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In Order No. 27,049 Approving Settlement Agreement , the New Hampshire Commission approves the parties’ settlement agreement regarding Public Service Company of New Hampshire d/b/a Eversource Energy (Eversource 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 has approved the design of a purchase of receivables program at Public Service of New Hampshire (PSNH or Eversource) which generally follows the precedent that the PUC recently established in adopting POR program designs at Granite State Electric and Unitil.

The PUC approved design parameters for POR, but final adoption and implementation of the POR program is reserved to a second phase of the proceeding which will address conforming changes to PNSH’s tariffs and supplier agreements.

The PSNH POR program is to be open to retail electric suppliers in addition to municipal aggregations.

Under the PUC’s order, PSNH is to purchase retail supplier receivables billed through utility consolidated billing. Participation in POR will be mandatory for supply charges billed under UCB.

A discount rate will apply to the purchased receivables.

The PSNH POR discount rate will reflect uncollectibles, administrative costs, PSNH’s incremental capital expense, and a reconciliation component.

A unique discount rate will be developed for the residential group, and a separate unique discount rate will be developed for the non-residential group.

As it did at the state’s other two electric utilities, the PUC did reject a date of May 1 as the annual update date for the POR discount rates. As before, the PUC said that a May 1 date does not provide enough time for a review of annual discount rate filings which will be made on March 1. The annual POR discount update shall instead take effect August 1, unless otherwise ordered by the PUC.  Therefore, the start date for POR at PSNH will be determined by the second phase of the proceeding. 

Excerpts from the Settlement Agreement:
{***} 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 residential service class; and non-residential service class. Id. at Section II(B) and (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. The sum of the net write-offs for Supplier Service billed by the Company through consolidated billing service for each customer classification, based on actual data for the most recent calendar year, divided by the total amounts, including late payment fees if included in net write-offs, for Supplier Service billed to that customer classification by the Company through consolidated billing service during the same period. 

2) Administrative Cost Percentage. The total forecasted incremental costs of POR program administration and collection to be recovered through the DPR for the subsequent year divided by the total amounts billed for Supplier Service by the Company through consolidated billing service for the most recent calendar year. The costs will be apportioned to each customer classification based on the total supplier kWh billings for such customer classification.

3) Amortized Incremental Capital Expense. The Company’s cumulative revenue requirement calculation for the return of and return on incremental capital 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 through the annual DPR over a five-year period. 

4) Past period reconciliation percentage. The sum of monthly Actual Uncollectible Costs less monthly Actual Supplier Discounts Applied; plus Monthly Interest Accrued; all 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 POR program have been completed, tested and fully operational. See Id., Section II(E). Furthermore, the parties agreed that implementation of the POR was conditioned on the amended Tariff terms and conditions the 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. {***}