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Parties File Comments In Purchase Of Receivables Program
From Pepco’s Comments:
[ *** ] Pepco supports modifying the POR discount rate calculation to better reflect the actual costs of administering the program. The current calculation incorporates components such as write-offs, late payment revenues, interest, and reconciliation factors. These components are not arbitrary and are grounded in actual POR activity and financial data.
Pepco recommends excluding late payment revenues from the POR discount rate calculation. These revenues should be used to cover the costs Pepco incurs in pursuing past-due and uncollectible balances and should not be used to reduce the discount rates charged to suppliers.
Alternatively, if late payment revenues are retained in the calculation, Pepco recommends adding an administrative adder to more accurately reflect the costs associated with administering the program and collecting overdue balances. [ *** ]
Pepco should be afforded the opportunity to fully recover the costs associated with administering the POR program. The current discount rate structure is designed to reflect actual program costs, and it must remain flexible to account for both under-collections and overcollections. Pepco has no control over the agreements established between suppliers and their customers. Therefore, Pepco should not be precluded from recovering costs that are passed on to Pepco by suppliers. If under-collections occur, either existing or in the future, Pepco should be permitted to adjust the discount rate to ensure appropriate cost recovery and to accurately reflect the risk profile for the given customer segment. Conversely, in the event of over-collections, Pepco should be allowed to reduce the discount rate, including setting it to zero if warranted, so that suppliers receive the full value of their receivables.
Any cumulative over-collections would be applied to offset future under-collections, maintaining a fair and transparent approach to managing program costs over time. [ *** ]
As the Commission evaluates the future of the POR program, it is important to consider the broader structural issues that have contributed to current challenges. Pepco supports a comprehensive approach that goes beyond temporary fixes and ensures long-term program integrity.
Any under-collected balances should be recoverable by Pepco, and any over-collected balances should be returned to suppliers. These adjustments are essential to maintaining fairness and transparency in the program’s financial operations. Additionally, uncollectible costs may continue to accrue for several months—potentially up to seven months—following the end of the program. This extended timeline must be factored into any final reconciliation process to ensure that all outstanding obligations are accounted for appropriately.
Additionally, Pepco recommends the Commission to consider requesting increased transparency from retail suppliers around rate offerings and pricing structures. A lack of visibility into supplier pricing and customer risk profiles has contributed to elevated levels of write-offs and uncollectibles, particularly in the residential segment. Enhanced transparency would allow for more accurate assessments of supplier practices and customer affordability and could inform future adjustments to the POR framework. This consideration is especially relevant as the Commission evaluates whether the current structure adequately reflects the financial risks borne by the utility and whether suppliers are appropriately accountable for their enrollment practices and customer management.
Pepco encourages continued dialogue among stakeholders to address the root causes of rising uncollectibles and to explore solutions that strengthen supplier accountability and customer protections. A thoughtful and collaborative approach will help ensure that any changes to the POR framework are both equitable and sustainable. [ *** ]
From RESA’s Comments:
[ *** ] The Commission’s POR programs have delivered benefits to DC consumers in the form of greater options by enabling a more competitive retail market. The residential discount rate methodology would benefit from a review of current practices and an evaluation of improvements that can restore stability.
RESA respectfully urges the Commission to:
- Preserve POR as a necessary component of retail energy competition;
2. Convene a Working Group to identify best practices and recommend durable solutions, and to present proposals to resolve the anomalous residential POR discount rates tied to COVID-era uncollectibles;
3. Maintain non-residential POR in its current form. [ *** ]
From Washington Gas Light Comments:
[ *** ] Washington Gas does not believe it is the appropriate stakeholder to address the question whether the POR program is still necessary to encourage utility competition in the District. [ *** ]
Washington Gas believes the POR discount rate calculation is appropriate as it is currently conducted, with the exception of netting late fees against bad debt expense. [ *** ]
If the Commission is inclined to continue with the POR program, it could consider lengthening the period over which the Company recovers its current under-collection. Approximately 45% of the total proposed discount rate is related to prior period underrecoveries. If uncollectables remain steady or decline, lengthening the period over which the current under-recovery is paid, the proposed discount rate could be somewhat mitigated. However, if uncollectable rates climb or there are fewer billed commodity sales than anticipated, lengthening the period over which the under-collection is paid may serve to exacerbate the problem. [ *** ]
Washington Gas does not believe the Commission should change the POR discount rate mid-year. [ *** ]
Pepco’s Comments (09/02/2025)
RESA’s Comments (09/02/2025)
WGL’s Comments (09/02/2025)
PEPPOR-2025-01 (03/17/2025)
(Purchase of Receivables)
