A stipulation is now pending before the Public Utilities Commission of Ohio (the "PUC") to settle a dispute between several competitive retail electric service providers (the "Complainants") and several electric distribution utilities (the "Respondents"). WPS Energy Services, Inc., et al. v. FirstEnergy Corp., et al., Case No. 02-1944-EL-CSS (April 24, 2003) (the "Stipulation"). The Complainants generate electricity for sale to retail customers and distribute the electricity over the Respondents’ distribution system. The Complainants’ fee for supplying electricity is included in a consolidated bill for services issued by the Respondents. The dispute concerns collection of payment of amounts owed to the Complainants.
In their complaint (July 31, 2002), the Complainants allege that PUC privacy rules prevent the Complainants from obtaining customer information from the Respondents, such as payment history, social security numbers and phone numbers, that is essential "to mount efficient collection efforts." For this reason, the Complainants allege, the PUC ordered the Respondents to purchase the Complainants’ accounts receivables at a negotiated discount. The Complainants contend that the Respondents failed to negotiate an accounts receivable purchase agreement in good faith.
The Complainants further allege that many customers have fallen in arrears, that PUC rules assign priority to payment of the Respondents’ portion of the consolidated bills such that no portion of the payment is applied to the Complainants’ portion of the bill until all past and current charges owed to the Respondents are paid in full, and that "tens of thousands" of customers have been returned to standard offer service for failure to pay Complainants’ portion of the consolidated bill. In a recently filed motion for investigation and audit (April 15, 2003), the Complainants specify that they have obtained payments for approximately 92% of the amounts billed, as compared the Respondents, whose "recovery of their own receivables approaches 100%," and that the shortfall for one of the Complainants is "about $14 million."
The Respondents dispute many of these allegations, including the allegation that they are required to purchase the Complainants’ accounts receivable or that they have failed to negotiate an accounts receivable purchase agreement in good faith. The parties were careful to specify in the Stipulation that the Stipulation "does not necessarily reflect the position which [the parties] would have taken if [the] issues had been fully litigated." Among other things, the Stipulation provides that the Respondents need not purchase the Complainants’ accounts receivable, but that they will instead modify the partial payment priority scheme to first pay all past due amounts owed to the Complainants, then all past due amounts owed to the Respondents, then all current amounts owed to the Respondents, and then all current amounts owed to the Complainants.
The Stipulation is subject to PUC approval and is contingent on waiver by the PUC of rules and orders to the extent necessary to implement the Stipulation, including any requirements relating to the purchase of the Complainants’ accounts receivable and partial payment priority.