Utility To Issue One-Time Payment To Retail Suppliers In Lieu Of Negative POR Discount

Nstar has informed the Massachusetts DPU that, pending feedback from electric suppliers, it intends to issue a one-time payment to retail suppliers serving industrial customers to effectuate an over-collection under the purchase of receivables program, rather than addressing the reconciliation via a negative discount rate.

As only reported by EnergyChoiceMatters.com, the calculation to set Nstar's updated POR discount rate for the industrial class resulted in a discount rate of negative 0.03%

Nstar informed the DPU that the utility has identified billing issues that would arise if it attempted to modify its billing systems to charge a negative POR discount for suppliers serving industrial customers.

"Rather than undertake the expense and administrative burden of modifying the Company’s existing IT system to accommodate this negative rate, the Company has an alternative solution that will be less costly to suppliers that would otherwise be responsible for the incremental costs associated with this effort," Nstar said

Effective May 1, 2016, Nstar said that it will apply a POR discount of 0.07% to suppliers' purchased receivables related to industrial customers (reflecting the non-negative components of the new POR discount). This percentage will be in effect for 12 months

To address the negative POR discount rate component driving what would otherwise be the negative 0.03% POR discount, Nstar said that it intends to make a one-time payment to each impacted supplier serving industrial customers. Nstar said that it has notified affected suppliers of this implementation protocol. If, based on feedback from the suppliers, Nstar determines that a further alternative implementation protocol is necessary, it will notify the DPU.