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Retail Supplier Says Some Suppliers Have 30% Arrears Rate; Seeks POR Changes To End "Subsidization" Of "High-Risk" Portfolios

October 1, 2026

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Copyright 2026 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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WGL Energy said in a presentation concerning a proposed tiered discount rate structure for the purchase of receivables programs in the District of Columbia that certain retail suppliers have an Arrears Rate above 30%

WGL Energy said that data from utility Washington Gas, "already demonstrates dramatically different customer payment performance by supplier (residential)."

WGL Energy included the following data of retail supplier Arrears Rates:

Data as reported by WGL Energy:

Supplier  Customers  Arrears   Arrears 
                     Accounts  Rate

Constellation   863     26     3.0%
WGL Energy    5,525    189     3.4%
MPower        4,097    964    23.5%
CleanSky        316    109    34.5%
SunSea        2,308    871    37.7%

WGL Energy said, "Current [POR] methodology creates no incentive to improve collections."

While WGL Energy recommended that there be no change to POR discount rates until utilities provide the payment transparency necessary to evaluate actual supplier-specific bad debt performance, WGL Energy said that such supplier-specific data could serve as the foundation for a future three-tier discount structure

In such case, WGL Energy proposed three tiers of arrears performance, which would then route a supplier into a specific tiered discount rate

WGL Energy's proposed tiers are

Tier 1 Arrears rate ≤ 5% -- Lowest discount

Tier 2 Arrears rate >5% to 15% -- Moderate discount

Tier 3 Arrears rate >15% -- Higher discount

For illustrative purposes only, WGL Energy said that an example tiered POR discount rate structure could reflect a discount rate of 2% to 3% for Tier 1 ("Best performers"), a discount rate of 4% to 6% for Tier 2 ("Average performers"), and a discount rate of 7% to 10% for Tier 3 ("High-risk portfolios")

"The discount rate should reflect actual bad debt experience, actual collection costs, and actual supplier performance -- high-performing suppliers should not subsidize high-risk portfolios," WGL Energy said

WGL Energy also said that utilities should provide supplier-specific data for:

• Customer payment history

• Aging buckets (30/60/90/120+)

• Write-off activity

• Payment allocation method

• Supplier bad-debt performance

• Arrearage trends

• Recovery performance

Without supplier-specific performance data, WGL Energy said

• Suppliers cannot manage risk.

• Suppliers cannot identify deteriorating portfolios.

• Regulators cannot determine which suppliers create POR losses.

To implement tiered POR discount rates, WGL Energy envisioned a 12-month timeline for the provision of the supplier-specific arrearage data by the utilities and a work group process, with implementation in year 2

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