News Stories

From the Order
{***} The Commission previously issued Order No. 91220 in Case No. 9461, which requested comments from parties regarding the impacts of §§ 7-510(D)(4) and 7-604.2 (B)(4) on the implementation of supplier consolidated billing (“SCB”). This Order addresses the impacts of §§ 7-510(D)(4) and 7-604.2 (B)(4) on the remainder of retail choice programs.

Section 8 of SB 1 states that sections § 7-510(D) and 7-604.2 (B) “shall be construed to apply to all electricity supply agreements and gas supply agreements entered into or renewed on or after January 1, 2025.” At the Commission’s June 12, 2024, Administrative Meeting, a legal concern was raised that SB 1 may result in a POR prohibition only applying to residential retail choice accounts that were entered into or renewed after January 1, 2025, instead of applying to all residential retail choice accounts. To be clear, POR is a financial arrangement between retail suppliers and utilities, not retail suppliers and customers. Nevertheless, the Commission would benefit from legal briefing of whether the POR prohibition of SB 1 should apply to all residential retail choice accounts or only those residential retail choice accounts that have agreements entered into or renewed after January 1, 2025. Interested persons must provide briefs and other written comments by Friday, August 2, 2024. 

A legislative style hearing will be held at 1:00 PM on August 7, 2024, to address this issue.  [Emphasis added.] 

The Commission recognizes that the utilities need to commence preparing for some form of a residential POR prohibition as of January 1, 2025. To that end the Commission directs the following. First, all Maryland electric and gas utilities with retail choice in their service territories must respond to the technical questions provided in Appendix A to this Order. Second, the utilities must provide their compliance plans for the POR prohibition under two scenarios – one that assumes POR ends for all residential accounts as of January 1, 2025, and another that assumes POR ends only for residential accounts that entered into or renewed agreements on or after January 1, 2025. These compliance plans must address the following: 

1. The specific mechanism the utility proposes to use. If the utility’s proposed mechanism is not pro-rata per COMAR 20.53.05.06 and 20.59.05.03, explain why; 
2. The timeline for the utility’s preferred method of implementation, including any need for temporary measures; and
3. Key milestones and challenges to implementing the proposed method.

As previously reported, the Maryland PSC has initiated a proceeding, PC 65, to address the prohibition on residential purchase of receivables (POR) under SB 1, and one of the PSC’s questions in initiating the process may suggest that the PSC is entertaining a requirement that compels retail suppliers use dual billing on a temporary basis as utilities modify their systems to comply with SB 1.

“To be clear, POR is a financial arrangement between retail suppliers and utilities, not retail suppliers and customers.”  The PSC scheduled an August 7 hearing on this question.

The PSC further directed utilities to file compliance plans for a POR prohibition under two scenarios — one under which POR ends for all residential accounts as of January 1, 2025; and another under which POR ends only for residential accounts that entered into or renewed agreements on or after January 1, 2025.

The PSC also directed utilities to file compliance plans to implement the POR prohibition and to answer several questions including the following:

• “Provide technical guidance on implementing dual billing for residential retail supply customers on a temporary basis as a mechanism for compliance with the prohibition.”
• Timelines and list challenges and other information concerning implementation of the following alternative payment processes that would be used in place of residential POR under utility consolidated billing, applicable in instances in which the outstanding bill exceeds the customer’s payment.
• The specific mechanism the utility proposes to use for receivables in light of the POR prohibition. If the utility’s proposed mechanism is not the current pro-rata authorized as a POR alternative per COMAR 20.53.05.06 and 20.59.05.03, the utility is directed to explain why.
• The timeline for the utility’s preferred method of implementation, including any need for temporary measures.  Compliance plans are due August 9

PSC Staff was directed to convene stakeholders and, no later than September 13, 2024, to file the parties’ recommendations regarding acceptance or modifications to the utilities’ compliance plans. Staff by September 13 shall also recommend whether a rulemaking is needed to amend the current POR rules.

Note that use of a pro-rata allocation of customer payments as currently authorized under the rules as a utility-selected alternative to POR.

Use of the payment processing methodology in place before the POR rule was implemented, which generally allocated payments to various categories and ages, with no pro-ration, on a waterfall basis, with the first priority category being allocated all customer payments until such category’s charges were paid in full, with any remaining payment next allocated to the second-priority category, and so forth. Generally, this methodology included a preference for first paying past due and delivery charges.

The PSC noted the accelerated nature of its review and invited Staff to propose an alternative procedural schedule, though the PSC stressed that any modified schedule must account for the need to implement a residential POR prohibition no later than January 1, 2025.

Notice & Request For Comment  (Order No. 91238) (07/23/2024)
PC65 
Accounts Receivable Related to Residential Electric and Gas Supply – Senate Bill 1: Accounts Receivable Related to Residential Electric and Gas Supply)