Pa. PUC Approves POR at T. W. Phillips Gas, Upon Supplier Request

The Pennsylvania PUC approved a settlement in T. W. Phillips Gas and Oil Co.'s rate case under which T. W. Phillips will institute a Purchase of Receivables program upon the request of competitive suppliers (R-2010-2167797).

The settlement, adopted without modification, was first reported in Matters (9/24).

The adopted settlement calls for the POR program to be available three months after the first request from an active supplier to use POR. Currently, there are no participants in T. W. Phillips' choice program.

Receivables would be purchased at a discount rate equal to the unbundled uncollectibles percentage established in Merchant Function Charges, plus an administrative adder of 0.81%. The administrative adder would be reduced or eliminated upon the recovery of one-time costs to implement the POR program.

The residential (Rate RS/RUS) discount rate would be 2.71%, reflecting an uncollectibles percentage of 1.9% plus the administrative adder. The non-residential discount rate (Rate GSS) would be 1.24%, reflecting an uncollectibles percentage of 0.43% plus the administrative adder. The bypassable Merchant Function Charges for each rate class would equal the uncollectible percentages included in the POR discount rate. The Merchant Function Charges would be updated in future tariff base rate proceedings.

A supplier that elects the Single Bill Option (utility consolidated billing) for its customer accounts will be required to sell all its accounts receivable to T. W. Phillips. Furthermore, a supplier will be required to elect the Single Bill Option for its residential customer accounts, and will be required to sell all of its residential customer accounts receivable to T. W. Phillips.

T. W. Phillips will purchase only receivables associated with natural gas supply charges and no other services that may be provided by competitive suppliers. The natural gas supply charges eligible under the POR program will not include any charges associated with the following: termination fees; energy efficiency service or equipment; a nonrecurring charge billed by a supplier for calling the supplier's call center or negotiating a payment plan; security deposits charged by a supplier; other equipment or services provided by a supplier, such as heating equipment repairs or maintenance policies; or any charges associated with carbon based attributes, including value added green products such as carbon offsets.

Suppliers participating in POR must agree not to reject new customers based upon credit issues or payment histories, and may not require a separate security deposit.

The offering of the POR program by T. W. Phillips is voluntary, and T. W. Phillips at its discretion may decide to terminate the program

While voting to approve the settlement, Chairman James Cawley said that the provision allowing T. W. Phillips to terminate POR at its discretion at any time, without any specified minimum notice to suppliers, "does not provide the necessary certainty to optimally enhance natural gas supply competition in Pennsylvania."

"I sincerely hope that the Company will not exercise this right," Cawley said.