Maryland Staff Again Recommend 70% Cut in Filed POR Discount Rate for Washington Gas Light

Staff of the Maryland PSC have recommended that the Commission adopt a four-year amortization of IT implementation costs related to Washington Gas Light purchase of receivables, which results in the updated discount rate for residential receivables being cut by 70% versus the filed updated rate.

Staff had made an earlier recommendation for a four-year amortization of IT implementation costs, but such recommendation was based on higher costs which have since been revised (see prior story regarding revised costs)

Staff has maintained its recommendation for a four-year amortization, however. Under the newly filed costs, Staff's recommendation results in a total POR discount, to be effective with the January 2013 billing cycle, as follows:

Residential: 1.55%

Non-residential: 0.02%

For comparison, Staff's earlier recommended discount rates were:

Residential: 2.02%

Non-residential: 0.03%

Additionally, WGL's tariff currently calls for two-year amortization, and based on this language the filed updated POR rates were:

Residential: 5.57%

Non-residential: 0.13%

Staff's latest recommendation, for the residential discount, reflects a 70% decrease from these filed rates.

"The full four-year amortization period lowers the residential discount rate to 1.55%. This lower rate will encourage more supplier participation in the WGL Maryland service territory. The Company has informed Staff that it is amenable to this proposal. Staff supports this longer amortization period for IT implementation costs," Staff said.

Consistent with its prior recommendation, Staff would not apply late payment revenues received by WGL as a POR discount offset, since this issue is currently being studied by a working group.