Utility Seeks Further Increase To Residential POR Discount Rate (Increase Now 70%, Total Discount Nears 3%)

Delmarva has filed with the Maryland PSC further revisions to its proposed updated purchase of receivables (POR) discount rates.

Delmarva said that the company has updated the write-off amounts used in the calculation for the Write-Offs as a percentage of Billed Revenues calculation. This results in an increase in the proposed residential discount versus an original filing

Originally, Delmarva had proposed to increase the residential POR discount from 1.7078% to 2.7103%, a 60% increase, effective July 1, 2018

Now, under the revisions, Delmarva proposes to increase the residential POR discount from 1.7078% to 2.9279%, a 71% increase, effective August 1, 2018

The updated Write-Offs did not affect non-residential POR discounts because under both the originally proposed and updated discounts, the calculations in both cases result in the discounts being negative and thus being set at 0% (the revised calculations do affect any accruing balance, however)

Delmarva also said that, after further discussions with Staff the Company has removed the RM54 costs from the calculation, deleted the detailed calculations of RM54 - Accelerated Suppler Switching Cost Component and changed the amortization period for RM54 costs from three to two years. However, while such changes do impact the underlying POR discount calculation, and any accrual, for the non-residential POR discounts (resulting in larger negative discount rates), because all of the non-residential POR discounts had already been proposed to be "zeroed out" and set at 0%, consistent with PSC precedent to not apply negative discount rates under POR, the removal of RM 54 costs does not affect the actual proposed POR discounts. For the residential discount rate, the RM54 costs included in Delmarva's original proposal had been 0% and thus the residential proposed discount was not affected by the RM 54 change

The newly proposed discount rates (as well as unaffected updates) are now proposed to take effect August 1, rather than July 1.

Delmarva's current and proposed total POR discount rates are below:

                       Original    New 
             Current   Proposal  Proposal
Residential   1.7078%   2.7103%   2.9279%
Type I        0.0000%   0.0000%   0.0000%
Type II       0.0000%   0.0000%   0.0000%
Hourly        0.0000%   0.0000%   0.0000%