Retail Suppliers Offer Proposal to Improve Payment Hierarchy at N.H. Utilities

Retail electric suppliers have offered proposals to expeditiously improve the payment hierarchy for utility consolidated billing at the New Hampshire utilities.

According to the suppliers, the current payment hierarchy in the Public Service Company of New Hampshire and New Hampshire Electric Cooperative territories is distribution arrears first, then distribution current charges, then supplier arrears, then supplier current charges. Suppliers said that there may be additional charges that have higher or lower spots in a utility's hierarchy -- such as a provision that customer deposits are repaid first -- but the relative order of distribution and supplier charges are as set forth above.

Suppliers said that the current payment hierarchy at Granite State Electric is distribution arrears first, then supplier arrears, then distribution current charges, then supplier current charges.

At Unitil, the suppliers said that the payment hierarchy is, by tariff, similar to PSNH, but in practice, Unitil is paying the oldest outstanding accounts receivable first and then paying the next oldest accounts receivable after the oldest is entirely paid; and if multiple tariff components have the same receivable aging, the payment will be applied proportionally, allocating distribution and supplier arrears and current payments on a pro rata basis.

The suppliers said that they, "would prefer to resolve the current payment hierarchy problem expeditiously by settlement, without the delays and costs of a full proceeding."

In consideration of settlement, the suppliers said that they would accept and support (to the extent necessary) formalizing the payment allocation policies in place at Granite State Electric and Unitil.

With respect to PSNH and NHEC, the suppliers, "would be flexible as to the approach chosen by the utility so long as it either adopts the pro rata allocation (implemented by Unitil and by WMECo in Massachusetts) or modifies the payment hierarchy such that at least one of the supplier charge categories (arrears and current) is ahead of at least one of the Distribution charge categories (arrears and current)."

"Most notably, the improved hierarchy or assurance of pro rata payment would result in payment of all or virtually all of Supplier receivables within a month or at most two of incurrence. Supplier incentives to make payment status calls to customers would be significantly reduced and may be eliminated in many cases. Distribution companies and Suppliers also would more equitably bear the risks associated with customer nonpayment or partial payments on their consolidated electricity bills," the suppliers said.

Docket No. IR 13-244