POR que?
The acronym POR – Purchase of Receivables – has traveled around our industry for years. In recent years POR has ramped up, with new POR programs available in IL and CT territories, not to mention existing ones in dozens of other territories. What is POR and what does it mean to a Supplier?
First, POR represents a steady, lower-risk revenue stream for a Supplier. They sign a customer, and N days after the Utility sends the consolidated bill to the Customer for last months energy, the Supplier gets paid by the Utility, regardless if the Customer pays or not. The Utility now owns the Receivable, including responsibility for collections of that receivable.
Second, a Supplier usually pays a fee to the Utility for this ‘purchase’. Most often this takes the form of a discount: Suppliers charges are $100, discount is 1% so they get paid $99 by the Utility.
Third, POR enables Suppliers to go after customers who are not the low hanging fruit in the industry. Residentials and small commercials are often the least served demographic in Choice markets partially because of the collections risk.
There are certainly other advantages as well as a few disadvantages (e.g. high discount percentages in some markets), but most Commission websites for POR territories show an active and growing list of Suppliers.
POR que? Para obtener más clientes, mayores ingresos y beneficios más altos. ¡Vamos!