PSC Approves POR Implementation Plan For New POR Program, Sets Deadline for Start of POR Program

The District of Columbia PSC adopted an order approving an implementation plan for a new purchase of receivables program at Washington Gas Light

As previously reported, major design elements of the POR had already been adjudicated by the PSC (see details here)

The PSC had adopted seven components to be included in the WGL POR discount calculation: 1) bad debt expense; 2) implementation costs; 3) incremental collection costs; 4) cash working capital costs; 5) risk factor (set at 0% initially); 6) reconciliation factor; and 7) late payment revenues.

In addressing an implementation plan filed by WGL, the PSC noted that WGL’s stated bad debt rate of 1.795% will act as the default bad debt rate until the POR program is implemented and actual results have been collected to determine the true bad debt rate for each customer class. "At this point, the Company will perform an adjustment in the subsequent year to account for any differences between the default bad debt rate and the true bad debt rate," the PSC said

WGL said in its implementation plan that it expects that it will take seven to nine months to implement the program, counting from the date of a final Commission order approving the POR program.

WGL also estimated the total implementation cost at $689,000

"Based on its review, the Commission finds that when amortized over five years, the implementation costs should not increase the discount rate to a point where CSPs [suppliers] would be discouraged from participating in the program. We expect WGL to complete the implementation within this cost estimate. Any increase of the implementation cost over 5% of the estimate should be reported to the Commission within fifteen (15) days of learning of the increase, along with an explanation of the reasons for the increase," the PSC said

The PSC directed WGL to implement a POR program, "as soon as possible but no later than nine months from the date of this Order."

FC 1140