The Commission issued an order approving a 4.39% residential POR discount rate for WGL and a commercial POR discount rate of 0.83%. The discount rates were set using a two year amortization period. A rehearing request of the Order has been filed recommending that a five year amortization period be used, which would produce a 3.09% residential discount rate and 0.79% commercial discount rate, as had originally been proposed by WGL. Responses to the request for rehearing are due August 9, 2011. The full texts of the WGL POR Order and the Request for Rehearing are available on the NEM Website.

National Grid and NStar filed electric POR implementation plans, as was required by Department Order. National Grid's filing calculates the uncollectible percentage component of the POR discount rate by customer class as follows:

Residential - 1.95%
Commercial - 1.19%
Industrial - 0.34%

National Grid's estimate of POR program administrative costs is $265,000.

NStar's calculation of the bad debt rate component of the POR discount rate by customer class is as follows:

Residential - 2.546%
Small C&I - 0.785%
Large C&I - 0.038%

NStar's estimate of administrative costs to implement a POR program is $1.039 million.

NStar's filing sets forth "the percentage discount rates to be used for the purchase of existing receivables payments at the start of the program and the methodology for applying those percentages as follows":

Residential
0-30 days - 2.546 percent (percentage applied to the ongoing receivables program)
31-60 days - 5.092 percent (twice the percentage applied to the ongoing receivables program)
61-90 days - 30 percent of existing receivable balance
91-120 days - 50 percent of existing receivable balance
121 days or greater - 90 percent of existing receivable balance
Small C&I
0-30 days - 0.785 percent (percentage applied to the ongoing receivables program)
31-60 days - 1.570 percent (twice the percentage applied to the ongoing receivables program)
61-90 days - 30 percent of existing receivable balance
91-120 days - 50 percent of existing receivable balance
121 days or greater - 90 percent of existing receivable balance
Large C&I
0-30 days - 0.038 percent (percentage applied to the ongoing receivables program)
31-60 days - 0.076 percent (twice the percentage applied to the ongoing receivables program)
61-90 days - 30 percent of existing receivable balance
91-120 days - 50 percent of existing receivable balance
121 days or greater - 90 percent of existing receivable balance

The full texts of the National Grid and NStar Implementation Plans are available on the NEM Website.

NEM filed comments on NFG’s proposed revisions to storage inventory balance requirements. The proposed tariff revisions were submitted for an August 31, 2011, effective date. NEM recommended that the Commission reject NFG’s proposed modifications to the storage inventory requirements arguing that NFG failed to justify the proposed changes to the storage inventory requirements. NEM argued that marketers should not be required to take storage, rather that the percentages should serve as target guidelines. However, if marketers are continued to be required to take storage, then the current storage percentages should remain unchanged and not be made more stringent. In addition, if marketers are required to take storage, a tolerance should be incorporated to account for adjustments. NEM also recommended that the demand charge credited to a marketer when it returns storage capacity and gas to the utility be the same as the demand charge billed to the marketer when it enrolls a customer. The full text of NEM's Comments is available on the NEM Website.

The Commission issued an Order initiating Phase II of its retail electricity market investigation. This was premised on its finding, "that changes are necessary in order to improve the current retail electricity market model in Pennsylvania. We also find that the existing default service model presents substantial impediments to the development of a vibrant competitive retail market in Pennsylvania. As such, the existing retail electricity market model and the current default service model prevent this Commission from fully carrying out the legislative goals set forth in the Electricity Generation Customer Choice and Competition Act. Accordingly, we direct this Commission’s Office of Competitive Markets Oversight to initiate Phase II of this Investigation and provide recommendations to this Commission which will present specific proposals for changes to the existing retail market and default service model, including any necessary regulatory or legislative changes. The recommended changes should be targeted to the improvement of Pennsylvania’s retail electric market by providing for a more informed and involved consumer population, additional products and services as well as increased participation and investment in Pennsylvania’s retail electricity market by EGSs."

Phase II will focus on three categories of issues and commence with a Staff technical conference on August 10, 2011. The three categories of issues for which the Commission is seeking recommendations are:
1) intermediate steps pertaining to changes to the existing market model;
2) long range steps involving structural changes to the default service model; and
3) a revised and enhanced customer education program.
The intermediate work plan is to be presented to the Commission in December 2011 and the long range work plan is to be presented in the first quarter of 2012.

Issues to be considered as intermediate steps are to include:
"1. Prohibition of marketing of default service;
2. Assignment of new customers or customers on default service who move to new addresses to EGSs, i.e. eliminate the automatic assignment of customers to default service;
3. Customer referral programs;
4. Information access, including smart meter data;
5. Annual auction of customers on an opt-in basis;
6. Examination of current default service procurement schedules;
7. Accelerated switching time frames, e.g. examination of 16 day waiting period;
8. Uniform EDC/EGS coordination protocols, e.g. credit standards;
9. EDC supplier charges."

Issues to be considered as long term steps are to include:
"1. The basic definition of default service, i.e. should default service be last resort service or open to anyone who simply declines to choose a provider;
2. Cost allocation, i.e. does the current structure capture all of the costs of default service, or are some of those costs retained in distribution rates;
3. Should default service remain with the EDCs;
4. Pricing of default service, including term and reconciliation;
5. Uniform EDC/EGS coordination protocols, e.g. billing systems;
6. Accelerated switching time frames, e.g. mid-cycle meter reads and integration of customer switching in smart-meter deployment."

The full text of the Order is available on the NEM Website.