier's customers, though the PSC did not adopt a final policy in such prior order, and instead directed consideration in a technical conference and related process
The PSC previously said that implementing a tiered approach to POR discounts, with multiple tiers, would address concerns about implementation costs while also addressing suppliers whose customers have excessively high uncollectibles which are socialized among other POR customers (and, if unrecovered under POR, potentially SOS customers)
The PSC had specifically directed PSC Staff to investigate creation of 3 POR discount tiers: a top-tier, a middle-tier, and a bottom-tier.
Under the prior order, the technical conference discussions shall include, but are not limited to:
(1) What are the challenges to implementing a multi-tiered discount rate?
(2) What changes are necessary to Pepco and WGL’s billing system in order to implement a multi-tiered discount rate?
(3) What are the cost implications for implementing a multi-tiered discount rate?
(4) What is the optimal number of tiers under a multi-tier framework?
(5) What is the timeline for implementation of the multi-tiered discount rate?
(6) What is the nature and frequency of reports that Pepco and WGL should provide?
The PSC previously reported that, among retail suppliers with residential customers, the retail supplier with the lowest customer arrearage rate was approximately 20 times lower than that of the retail suppliers with the highest arrearage rate, "which underscores the need for a multi-tiered rate structure."
"[T]he Commission generally agrees ... that the discount rate should be designed to capture the default rate disparity between suppliers," the PSC previously said
"The Commission believes that a higher discount rate for certain third-party suppliers can encourage more equitable practices, thereby reducing the likelihood of default," the PSC previously said
Consideration of a tiered
discount rate mechanism is among the changes that the PSC is reviewing under a broader investigation of the POR programs, which also includes, in a separate track (which has already commenced), consideration of adding an administrative adder to the POR discount rate
See more background on the POR investigation in ECM's story here
The PSC is also accepting written comments on the use of a multi-tiered POR discount rate for POR, with comments due not later than Wednesday, September 30, 2026.
Dockets PEPPOR-2026-01, WGPOR-2026-01
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September 15, 2026
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Copyright 2026 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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