I believe this is an area which lacks IRS guidance. How does a plan sponsor apply the prior year testing method for the ACP if the plan has a discretionary match provision and in the prior year no match was contributed (assuming the testing year is not the first plan year)?

From what I've researched, it appears the HCEs would be unable to receive a matching contribution for the year being tested.

Any comments?

There is no logic to using prior year ACP testing for discretionary matches. One should use current year testing in these situations otherwise the "discretion" in discretionary matches soon disappears when attempting to increase the match from year to year.