Pennsylvania Confirms Continuation of Current PPL POR Discount Rates, Pending New Data

A written order from the Pennsylvania PUC confirms that the current purchase of receivables discount rates at PPL will remain in effect until the PUC acts upon a revised discount rate filing to separate competitive supply versus default service uncollectibles, which has not yet been filed.

The PUC had previously addressed the POR discount rates at PPL in a binding poll on PPL's rate case, but the poll did not explicitly provide the discount rates to be in place.

In the written order, the PUC affirms an ALJ's recommendation to delay the implementation of PPL's proposed increase in the POR discount percentage for 90 days. PPL had sought to increase the residential POR discount to 2.23%, from 1.85% (see prior story)

The currently effective discount rates shall remain in effect until PPL provides a required breakdown of uncollectible expenses between shopping and non-shopping customers. "Once this information is developed, the Commission will have thirty additional days to finalize an appropriate course of action," the PUC said.

"[I]f PPL fails to provide this information, then the currently effective discount rates shall remain unchanged," the PUC said.

The PUC noted that PPL did not track the incremental expenses of POR under the 0.05% administrative cost component of the POR discount rate. "We find it disappointing that PPL did not track these costs," the PUC said.

However, while retail suppliers sought a refund of costs recovered under the administrative charge, given the lack of tracked costs, the PUC noted that the tariff does not provide for any such refund, and declined to order a refund at this time.

"In order to avoid a repetition of this failure, the Parties should address the issue in future proceedings so as to provide a more equitable outcome," the PUC said.

"Going forward, we direct PPL to track and make an appropriate filing with the Commission describing all revenues and incremental costs incurred to develop, implement, and administer the POR service, including costs since inception, associated with implementation of its POR service if it desires to seek any further administrative cost recovery in the future. If, at that time, it is determined that PPL over-recovered historical administrative costs, future cost recovery will only be allowed once the historical over-recovery is netted out," the PUC said.

The PUC's order also denies a request from retail suppliers to use revenues from late payment fees to offset the POR discount rates.

"We agree with PPL that late payment charges are actually paid by customers and are used to reduce the overall distribution of revenue requirement for customer rate classes that bear the working capital requirement associated with overdue accounts receivable," the PUC said.

Additionally, the PUC denied a request from retail suppliers to include both competitive supply and default service uncollectibles in base rates, similar to the treatment at several other EDCs.

"[T]he use of a non-bypassable charge [for supply-related uncollectibles] is improper and has previously been rejected in PPL's prior 2010 base rate proceeding. In that Order we held that the collection risk for shopping customers should remain with the EGSs," the PUC said.

Docket: R-2012-2290597