The gas utilities submitted their proposed compliance plans to implement RM35. RM35 requires utilities offering utility consolidated billing to elect to either purchase supplier receivables or to prorate customer payments. In their compliance plans, BGE, Columbia and Chesapeake all proposed to purchase supplier receivables. WGL proposes to implement pro-ration of payments. BGE's POR discount rate is intended to recover "prudently incurred costs associated with the purchase of receivables, such as supplier uncollectible expenses, credit and collection expenses, operational costs incurred by BGE that are directly associated with COMAR 20.59, and a risk component of 1.25% that will be paid to BGE for retention by its shareholders to compensate BGE for the risk associated with the continuation of the supplier-customer relationship." Columbia's POR discount rate will reflect its: "1) commodity-related bad-debt collections; 2) program development and operations costs associated with COMAR provision implementation, including administrative and collection costs; and 3) the risk associated with the continuation of the supplier-customer relationship." Columbia will make a separate filing detailing the computation. Chesapeake proposed a 1% POR discount rate, to reflect the uncollectible expense in its last base rate case.

The utilities implementation dates for POR/pro-ration are proposed as follows: BGE - April 2010; Columbia - January 2011; Chesapeake - 2nd quarter of 2010; and WGL - mid-October 2010. The full texts of the BGE, Columbia, Chesapeake and WGL Compliance Filings are available on the NEM Website.

The Commission issued an Order on Allegheny's RM17 compliance plan, in particular, the offering of POR. The Commission rejected Allegheny's proposal to utilize a surcharge to collect POR program implementation and uncollectible costs from distribution customers finding that, "The Commission is not willing to impose the cost of implementing customer choice on ratepayers, especially in a manner that absolves suppliers of all cost and risk. The proposed surcharge methodology leaves suppliers with neither. Supplier should bear an appropriate share of the cost and risk of their business - risks already mitigated by the new regulatory requirement that the utilities purchase their receivables." Allegheny must propose a POR discount percentage that includes: "1) commodity-related bad debt collections; 2) program development and operations costs associated with COMAR provision implementation, including administrative and collection costs; and 3) the risk associated with the continuation of the supplier-customer relationship." The Commission approved Allegheny's proposed December 15, 2009, implementation date. The full text of the Order is available on the NEM Website.

This week a proposed settlement was filed with the Commission that would replace Columbia's current gas cost recovery mechanism with an auction approach to gas procurement. The settlement provides for a two-tiered auction process. First, a wholesale auction process will be used for two consecutive one-year periods commencing on April 1, 2010, that will determine a Standard Service Option for non-migrated customers. Beginning in the year 2012 a retail auction process will be utilized to set a Standard Choice Option (SCO) for non-migrated customers. As a result of the SCO auction, individual customers will be transferred to winning bidders. The settlement would also implement a uniform fee for firm balancing service to be applied to both standard service and migrated customers. The full text of the Settlement is available on the NEM Website.