Maryland PSC Sets Discount Rates for BGE Electric, Gas Purchase of Receivables

The Maryland PSC has adopted revised Purchase of Receivables discount rates for electric and natural gas service at Baltimore Gas & Electric.

The PSC adopted Staff's recommended new discount rates listed below, effective July 13, 2011:

Electric

Gas

Specifically, the PSC adopted Staff's recommendation to set the discount rate at 0% for any rate category which otherwise would have had a negative discount rate (see 7/11), and also held that interest paid on reconciliations under the discount rate shall be paid at the rate used for customer deposits, rather than BGE's authorized rate of return.

The PSC rejected arguments from Washington Gas Energy Services that amounts over-collected under POR during the initial year (and which resulted in the negative discount rate absent setting the rate at 0%) should be refunded to suppliers at this time, rather than held to address future costs of POR.

Chairman Douglas Nazarian said that it would be "hard to swallow" paying suppliers for using POR, as would occur under the negative discount rates, especially as Nazarian said that suppliers have presumably already recovered their costs of POR from customers in retail rates.

The PSC was also hesitant to address any structural changes to the POR program based on one year's worth of experience, and did not wish to refund any over-collections to suppliers in the large customer classes since such experience may not be repeated in the future. The Commission noted that any over-collections will be addressed in the next year's reconciliation.

	Residential	Type I	Type II	Hourly
Prior Discount Rate	0.6249%	0.3674%	0.2173%	0.0507%
New Discount Rate	0.8234%	1.4218%	0.0000%	0.0000%

	Residential	General Service
Prior Discount Rate	2.40%	0.98%
New Discount Rate	2.3962%	0.0000%