PUC Sets Process To Move Implementation Of New Purchase of Receivables Program Forward

The Public Utilities Commission of Ohio, in a rehearing order on AEP Ohio's electric security plan, directed that a procedural process be developed to implement purchase of receivables at AEP Ohio.

As first reported by EnergyChoiceMatters.com, PUCO had adopted the implementation of POR at AEP Ohio in a February 2015 order, though it delegated design to a working group.

Consensus recommendations on POR program design were filed by Staff in November 2015, in Case No. 15-1507-EL-EDI (click here for details on recommended POR design)

Under the consensus recommendations, using 2014 data, the AEP Ohio POR discount rate by customer class would be 0.5% for residential receivables and "nearly 0%" for commercial and industrial receivables. The discount rates reflect the following components: bad debt, O&M costs, working capital risk, and a credit from base distribution rates.

In the 2015 report, Staff had cited a, "significant obstacle," to POR implementation: PUCO's prior directive that participation in the POR program by CRES providers that elect consolidated billing must not be mandatory

Citing AEP Ohio's responses, Staff had explained that the absence of an all-in requirement for POR greatly increases implementation costs. "Without an all in approach, AEP will be required to build and operate two processes for consolidated billing suppliers. One process is for POR participants and another for non-POR participants ... The result of these two systems is that implementation costs increased from an estimated $1.5 million to $3 or $4 million," Staff reported.

Moreover, the lack of an all-in approach to the POR increases the POR implementation time for AEP Ohio from 9 months to 2 years, Staff had said. The majority of the stakeholders support a "one system approach" (meaning an all-in requirement) to ensure a timely and workable POR program, Staff had said.

A non-consensus issue not resolved by the working group is whether purchased receivables will include only commodity charges

"In order to facilitate the Commission's review of the proposed POR implementation plan, we direct the attorney examiners to establish a procedural schedule by subsequent entry in that case [Case No. 15-1507-EL-EDI], seeking comments in response to the report filed by Staff, " PUCO ordered yesterday

PUCO denied rehearing of its prior direction that a POR program be created at AEP Ohio. PUCO also affirmed that the working group shall implement any design elements previously outlined by PUCO in its order, and said that the working group does not have discretion on these items.