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Pepco Responds to RESA’s POR Discount Rate Calculation Comments
Pepco filed comments to the District of Columbia Public Service Commission regarding RESA’s comments on the Purchase of Receivables (POR) discount rate calculation.
In comments, RESA has raised the issue of whether the Commission should move to a two-year reset of the discount rate instead of annual filings. Pepco disagrees and does not recommend a two-year reset of the discount rate and believes that annual filings are “critical under current market conditions.”
RESA noted in comments. “that Pepco proposes to use late payment revenues to cover costs incurred in administering the POR program and pursuing past due and uncollectible balances (as opposed to using the late payment revenues to reduce uncollectible balances). Alternatively, Pepco proposes an administrative adder to cover its internal labor for “[b]illing, invoicing, and collections processing, customer education expenses, incremental system costs, and regulatory filing costs.”
Pepco states that it “respectfully supports that an administrative adder is an appropriate and transparent mechanism for recovering the POR administrative costs, while preserving the Commission’s longstanding requirement that the POR program operate as a self-contained construct.”
In its comments regarding Individual Supplier Discount Rates, RESA “recommends that the Commission direct the utilities, with stakeholder input via a technical conference, to design a POR program with specific supplier discount rates, including the system changes needed to implement the program, a timeline, and estimated costs.”
Pepco noted that, “the existing discount methodology, under which discount rates are calculated and applied by customer class, supports administrative and billing efficiency. This structure minimizes system complexity while ensuring consistent and transparent application of POR discounts across customer classes. Absent a demonstrated operational or customer benefit that outweighs the costs and risks identified above, Pepco continues to support the current class based discount approach.”
