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“In this order, the Commission approves the parties’ settlement agreement regarding Liberty Utilities (Granite State Electric) Corp. d/b/a Liberty’s (Liberty or the Company) proposed Purchase of Receivables (POR) Program. This proceeding is continued to a second phase to consider the Company’s proposed revisions to its “Electric Supplier Services Master Agreement” (ESSMA) and “Electricity Delivery Service Tariff NHPUC No. 21” (Tariff).

The New Hampshire PUC generally approved the POR program as designed in a settlement among Granite State Electric and various parties.”

Excerpts from the Settlement:
{***} “The Settlement Agreement explains how the Company’s Program would work. All competitive electric power suppliers (CEPSs) and community power aggregations (CPAs) choosing consolidated billing1 would automatically be enrolled in the Program. Settlement Agreement, Section II(A). Enrolled CEPSs and CPAs (collectively, suppliers) would be required to sell their accounts receivable for all consolidated billing customers to the Company. Id. 

The Company would pay all participating suppliers the full amounts due for “supplier service” minus a DPR, which would be calculated separately for two customer classes: the Small and Large Customer Groups. Id. at Section II(B) and (C). However, for the first year of the Program, the Company would calculate a single DPR applicable to both customer classes. Id. at Section II(C). The Company would pay participating suppliers monthly using the same payment date for both customer classes. Id., Section II(D). Following the Program’s initial implementation period, the Company would submit an annual reconciliation filing with the Commission by March 1 each year for revised DPRs and a revised payment date effective May 1. Id., Section II(G).”

A formula for calculating the DPR is contained in Section II(I) of the Settlement Agreement. This formula would consider the following factors for each customer class: 

(1) Uncollectible Percentage, which is “the sum of the net write-offs for Supplier Service for the participating customer class, based on actual data for the recent calendar year, divided by the total amounts billed by the Company, including late payment fees if included in net write-offs, to that participating customer class for Supplier Service during the same period.” 

(2) Administrative Cost Percentage equal to “the total actual administrative costs and any forecasted incremental costs of POR program administration and collection to be recovered for the subsequent year divided by the total amounts billed for Supplier Service by the Company for the most recent calendar year. Administrative costs shall include the recovery of costs directly related to the development and implementation of changes to billing, information, and accounting systems required to implement the billing and payment procedures related to the POR program into the Company’s consolidated billing service, to be amortized and recovered over a five-year period;” and 

(3) a Past Period Reconciliation Percentage, which is the “[s]um of 12 months of Actual Uncollectible Costs less monthly Actual Supplier Discounts Applied, plus Monthly Interest Accrued divided by Actual Supplier Billings.” 

The parties agreed that the proceeding in this docket would be bifurcated. Id., Section II(H). The first phase of the proceeding would consist of the Commission’s review of the Settlement Agreement. See id. Assuming the Commission issued an order approving the Settlement Agreement, the Commission would review the Company’s proposed revisions to its ESSMA and Tariff in the second phase of the proceeding. See id. If the Commission issued an order approving the proposed revisions, the Company would implement the Program after it received executed revised ESSMAs. 

The parties agreed that the Company shall implement its POR program on the first day of the month following notice by the Company to the Commission that all system modifications necessary to implement the Program have been completed, tested, and fully operational. See id., Section II(E). Furthermore, the parties agreed that implementation of the Program was conditioned on the proposed amended Tariff terms and conditions and ESSMA provisions being finalized and approved. 

Following initial implementation of the Program, the Company shall make an annual filing with the Commission on or before March 1 of each year. See id., Section II(G). The annual filing shall provide the calculation of the DPRs, related reconciliation for prior periods and the payment date to be in effect for the forthcoming 12-month period, effective as of May 1. {***}

Excerpts from Commission Analysis:
{***} “After reviewing the Report, the Commission adopts the Hearing Examiner’s recommendation to bifurcate this proceeding and to approve those portions of the parties’ Settlement Agreement concerning when the Company would pay participating suppliers and how the Program would be subject to the Commission’s oversight, with the exception of the proposed May 1 effective date applicable to annual reconciliation filings.3 Additionally, the Commission adopts the Report’s determination that the Program’s inclusion of CEPSs as “participating suppliers” meets the public good standard contained in RSA 53-E:9, I. The remaining issue is whether the Company’s proposed DPR calculation contained in Section II(I) of the Settlement

Agreement complies with RSA 53-E:9, II. RSA 53-E:9, II provides that the DPR will be equal to a utility’s actual uncollectible rate with adjustments to recover certain types of costs that may arise from the POR program. The Report determined that the parties’ proposed DPR calculation did not comply with RSA 53-A:9, II because it did not expressly refer to working capital or a pro rata share of collection efforts costs, cost components specified in the statute. Report at 1, 5, 7-9. It stated that a POR program must include a proportional share of baseline collection efforts costs, not just incremental costs. Id. at 8-9. As interpreted in the Report, RSA 53-E:9, II would require all POR programs to provide for the recovery of these costs, including existing costs, unless they are shown to be unquantifiable.

We find that the result of the Settlement Agreement is just and reasonable and serves the public interest, because the Settlement Agreement establishes a POR program that will facilitate electric aggregation programs while recovering the Program’s costs from those using it. Other than the proposed May 1 effective date for reconciliation filings, we approve the Settlement Agreement in its entirety. Unless the Commission provides otherwise in a subsequent order, the effective date applicable to reconciliation filings is extended to August 1. 

The effective date of the initial POR program will be determined during the second phase of this proceeding. After its commencement of the initial DPR, the Company shall make an annual filing with the Commission on or before March 1 of each year following the initial implementation of the Program. Such filings shall include the calculations for the respective DPRs, the reconciliation for the prior period, documentation supporting all relevant calculations, and the payment date for the following 12-month period. 

This proceeding is continued to a second phase in which the Commission will review the Company’s proposed revisions to its ESSMA and Tariff. The Commission will commence this phase of the proceeding by issuing a supplemental order of notice.

The POR program at Granite State Electric is to be open to retail suppliers in addition to municipal aggregations and will be required to be used for any bills rendered under utility consolidated billing.

A unique discount rate will apply to the small customer group, and a separate unique discount rate will apply to the large customer group. However, in the first year of POR, a single discount rate will apply to allow the utility to collect further data on class-specific discount rates. {***}

Order Approving Settlement Agreement  (08/16/2024)
Examiner’s Report and Recommended Order  (12/23/2023)
DE 23-003
(Liberty’s Proposed Purchase of Receivables Program)