46. In the absence of a POR program, the entity rendering the service is responsible for the and efforts associated with the billing and collection of the amounts owed by its customer and bears the risk that the customer will not timely remit payment and/or not pay the outstanding amount in full. Under a POR program, the entity rendering the service sells its accounts receivable to a third party and receives immediate payment for the receivables less an agreed upon discount to reflect collection risk and the time value of money. Tr. 443. 47. A POR program allows the seller of the receivable to receive payment sooner and avoid the costs and risks associated with collecting any delinquent amounts owed by the customer. Tr. 443. 48. The current POR program was the result of a partial settlement and the Commission’s resolution of two issues reserved for litigation. Petition of PPL Utilities Corporation Requesting Approval of a Voluntary Purchase of Accounts Receivables Program Docket No. P-2009-2129502, 279 PUR4th 539, 2009 Pa. PUC and Merchant Function Charge, 266 at *9 (November 19, 2009) (PPL Electric POR Program”). 49. The accounts receivable purchased by PPL Electric are the moneys owed by shopping customers to the EGS for generation services. PPL Electric purchases these accounts receivable at a discount from the standard supply charges to offset the risks and expenses associated with accounts that may ultimately be uncollectible. PPL Electric St. 6-R, p. 4. 50. The discount rate is composed of two components: (1) an uncollectible accounts expense percentage factor; and (2) a POR development, implementation, and administration percentage factor. PPL Electric St. 6, p. 8. 51. The uncollectible accounts expense percentage factor primarily is based on an average of the Company’s actual bad debt write-offs for the most recent five calendar years. PPL Electric St. 7, p. 33; PPL Electric Ex. JKM-7.
46. In the absence of a POR program, the entity rendering the service is responsible for the and efforts associated with the billing and collection of the amounts owed by its customer and bears the risk that the customer will not timely remit payment and/or not pay the outstanding amount in full. Under a POR program, the entity rendering the service sells its accounts receivable to a third party and receives immediate payment for the receivables less an agreed upon discount to reflect collection risk and the time value of money. Tr. 443. 47. A POR program allows the seller of the receivable to receive payment sooner and avoid the costs and risks associated with collecting any delinquent amounts owed by the customer. Tr. 443. 48. The current POR program was the result of a partial settlement and the Commission’s resolution of two issues reserved for litigation. Petition of PPL Utilities Corporation Requesting Approval of a Voluntary Purchase of Accounts Receivables Program and Merchant Function Charge, Docket No. P-2009-2129502, 279 PUR4th 539, 2009 Pa. PUC 266 at *9 (November 19, 2009) (PPL Electric POR Program”). 49. The accounts receivable purchased by PPL Electric are the moneys owed by shopping customers to the EGS for generation services. PPL Electric purchases these accounts receivable at a discount from the standard supply charges to offset the risks and expenses associated with accounts that may ultimately be uncollectible. PPL Electric St. 6-R, p. 4. 50. The discount rate is composed of two components: (1) an uncollectible accounts expense percentage factor; and (2) a POR development, implementation, and administration percentage factor. PPL Electric St. 6, p. 8. 51. The uncollectible accounts expense percentage factor primarily is based on an average of the Company’s actual bad debt write-offs for the most recent five calendar years. PPL Electric St. 7, p. 33; PPL Electric Ex. JKM-7.
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