Regulator Approves 50% Increase In Utility's Residential POR Discount Rate (More Than 1 Percentage Point)

The Massachusetts DPU approved the calculation and filing of revised Standard Complete Billing Percentages (purchase of receivables [POR] discount rates) by Fitchburg Gas and Electric d/b/a Unitil, effective December 1, 2019

The approved new residential POR discount rate of 3.38% is over 50% higher than the current rate of 2.25%

The approved new Small/Regular General Service POR discount rate is 0.71%, versus the current negative discount of (0.48%).

Fitchburg Gas and Electric's approved new Standard Complete Billing Percentages, effective December 1, 2019, are as follows:

New SCBPs, 12/1/19

Residential
Uncollectible       3.41%
Reconciliation     -0.03%
Total               3.38%



Small/Regular General Service
Uncollectible       0.19%
Reconciliation      0.52%
Total               0.71%

Fitchburg Gas and Electric noted that, per a prior DPU order, "the Company made an adjustment of $325,000 to normalize the amount of write-offs used to calculate the proposed UP [Uncollectible Percentage] for effect December 1, 2018. In 2017, the Company delayed recording write-offs while implementing a new billing system in July, resulting in a lower level of write-offs. The Company adjusted the UP by the estimated write-off amount that would have occurred in 2017 in order to provide a better estimated rate and avoid a large undercollection in the reconciliation for December 1, 2018 through November 30, 2019. The adjustment has been reversed out of 2018 actual data in this filing. For Schedule 3, the actual (unadjusted) 2018 write-off percentage was used for determining the Prior Period Reconciliation Percentage."

The DPU approved the adjustment, stating, "The Department also finds reasonable the Company’s proposal to adjust the UP by $325,000 to account for write-off recording delays associated with the implementation of the Company’s new billing system. Therefore, the Department approves the Company’s SCBPs set forth above for effect December 1, 2019."

For comparison, Fitchburg Gas and Electric's current Standard Complete Billing Percentages are as follows:

Current SCBPs 

Residential
Uncollectible       4.00%
Reconciliation     -1.75%
Total               2.25%



Small/Regular General Service
Uncollectible       0.66%
Reconciliation     -1.14%
Total              -0.48%

Docket 19-POR-04