Duquesne Light May Increase POR Discount Rate Under New Default Service Plan

Duquesne Light may increase its purchase of receivables discount rate under its proposed default service plan for the period June 1, 2015 through May 31, 2017.

Click here for more details on Duquesne Light's default service plan, including procurement and Price to Compare info

The POR discount may increase due to costs of an enhanced Standard Offer customer referral program. Specifically, Duquesne Light proposes to offer a Standard Offer referral program that provides for enrollment of customers by a third-party vendor. Such a mechanism was not possible at the launch of the program due to backoffice limitations, but Duquesne Light said that it can now accommodate use of a third-party vendor for Standard Offer enrollments, which Duquesne Light said would bring its program in line with other Standard Offer programs in the state.

Duquesne Light said that enrollments under its Standard Offer program have lagged participation at other utilities, though we did not see specific data included in testimony supporting its petition.

The costs of using a third-party vendor for Standard Offer enrollments would increase costs of the program. Duquesne Light would first increase the per-customer enrollment fee charged to suppliers under the Standard Offer up to $30 to recover such increased costs (the fee is expected to be $10-15 as of September 2014).

However, to the extent the increased costs remain unrecovered under the per-customer enrollment fee, Duquesne Light proposes to recover 50% of the excess costs from the Purchase of Receivables discount and 50% of the excess costs from Residential and Small C&I default service customers.

For reference, Duquesne Light's current POR discount rates are as follows:

• Residential: 0.52% comprised of 0.42% for uncollectible expenses and 0.10% for ongoing operating and administrative expenses.

• Small C&I customers (<25 kW): 0.52% comprised of 0.42% for uncollectible expenses and 0.10% for ongoing operating and administrative expenses.

• Medium C&I customers (25 kW - 300 kW): 0.28% comprised of 0.18% for uncollectible expenses and 0.10% for ongoing operating and administrative expenses.