Maryland PSC Updates Allegheny POR Discount Rates

The Maryland PSC has established updated Purchase of Receivables discount rates for Allegheny Power.

Although no formal order has yet been issued, based on discussions at the administrative meeting, the discount rates shall be as follows:

Allegheny POR Discount Rates, Effective June 1, 2011

These rates are based on Staff's recommended programming and administrative charges, which Allegheny said it agreed with and were accepted by the Commission. The uncollectible rates are based on Allegheny's updated proposal, and do not include any offset to the rates based on late fee revenues, in contrast to Staff's recommendation.

The Commission declined Staff's recommendation to offset uncollectibles with late fees revenue, since Allegheny had not been collecting late fees on the supplier portion of consolidated bills, due to programming limitations. Allegheny said it did not provide this functionality immediately with the start of POR due to the expenses associated with updating its system to apply late fees to supplier billings, and the fact that this upgrade would be made superfluous once the FirstEnergy integration was completed. Allegheny noted that the expenses associated with upgrading its billing system with respect to late fees would have been added to the programming discount rate.

In making its decision, Commissioners stressed that the decision to not offset uncollectible rates with late fee revenues was due to the unique situation at Allegheny where no late fee revenues had been collected. The Commission said that it was not establishing any precedent on the issue of late fee offsets in POR discount rates. The PSC encouraged Staff to continue to raise the issue of late fee offsets to discount rates in the other utilities' POR cases, where such revenues have actually been collected.