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In the District of Columbia, the utilities (Pepco and Washington Gas and Light (WGL) filed additional responses to the PSC’s Staff data requests in the inquiry concerning the utilities POR discount rates.

As reported previously, WGL Energy’s on September 26, 2025, filed initial comments to the Notice of Inquiry (NOI) to Question b: “Should the POR Discount Rate calculation be modified? 

More specifically in Question b: PSC Staff asked, “Should the POR Discount Rate calculation be modified? If yes, explain how it should be modified for Residential, Small Commercial, and Large Commercial Customers, and why?” In its Reply Comments, WGL Energy stated that:

“A more equitable solution would establish discount rates based on the utility’s overall experience with uncollectible accounts from a specific supplier, while implementing true-up mechanisms that adjust payments based on the actual collection performance of each supplier’s customer base. This approach would create appropriate incentives for suppliers to maintain high-quality customer portfolios while ensuring collection costs are allocated to the parties who directly cause them. Suppliers with consistently higher-than-average uncollectible rates would face additional charges through the true-up process, while suppliers demonstrating superior customer management would receive credits. Additionally, to have an effective POR program, third-party suppliers require better visibility into customer payments made directly to the utility, how those payments are distributed, and the age and amount of utility and supplier debts. This is essential so that suppliers can monitor customer arrears, send collection notices, and reconnect customers to utility service.”

As a follow-up discovery question, Staff asked, “Please indicate whether WGL would be able to implement WGL Energy’s recommended approach described above by the next annual discount rate application, reflecting POR discount rates that are based on supplier-specific uncollectible rates.

WGL’s most recent response as to whether supplier specific POR rates are feasible:

1. “It is difficult to answer this question given the high-level description of WGL Energy’s proposed approach to the purchase of receivables. Having said that, given the anticipated work between the utilities and competitive service providers to implement a new approach, and the IT changes that would need to be made, Washington Gas does not believe it is possible to implement WGL Energy’s recommended approach before the next annual discount rate application, which is due in April 2026. 

Further, given the lack of specifics in WGL Energy’s proposed approach, Washington Gas is unable to agree to this proposed change at this time.”

“The Company is unable to provide a cost estimate or a timeline for implementing WGL Energy’s proposed changes because the proposal lacks the details necessary to provide such estimates.”

Similar Pessimism was Voiced in Pepco’s Response: 

“Pepco would not be able to implement WGL Energy’s recommended approach by the next annual discount rate application to reflect POR discount rates that are based on supplier-specific uncollectible rates. At present, Pepco tracks and records uncollectible amounts on an aggregate basis rather than at the individual supplier level. 

(e) Currently, Pepco does not track supplier uncollectibles or late payment revenues at the individual supplier level; these costs are recorded in aggregate. Where supplier-level data exists, it relates only to POR revenues and discounts. The current system applies discount rates at the customer class level (Residential, Small Commercial, Large Commercial) rather than at the individual supplier level. As of Calendar Year 2025, Pepco has approximately 45 unique suppliers serving these classes. Moving to supplier-specific discount rates would increase complexity significantly, potentially requiring over 120 unique discount rates compared to the current three.”

Implementing supplier-specific tracking for uncollectibles and late payment revenues, along with the capability to apply supplier-specific discount rates, would require substantial system changes. These include expanding or creating discount tables to incorporate supplier codes, modifying payment creation programs to query rates by supplier, and maintaining records for every supplier and rate category. Additional changes would be needed for late payment charge processing, including system configuration updates and billing program modifications, which would apply across all suppliers (including all other jurisdictions served by Pepco Holdings Inc., outside of the District of Columbia), and bill redesign for the Third-Party Supplier section on customer bills. This process would also require ongoing maintenance as new suppliers enter the market. 

From a reporting perspective, the following steps are required: In-depth requirement analysis, development of a new report by the IT team, extraction of new data between two separate systems, and final automation through data analytics. 

From a discount rate filing perspective, rates are currently updated annually and subject to Commission approval before rates are effective. Transitioning to an individual supplier-based discount rate, would require frequent filings when new suppliers enter the market, which would add additional administrative burden on the Regulatory teams.

In summary, while technically feasible, this change involves significant development effort, increased complexity and administrative burdens, extended timelines (conservatively 9–10 months end-to-end), and ongoing maintenance. There are several elements of the system update that require detailed analysis and business requirements to determine scope and associated costs. These assessments are complex and may require several weeks to complete. Consequently, Pepco cannot provide cost estimates until the requirements are fully defined. 

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WGL 2nd Response   (01/06/2026)
Pepco Response (01/06/2026)
PEPPOR-2025-01 (03/17/2025)
(Purchase of Receivables – Pepco)
WGPOR-2025-01
(Purchase of Receivables – Washington Gas)