Suite 1100,10'^' Floor A PHI Company Washington, DC Vice President, Legal Services. September 11, 2015

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1 ^pepco EP Ninth Street, NW Suite 1100,10'^' Floor A PHI Company Washington, Peter E. Meier Fax Vice President, Legal Services ^,. ^ _ peter.meier@pepcoholdings.com Ms. Brinda Westbrook-Sedgwick Commission Secretary Public Service Commission ofthe District ofcolumbia 1325 G Street, N.W. Suite 800 Washington, September 11, 2015 Re: Formal Case No Dear Ms. Westbrook-Sedgwick: On March 11, 2015, Potomac Electric Power Company ("Pepco") submitted its annual report regarding the update of the Purchase of Receivables ("POR") Supplier Discount Rate. Included in Pepco's March 11, 2015 filing were proposed Discount Rates on receivables associated with the various customer classes. On May 1, 2015, the Public Service Commission of the District of Columbia ("Commission") issued a notice requesting comment on Pepco's proposed Discount Rates. Enclosed with this letter is an update to Pepco's Supplier Coordination Tariff filed March II, On Page 42, the addition ofparagraph 6 clarifies that Pepco tracks negative discount rates and amounts by customer class for use in offsetting positive discount rates in the future for the applicable customer classes. Because this one change is a non-material change that does not affect the rates originally proposed by Pepco in its March 11, 2015 filing, an additional notice by the Commission is unnecessary and Pepco requests expedited approval of its proposed Discount Rates so that they can go into effect by October 1, Any questions concerning the Company's POR Supplier Discount Rate filing may be directed to Susan Devito at Sincerely, Peter E. Meier PEM/mda Enclosures cc: All Parties ofrecord

2 CLEAN

3 A PHI Company Electric Suppller-P.S.C. of D.C. No. 1 ELECTRICITY SUPPLIER COORDINATION TARIFF IN THE DISTRICT OF COLUMBIA Date of Issue: September 11, 2015 Date Effective: October 1, 2015

4 A PHI Company Fourth Revised Page No. i TABLE OF CONTENTS 1.0: DEFINITIONS/EXPLANATIONS OF ABBREVIATIONS : GENERAL TERMS AND CONDITIONS Scope and Purpose Electricity Supplier's Responsibilities to Customers Agreement to Govern Recourse to the Commission FERC Jurisdiction Electricity Supplier Obligations Electricity Supplier and Company Obligations Control Area Services and Obligations Communications and Data Exchange Record Retention.7 3.0: UTILIZATION OF SCHEDULING COORDINATORS Participation Through a Scheduling Coordinator Designation of a Scheduling Coordinator Change of Scheduling Coordinator Load Scheduling Through a Scheduling Coordinator Primary Obligations of Electricity Supplier 8 4.0: COMMENCEMENT AND TERMINATION OF COORDINATION SERVICES Application Process to Company Commencement of Coordination Services Notice of Electricity Supplier Discontinuance to the Company Termination of Coordination Services Effect of Termination Survival of Obligations : CREDITWORTHINESS Purpose and Intent Finding of Creditworthiness Credit Amount Change in Financial Status Failure to Maintain Creditworthy Status No Endorsement of Electricity Supplier 13 Date of Issue: September 11, 2015 Date Effective: October 1, 2015

5 A PH! Company Fourth Revised Page No. ii 6.0: NONCOMPLIANCE AND DEFAULT Definition of Noncompliance Events of Noncompliance Cure and Default : CUSTOMER ENROLLMENT AND INFORMATION PROCESS FLOW Disclosure by Selected Electricity Supplier Procedure to Formalize Selection of Electricity Supplier Change of Electricity Supplier Customer Rescission of Change Customer Designation to Control Switch from Electricity Supplier to Standard Offer Service Customer Termination of Service at Existing Account Supplier Discontinuance of Service Effective Date of Discontinuance Customer Number Change Full Requirements Service Provision : GENERAL LOAD OBLIGATION ALLOCATION METHODS The Company's Role Load Profiles Use of Historical Load Information for Forecasting Customer Load Obligations Rounding to Whole Megawatts System Losses Unaccounted for Energy/Residual Load : LOAD RECONCILIATION, CAPACITY, AND TRANSMISSION ACCOUNTING PROCESSES Capacity Transmission Load Forecasting Load Scheduling The Day-After Settlement The "60-Day" Settlement/Consumption Energy Imbalance Settlement Beyond "60 Days" Settlement Calculations 23 Dateofjssue: September 11, 2015 Date Effective: October 1, 2015

6 A FHI Company Electric Supplier P.S.C. of D.C. No. 1 Fourth Revised Page No. iii 10.0: ACTIVE LOAD MANAGEIVIENT ALM Operation Ownership, Maintenance, and Operation of ALM Devices : ELECTRICITY SUPPLIER CHARGES, BILLING AND PAYMENT Charges for Electricity Supplier Services Electricity Supplier Payment of Obligations to the Company Billing for Electricity Supplier's Obligations to Other Parties : RETAIL CUSTOMER BILLING AND PAYMENT COLLECTION Notification Of Retail Customer Billing Option Electricity Company Consolidated Billing Electricity Company Consolidated Billing and Payment Programs Meter Reading Information for Billing Purposes Bill Due Date Electricity Company Consolidated Billing (Rate Ready Format) Failure to Issue Consolidated Bill Separate Billing Payments from Consolidated Billing to Non-Billing Party Payment Posting Credit and Collections Taxes : COMPANY-SUPPLIED METERING SERVICES Meters Reading Non-standard Metering Special Meter Reading Meter Testing : SYSTEM OPERATION Curtailment Reasonable Efforts PJM Requirements : CONFIDENTIALITY OF INFORMATION Generally Customer-Specific Information 32 Dateoflssue: September 11, 2015 Date Effective: October 1, 2015

7 9 A PHI Company Fourth Revised Page No. iv 16.0: DISPUTE RESOLUTION Informal Resolution of Disputes Recourse : FORCE MAJEURE : REGULATORY AUTHORIZATIONS AND JURISDICTION Compliance with Applicable Legal Authorities Change in Applicable Legal Authorities : LIMITATION OF LIABILITY General Limitation of Liability Limitation of Liability for Service Interruptions and Variations Additional Limitations of Liability in Connection with Competitive Power Supply : MISCELLANEOUS PROVISIONS Notices No Prejudice of Rights 37 Schedule 1: Charges for Electricity Supplier Services 38 Schedule 2: District of Columbia Loss Factors 40 Schedule 3: District of Columbia Discount Rate for Purchase of Receivables Date of Issue: September 11, 2015 Date Effective: October 1, 2015

8 AFHCOfT^omj First Revised Page No. 41 Schedule 3: District of Columbia - Discount Rate for Purchase of Receivables (POR) 1) The initial (unadjusted) Discount Rate for Residential Service Customers served under Schedules R, AE; Riders RAD, RAD-AE and R-TM and Non-Residential Small Commercial customers served under Schedules GS-LV ND, T, SL, TS and TN, Large Commercial customer served under Schedules GS-LV, GS 3A, GT LV, GT 3A, GT 3B and RT, and Market Priced Service customers served under Schedules GSLV-ND, GS-LV, GS 3A, GT-LV, GT 3A, T, SL and TS of the Retail Electric Service Tariff is calculated as follows: a) The Uncollectible Expense Component percent is calculated by dividing the Electric Supplier uncollectible expenses associated with each rate schedule by the electricity revenues billed for all Electricity Suppliers for that rate schedule. b) The Late Payment Revenue percent is calculated by dividing the Electric Supplier Late Payment Revenue associated with each rate schedule by the electricity revenues billed for all Electricity Suppliers for that rate schedule. c) The Program Development and Operation Cost is amortized over three years and earns interest at the Company's most recent authorized distribution system rate of return. The annual amortization cost by type is divided by the most recently available number of choice accounts to derive at an annual cost per customer. The average annual customer usage kwh by type are multiplied by the supply rate for that type to calculate the annual supply revenue per customer. The Program Development and Operation Cost Component percent is derived by dividing the annual cost per customer by the annual supply revenue per customer. d) The Risk and Cash Working Capital ("CWC") Component is set to zero at this time. e) The initial Discount Rate is derived by adding the Uncollectible Expense Component net of Reinstatements (a); the Program Development and Operation Cost Component (c); the Risk and CWC Component (d); and subtracting the Late Payment Revenue Component (b). 2) The Reconciliation Component is calculated on the Imbalance separately for residential and non-residential customers. Imbalances are recorded in a balancing asset or liability segment and represent the differences between cumulative costs eligible for recovery and discount amounts for purchased receivables. During its disposition, an Imbalance earns interest at the Company's most recent authorized distribution system rate of return. Such rate is adjusted for taxes, when the Imbalance represents an under-collection of costs to the Company. The Reconciliation Component rate is calculated by dividing the Imbalance separately for residential and non-residential customers by the estimated electricity revenues billed for all Electricity Suppliers for those rate schedules. There will be no rebate/refund mechanism. 3) A separate Interest Factor is derived by dividing any interest earned or owed separatelyfor residential and non-residential customers by the estimated electricity revenues billed for all Date of Issue: September 11, 2015 Date Effective: October 1, 2016

9 APHCompCFKj First Revised Page No. 42 Electricity Suppliers for those rate schedules. 4) Ifthere are unrecovered costs associated with the purchase of eligible ElectricitySupplier receivables and an insufficient number of Electricity Suppliers are using Company consolidated billing to support the recovery of those costs, the Company is permitted to impose a charge on Electricity Suppliers to recover such costs. 5) The Discount Rate (after the first year of service) Is derived by updating the initial rate calculated above and adding the Reconciliation and Interest component. There will be a total of eight separate calculated discount rates: the five Residential classes, R, AE, RAD, RAD-AE, and R-TM, Small Commercial, Large Commercial and Market Priced Service. 6) Pepco tracks negative discount rates and amounts by customer class for use in offsetting positive discount rates in the future for the applicable customer classes. 7) Effective October 1, 2015, the Discount Rates are as follows: Rate Schedule Discount Rate Residential - Schedule R % Residential - Schedule AE % Residential - Schedule RAD % Residential - Schedule RAD-AE % Residential - Schedule R-TM % Small Comm. - Schedules GSLV ND, T, SL, TS and TN % Large Comm. - Schedules GSLV, GS 3A, GT LV, GT 3A, GT 3B and RT % Market Priced - Schedules GS-LVND, GSLV, GS 3A, GT LV, GT 3A, T, SL and TS % Date of Issue: September 11, 2015 Date Effective: October 1, 2015

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11 A PHI Company ELECTRICITY SUPPLIER COORDINATION TARIFF THE DISTRICT OF COLUMBIA Date of Issue: September Date Effective; October

12 A PHI Company Fourth Thifd Revised Page No. i TABLE OF CONTENTS 1.0: DEFINITIONS/EXPLANATIONS OF ABBREVIATIONS 1 2.0: GENERAL TERMS AND CONDITIONS Scope and Purpose Electricity Supplier's Responsibilities to Customers Agreement to Govern Recourse to the Commission FERC Jurisdiction Electricity Supplier Obligations Electricity Supplier and Company Obligations Control Area Services and Obligations Communications and Data Exchange Record Retention 7 3.0; UTILIZATION OF SCHEDULING COORDINATORS Participation Through a Scheduling Coordinator Designation of a Scheduling Coordinator Change of Scheduling Coordinator Load Scheduling Through a Scheduling Coordinator Primary Obligations of Electricity Supplier 8 4.0: COMMENCEMENT AND TERMINATION OF COORDINATION SERVICES Application Process to Company Commencement of Coordination Services Notice of Electricity Supplier Discontinuance to the Company Termination of Coordination Services Effect of Termination Survival of Obligations : CREDITWORTHINESS Purpose and Intent Finding of Creditworthiness Credit Amount Change in Financial Status Failure to Maintain Creditworthy Status No Endorsement of Electricity Supplier 13 Date of Issue: September May 2, 2014 Date Effective: June 1, 2014 October

13 A PHI Company Fourth Third Page No. ii 6.0: NONCOIVIPLIANCE AND DEFAULT Definition of Noncompliance Events of Noncompliance Cure and Default : CUSTOMER ENROLLMENT AND INFORMATION PROCESS FLOW Disclosure by Selected Electricity Supplier Procedure to Formalize Selection of Electricity Supplier Change of Electricity Supplier Customer Rescission of Change Customer Designation to Control Switch from Electricity Supplier to Standard Offer Service Customer Termination of Service at Existing Account Supplier Discontinuance of Service Effective Date of Discontinuance Customer Number Change Full Requirements Service Provision : GENERAL LOAD OBLIGATION ALLOCATION METHODS The Company's Role Load Profiles Use of Historical Load Information for Forecasting Customer Load Obligations Rounding to Whole Megav^^atts System Losses Unaccounted for Energy/Residual Load : LOAD RECONCILIATION, CAPACITY, AND TRANSMISSION ACCOUNTING PROCESSES Capacity Transmission Load Forecasting Load Scheduling The Day-After Settlement The "60-Day" Settlement/Consumption Energy Imbalance Settlement Beyond "60 Days" Settlement Calculations 23 Date of Issue: September May 2, 201^ Date Effective: Juno 1, 201 d October

14 A PHI Company Fourth Third Page No. iii 10.0: ACTIVE LOAD MANAGEMENT ALM Operation Ownership, Maintenance, and Operation of ALM Devices : ELECTRICITY SUPPLIER CHARGES, BILLING AND PAYMENT Charges for Electricity Supplier Services Electricity Supplier Payment of Obligations to the Company Billing for Electricity Supplier's Obligations to Other Parties : RETAIL CUSTOMER BILLING AND PAYMENT COLLECTION Notification Of Retail Customer Billing Option Electricity Company Consolidated Billing Electricity Company Consolidated Billing and Payment Programs Meter Reading Information for Billing Purposes Bill Due Date Electricity Company Consolidated Billing (Rate Ready Format) Failure to Issue Consolidated Bill Separate Billing Payments from Consolidated Billing to Non-Billing Party Payment Posting Credit and Collections Taxes : COMPANY-SUPPLIED METERING SERVICES Meters Reading Non-standard Metering Special Meter Reading MeterTesting : SYSTEM OPERATION Curtailment Reasonable Efforts PJM Requirements : CONFIDENTIALITY OF INFORMATION Generally Customer-Specific Information 32 Date of Issue: September Moy 2, 201^ Date Effective: June 1, 201^ October

15 A PHI Company Fourtii Third Page No. iv 16.0: DISPUTE RESOLUTION Informal Resolution of Disputes Recourse : FORCE MAJEURE : REGULATORY AUTHORIZATIONS AND JURISDICTION Compliance with Applicable Legal Authorities Change in Applicable Legal Authorities : LIIVIITATION OF LIABILITY Genera! Limitation of Liability Limitation of Liability for Service Interruptions and Variations Additional Limitations of Liability in Connection with Competitive Power Supply : MISCELLANEOUS PROVISIONS Notices No Prejudice of Rights 37 Schedule 1: Charges for Electricity Supplier Services 38 Schedule 2: District of Columbia Loss Factors 40 Schedule 3: District of Columbia Discount Rate for Purchase of Receivables Date of Issue; September Mqv Date Effective: Juno ^ October

16 AFHCompory First Revised Original Page No. 41 Schedule 3: District of Columbia - Discount Rate for Purchase of Receivables (POR) 1) The initial (unadjusted) Discount Rate for Residential Service Customers served under Schedules R, AE; Riders RAD, RAD-AE and R-TM and Non-Residential Small Commercial customers served under Schedules GS-LV ND, T, SL, TS and TN, Large Commercial customer served under Schedules GS-LV, GS 3A, GT LV, GT 3A, GT 3B and RT, and Market Priced Service customers served under Schedules GSLV-ND, GS-LV, GS 3A, GT-LV, GT 3A. T, SL and TS of the Retail Electric Service Tariff is calculated as follows: a) The Uncollectible Expense Component percent will be is calculated by dividing the estimated Electric Supplier uncollectible expenses associated with each rate schedule by the electricity revenues billed for all Electricity Suppliers for that rate schedule. b) The Late Payment Revenue percent wul-be is calculated by dividing the ostimatod Electric Supplier Late Payment Revenue associated with each rate schedule by the electricity revenues billed for all Electricity Suppliers for that rate schedule. c) The Program Development and Operation Cost wih-be is amortized overthree years and earns interest at the Company's most recent authorized distribution system rate of return. The annual amortization cost bv type is divided bv the most recentiv available number of choice accounts to derive at an annual cost per customer. The average annual customer usage kwh bv type are multiplied bv the suppiv rate for that tvpe to calculate the annual supply revenue per customer. The Program Development and Operation Cost Component percent is derived bv dividing the annual cost per customer bv the annual supply revenue per customer. d) The Risk and Cash Working Capital ("CWC") Component will be is set at zero to zero at this time. e) The initial Discount Rate is derived by adding the Uncollectible Expense Component net of Reinstatements (a); the Program Development and Operation Cost Component (c); and the Risk and CWC Component (d); and subtracting the Late Payment Revenue Component (b). 2) The Reconciliation Component is calculated on the Imbalance separately for residential and non-residential customers. Imbalances are recorded in a balancing sogmont regulatory asset or regulatory liability segment and represent the differences between cumulative costs eligible for recovery and discount amounts for purchased receivables. During its disposition, an Imbalance earns interest at the Company's most recent authorized distribution system rate of return. Such rate is adjusted for taxes, when the Imbalance represents an under-collection of costs to the Company. The Reconciliation Component rate is calculated by dividing the Imbalance separately for residential and nonresidential customers by the estimated electricity revenues billed for all ElectricitySuppliers Date of Issue: September Soptombor2Q Date Effective: October October 7, 2013

17 APHCorrponi^ First Revised Originai Page No. 42 for tliose rate schedules. There will be no rebate/refund mechanism. 3) A separate Interest Factor is derived bydividingany interest earned or owed separately for residential and non-residential customers by the estimated electricity revenues billedfor all Electricity Suppliers for those rate schedules. 4) If there are unrecovered costs associated with the purchase of eligible Electricity Supplier receivables and an insufficient number of Electricity Suppliers are using Company consolidated billing to support the recovery of those costs, the Company is permitted to impose a charge on Electricity Suppliers to recover such costs. 5) The Discount Rate (after the first year of service) is derived by updating the initial rate calculated above and adding the Reconciliation and Interest component. There will be a total of eight separate calculated discount rates: the five Residential classes, R. AE. RAD. RAD-AE. and R-TM. Small Commercial, Large Commercial and Market Priced Service. 6) Pepco tracks negative discount rates and amounts bv customer class for use in offsetting positive discount rates in the future for the applicable customer classes. 71 Effective October 1,7, , the Discount Rates are as follows; Rate Schedule Discount Rate Residential - Schedules R, AE, and R-TM % % Residential - Schedule AE % Residential - Schedules RAD and RAD AE % % Residential - Schedule RAD-AE % Residential - Schedule R-TM % Small Comm. - Schedules GSLV ND, T, SL, TS and TN % % Large Comm. - Schedules GSLV, GS 3A, GT LV, GT 3A, GT 3B and RT % Ori Market Priced - Schedules GS-LVND, GSLV, GS 3A, GT LV, GT SA, T, SL and TS " % Date of Issue: September Septembep-2-0r2013 Date Effective; October

18 CERTIFICATE OF SERVICE I hereby certify that a true copy of an Update to Potomac Electric Power Company's Supplier Coordination Tarif was served on the parties of record in Formal Case No byelectronic mail this 11'^ day of September Ms. Brinda Westbrook-Sedgwick Commission Secretary Public Service Commission Ofthe District ofcolumbia 1325 G Street N.W. Suite 800 Washington, bwestbrook@psc.dc.gov Sandra Mattavous Frye, Esq. People's Counsel Office ofthe People's Counsel "^ Street, NW Suite 500 Washington, smfi:ye@opc-dc.gov Craig D. Goodman National Energy Marketers Association 3333 K Street NW StellO Washington, cgoodman@energymarketers.com Richard Beverly, Esq. General Counsel Public Service Commission Ofthe District ofcolumbia 1325 G Street N.W. Suite 800 Washington, rbeverly@psc.dc.gov Anthony Cusati, III Interstate Gas Supply, Inc Butter Churn Drive Hemdon, VA tcusati@igsenergy.com Brian R. Greene, Esq. GreeneHurlocker, PLC 1807 Libbie Avenue, Suite 102 Richmond, VA bgreene@greenehurlocker.com Telemac N. Chryssikos, Esq. Washington Gas Energy Services, Inc. 101 Constitution Avenue NW Washington, macchryssikos@wges.com Melanie Santiago-Mosier Washington Gas Energy Services, Inc Sunrise Valley Dr., Suite 200 Hemdon, VA mmosier@wges.com Peter E. Meier

pepco A PHI Company Re: Purchase of Receivables - Formal Case o September 20, 20 13

pepco A PHI Company Re: Purchase of Receivables - Formal Case o September 20, 20 13 l pepco A PHI Company EP1132 701 Ninth Street, NW Suite II 00. loth Floor WashingtOn. 20068 Wendy E. Stark Deputy General Counsel 202 872-2347 202 872-Q767 Fax \\estark 'ii'pepcoholdings.com September