OPC Asks PSC To "Revisit" Decision Allowing POR In Light of Polar Vortex

The Maryland Office of People's Counsel has asked the Maryland PSC to "revisit" its decision authorizing purchase of receivables in light of the polar vortex.

OPC's comments came in RM54, a proceeding regarding supplier marketing rules.

"Given the events of the 2013-2014 winter with regard to variable rates, one major reason for opposition [to POR] is particularly relevant. As it now stands, all competitive suppliers, whatever the merits of their business model or sufficiency of their contracting practices, are guaranteed to be 'debt-free' when it comes to their customers. Ultimately it is utility customers who provide a guaranteed revenue stream for companies, whether their actions are 'consumer friendly,' in violation of Maryland law and regulations, or reflect bad business practices. In the case of extremely high variable rates charged to customers by suppliers, the utilities purchased those receivables; utility customers ultimately may become responsible for costs related to arrearages and bad debt connected to those very high rates. These high rates are a result of supplier business decisions and practices, good or bad. If a utility engaged in imprudent decisions, utility customers at least would have the ability to challenge recovery of costs. In the case of supplier POR, residential customers have no such opportunity and are held responsible for the cost consequences. This is not a level playing field," OPC said.

"Furthermore, energy assistance, in the form of arrearage assistance, has been provided to low-income customers as part of EUSP, and from the Fuel Fund and other government and private donors, to cover these much higher bills; these resources are stretched thin. This does not benefit utility customers," OPC said

"Given recent events, OPC recommends that the Commission revisit its decision to adopt the POR regulations. In the meantime, or as an alternative to the existing regulations, OPC recommends that (a) the utilities should only be allowed to purchase the receivables in an amount equivalent to the SOS rate or supplier rate, whichever is lower, and (b) the utilities should be prohibited from terminating service for supplier charges in excess of the SOS rate," the OPC said.