UGI Utilities to Start Purchase of Receivables Program on December 1

UGI Utilities. Inc. - Gas Division will commence its Purchase of Receivables program on December 1, 2011 (P-2009-2145498).

The POR program, approved by the PUC in August 2010 (see 8/19/10), was expected to be implemented within 18-22 months of such order, contingent on billing system modifications, and is thus ahead of the anticipated start date.

The POR program is limited to UGI Utilities - Gas Division and does not include UGI Central Penn or UGI Penn Natural Gas.

According to UGI's tariff posted on its website, UGI shall pay the choice supplier, for purchased customer receivables, an amount equal to 97.67% of residential amounts billed (inclusive of associated sales taxes) and 99.50% of non-residential amounts billed (also inclusive of taxes).

These reflect the discount rates from the PUC's August order, which include a fixed administrative charge and an uncollectibles charge, with the uncollectibles charge mirroring the bypassable Merchant Function Charge for uncollectibles. Based on the MFC portion of the same tariff, there does not appear to have been any change in the MFC necessitating a change in the POR discount rates.

The POR program covers customers served under residential transportation rate schedule RT and under non-residential rate schedules NT and CT, except that non-residential customers on schedules NT and CT whose annual usage exceeds 1,000 Mcf per year are not eligible for POR.

A class-specific all-in requirement applies. In other words, when electing POR, the supplier must either elect POR for all RT accounts; elect POR for all CT and NT accounts; or elect POR for all RT, CT and NT accounts.

An exception to the all-in requirement is allowed for products bundling gas supply with carbon offsets, as such products do not meet the definition of "basic natural gas supply" and are thus ineligible for POR. Carbon offset products may still be billed using UGI consolidated billing, but such receivables will not be purchased by UGI.

Termination fees are excluded from purchased receivables under the definition of basic natural gas supply.