Public Service Commission of the District of Columbia Issues Notice of Inquiry on Purchase of Receivables Program

Strategic Insights -

The Public Service Commission of the District of Columbia has initiated an inquiry into the adequacy of the Purchase of Receivables (POR) program, which facilitates payments between Potomac Electric Power Company (Pepco) or Washington Gas Light Company (WGL) and competitive suppliers. The Commission seeks comments from stakeholders on the best way to address issues facing the POR program, including modifying the POR Discount Rate calculation and directing Pepco or WGL to treat existing and future undercollections and over-collections.

Key Takeaways:

  • The POR program was introduced in 2013 for electricity suppliers and in 2019 for natural gas suppliers, and has incentivized the entrance of new retail suppliers into the utilities marketplace, increasing available options for consumers.
  • Prior to the POR program, in 2012, there were 13 active retail electricity suppliers, increasing to 18 in 2013 and 40 in 2018, and further to 45 in 2023 for residential customers. For gas suppliers, the number increased from 14 in 2019 to 20 in 2023.
  • From CY 2013 to CY 2023, Pepco's POR discount rate was 0.00% for all customer classes, while WGL's discount rate increased from 6.897% to 7.718% from CY 2023 to CY 2024.
  • Pepco had a cumulative undercollection of $4.2 Million for the Residential Customer Class in CY 2023, while WGL had a cumulative undercollection of $458,147 for the Residential Customer Class in CY 2023.
  • The Commission recognizes that the POR program's net imbalances impact the calculation of the POR Discount Rate and that increased electricity and natural gas commodity costs impact competitive suppliers' ability to compete with Pepco or WGL.
  • The Commission seeks comments from stakeholders on modifying the POR Discount Rate calculation, treating existing and future undercollections and over-collections, and changing the POR Discount Rate calculation when there is a change in the utility commodity cost.
  • The discontinuation of the POR program would likely affect retail suppliers and/or DC customers, and the Commission should consider additional factors when deciding about the future of the POR program.

Statistics:

  • 13 active retail electricity suppliers in 2012
  • 18 retail electricity suppliers in 2013
  • 40 retail electricity suppliers in 2018
  • 45 retail electricity suppliers in 2023 for residential customers
  • 14 gas suppliers in 2019
  • 20 gas suppliers in 2023
  • 0.00% for Pepco's POR discount rate for all customer classes from CY 2013 to CY 2023
  • 6.897% for WGL's discount rate in CY 2023
  • 7.718% for WGL's discount rate in CY 2024
  • $4.2 Million for Pepco's cumulative undercollection for the Residential Customer Class in CY 2023
  • $458,147 for WGL's cumulative undercollection for the Residential Customer Class in CY 2023
  • 30 days for filing comments on the NOI
  • 45 days for filing reply comments on the NOI

Sources:

  • PUBLIC SERVICE COMMISSION OF THE DISTRICT OF COLUMBIA 1325 G STREET, N.W., SUITE 800 WASHINGTON, D.C. 20005
  • Notice of Inquiry PEPPOR-2025-01, PEPCO PURCHASE OF RECEIVABLES; and WGPOR-2025-01, IN THE MATTER OF THE INVESTIGATION INTO THE ESTABLISHMENT OF A PURCHASE OF RECEIVABLES PROGRAM FOR NATURAL GAS SUPPLIERS AND THEIR CUSTOMERS IN THE DISTRICT OF COLUMBIA