Purchase of Receivables Finds Support from AEP Ohio

AEP Ohio has recommended implementation of a form of purchase of receivables, in comments filed in Ohio's retail electric market investigation.

"AEP Ohio also suggests, as further described below, that the Commission consider adopting a competitive market improvement relating to uncollectible/credit risks: to incorporate within the SSO structure for all EDUs a non-bypassable bad debt rider to cover uncollected revenue for both shopping and non-shopping customers."

"The improvement proposed by AEP Ohio would promote competition while mitigating financial risks for both CRES Providers and EDUs. And this improvement does not require additional legislation or disturb pre-existing rate plans," AEP Ohio said.

"It would be more equitable to require that all customers share in absorbing the bad debt risk associated with shopping, which would also eliminate the remaining portion of bad debt risk that CRES Providers have. Some EDUs already have bad debt riders, but AEP Ohio does not. Thus, AEP Ohio requests that the Commission pursue a uniform approach for EDUs to adopt non-bypassable bad debt riders - both for shopping and non-shopping customers," AEP Ohio said.