D.C. PSC Orders Pepco to File Design for Purchase of Receivables

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The District of Columbia PSC yesterday ordered Pepco to submit a purchase of receivables implementation plan, "for the purpose of possibly implementing a POR program in [the] District of Columbia."

Among other things, Pepco was directed to submit a POR program design that, "is similar in design to the Maryland POR program," in place at Pepco.

As was first reported by Matters, the PSC opened a Notice if Inquiry into POR about a year ago in Formal Case 1085, and received two rounds of comments on the issue.

"The Commission agrees with Pepco's position as reflected in its Reply Comments, that POR programs are but one factor that may affect supplier competition. Another likely explanation for increased supplier competition is that decreased energy prices in the market have made suppliers' price offerings more competitive and thus more attractive to customers. The Commission believes that both factors contribute to increased supplier competition, as seems to be the case in Maryland. Therefore, we believe further inquiry into the establishment of a POR program is appropriate, particularly if such a program would have no negative impact on the ratepayer," the PSC said.

"Our review of Maryland's POR program appears to indicate no rate impact for Maryland ratepayers. However, we believe that further study of any possible rate impact of a District POR program is necessary before we decide upon implementation. We are particularly concerned with understanding how Pepco's experience in developing a POR program in Maryland can be helpful in establishing such a program in the District," the PSC said.

"We conclude that, based upon our research and the Maryland Commission's assessment of its POR program, sufficient reason exists to further consider an electricity POR program for Pepco in the District, so long as it does not increase rates. Therefore, the Commission directs Pepco to develop a proposal for POR implementation in the District that should include, at a minimum: (1) a detailed District-specific POR program plan that is similar in design to the Maryland POR program; (2) an estimate of POR program costs for the District; (3) a report assessing Pepco's Maryland POR program performance and impact, if any, on Maryland ratepayers; (4) an assessment of the impact upon the ratepayer of a District POR program; and (5) any changes to rules necessary for Pepco's implementation of the POR. Where differences exist between the Maryland and District POR programs, Pepco should provide a detailed explanation for the difference," the PSC ordered.

Pepco shall provide its proposal within 60 days.

Although retail suppliers had sought to expand the PSC's consideration of POR to include natural gas, the Commission said, "we think it prudent at this time to take a cautious, step-by-step approach and direct only Pepco to submit a POR implementation plan for further consideration."

"Subsequently, we shall determine whether a District-specific natural gas program should also be subject to further study," the PSC said.