Illinois Approves Purchase of Uncollectibles at ComEd

The Illinois Commerce Commission has approved Commonwealth Edison's tariffs to implement Purchase of Uncollectibles, and will allow ComEd to charge retail suppliers a fee for start-up and administrative costs.

ComEd's Purchase of Uncollectibles rider (Rider POU) will allow alternative retail suppliers to have ComEd purchase up to two monthly billing periods worth of the supplier's uncollectible receivables for the electric power and energy supply service provided to customers with demands under 400 kW (see 5/19 for more).

For an account to be eligible for Purchase of Uncollectibles, the supplier must submit a drop request for the relevant customer, and have conducted reasonable collection efforts. The total number of accounts eligible for POU will be capped, as discussed below.

The central dispute in the docket was whether to impose ComEd's sought $29.18 per account charge for POU service, for start-up and administrative costs.

The ICC noted that ComEd has not made any attempt to present evidence indicating that this amount reflects the costs at issue, which are its start-up and administrative costs. "In fact, according to [ComEd witness] Mr. Garcia, ComEd does not anticipate incurring any start-up costs. Also, according to Mr. Garcia, ComEd expects a 'low-volume' use of Rider POU. We further note that Ameren anticipated no incremental (costs incurred for only this program) costs. Therefore, it seems highly unlikely that this $29.18 charge actually represents the costs at issue," the ICC said.

However, the ICC noted that if no charge were authorized, if any start-up or administrative costs materialized, then they would be borne by all ratepayers.

"[T]he general policy of cost-causation, and general fairness, would establish that ratepayers should not bear the cost of this program," the ICC said.

"Therefore, at this time, some minimal charge should be imposed," the ICC said, establishing the Purchase of Uncollectibles administrative fee as $5 per account.

Aside from the $5 fee, purchased uncollectibles will be discounted based on ComEd's historic bad debt rate (2.95% at the time of the initial filing).

Participation by suppliers in ComEd's POU program is limited to 500 customer accounts annually (up to 1,000 monthly billing periods), with an additional limitation of 125 customer accounts quarterly (e.g., up to 250 monthly billing periods). ComEd has agreed to annually re-evaluate this limitation on the number of POU receivable accounts that it is required to purchase.