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MA DPU Declines NRG’s Request To Open POR Methodology Investigation And Instead Approves EDCs’ Substantial Increases In POR Rates
The Massachusetts DPU declined to open an investigation into the calculation of the electricity standard complete billing percentages (aka purchase of receivables discount rates), and approved updates to the POR discount rates at National Grid and Nstar, based on the existing methodology, which include significant increases in the discount rates.
Excerpts from the Orders:
Based on our review of current conditions, we do not find unique circumstances that would warrant an investigation as requested by the NRG Companies. Therefore, the Department denies NRG’s request to open an investigation into POR and the annual calculation of SCBPs.
The DPU said that the approved discount rates are within a historical normal range.
The DPU approved the new POR rates that are effect May 1, 2024
National Grid SCBPs
Previous New Approved
Residential 1.99% 2.99%
Commercial 2.63% 3.53%
Industrial 0.39% 0.35%
Nstar SCBPs (Applicable To All Territories)
Prior New Approved
Residential 0.86% 1.33%
Commercial 0.15% 0.26%
Industrial -0.15% -0.01%
As reported previously, the NRG Energy brands filed petitions seeking changes to the mechanisms related to the electricity standard complete billing percentages (SCBPs), or purchase of receivables (POR) discount rates in Massachusetts.
In response to the utilities filed petitions under existing mechanisms, the National Grid Purchase of Receivable (POR) discount rate for residential electric customers was proposed to increase to 2.99% from the current 1.99%, while Nstar’s POR discount for residential customers was proposed to increase to 1.33% from the current 0.86%.
Filing similar comments in respective proceedings regarding the EDC’s proposed discount rates, NRG said “As discussed below, the SCPBs proposed by NGRID represent a dramatic decrease in payments made to competitive retail suppliers with respect to their residential and commercial customers. As such, the Company’s proposal will create significant rate volatility in the market which will adversely impact municipal aggregation and competitive supply customers.”
“Consistent with the comments set out below, in the interests of affected customers, the NRG Retail Companies respectfully request that the Department consider and investigate alternative approaches to these types of annual changes in POR discount rates in this docket or a future POR docket.”
NRG urged the DPU to investigate alternative approaches to the annual changes in POR discount rates, “in order to mitigate volatility in the municipal aggregation and retail energy competition markets.”
NRG said that such alternatives may include, but need not be limited to:
Suppliers pay a consistent rate and NGRID and Eversource create a non-bypassable reconciliation charge to collect or refund variations over time.
Establish a bandwidth for year-over-year changes to the POR discount, with costs being deferred for percent changes outside of the band.
Order (04/30/2024)
Order (04/30/2024)
24-POR-01
Petition of National Grid for review and approval by the Department of Public Utilities of the Companies’ Standard Complete Billing Percentages for effect May 1, 2024, under the Companies’ Purchase of Receivables Program.
24-POR-02
Petition of NSTAR for review and approval by the Department of Public Utilities of the Companies’ Standard Complete Billing Percentages for effect May 1, 2024, under the Companies’ Purchase of Receivables Program.
