Finally: Purchase of Receivables Coming to Two Mass. Utilities Within 3 Months (6 Months at Nstar)

Business is about to pick up in the Massachusetts small volume electricity market.

That's because the Massachusetts DPU has ordered National Grid and Western Massachusetts Electric Co. to implement purchase of receivables programs within three months of a March 28 order.

Nstar was ordered to implement POR within six months, as the DPU denied Nstar's requested eight-month implementation timeline.

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Apart from ordering a six-month implementation period at Nstar, the DPU approved the utilities' most recent compliance tariffs to implement POR.

These compliance filings had included the following POR uncollectible discounts for going forward (non-existing) receivables:

National Grid
Residential:       1.98%
Commercial:        0.83%
Industrial:        0.18%

Nstar
Residential:       1.47%
Small C&I:         0.45%
Large C&I:         0.13%

WMECO
Residential:       2.13%
Commercial:        0.26%
Industrial:        0.03%
Other:             0.04%

These discount rates were filed prior to March 15. Generally, the POR terms and conditions require each utility to submit a POR filing on March 15th of each year that will include the calculation of the discount rates to be effective on May 1st of that year. It was unclear if the initial discount rates above, calculated prior to March 15, will be updated or reflect the uncollectibles listed above.

Discount rates will also include: (1) the administrative costs incurred by the company in implementing the POR program; and (2) the reconciliation of projected and actual uncollectible expenses experienced during the previous year (after the initial year). The utilities did not recently file updated percentages for the initial administrative discounts.

The DPU did not address POR at Fitchburg Gas & Electric (Unitil), as Unitil is in the process of replacing its customer information system. Unitil has also said that it has reached general agreement with suppliers on implementing POR prior to the new CIS going live in 2015.

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