Nodal Settlement Delta Calculations and Statements

Objective: Describe the recommended design of nodal settlement delta calculations and statements.

What is the problem?

Zonal Settlement System produces excessive interval data of questionable value to ERCOT and Market Participants

Zero Data Statistics (Production Lodestar Database as of 4/26/05)

Data-base Table

Total Row Count

ZC Row Count

Total Disk Space

Total ZC Disk Space

% Row Count

% Disk Space

Byte / Row

ZERO-CHARGE

52,000,000 52,000,000 26 GB 26 GB 100% 100% 500

LSCH 398,500,000 270,600,000 224 GB 146 GB 68% 65% 562

LSCD 398,500,000 270,600,000 390 GB 254 GB 68% 65% 978

5 CM Zones 500 CM Zones

1000 CM Zones

Job Run Time 45 Min 20 Hours 41 Hours

Zero Charge Database Records

16,797 403,039 787,423

Transaction Database Records

579 579 579

Interval Database Records

173,760 4Million 7.9Million

Zonal Settlements System Architecture Stress Test Results

Current Settlements System Characteristics

Always produce 5 output interval cuts regardless of value PRICE, QUANTITY, AMOUNT, BILLAMT,

BILLQTY Force PRICE X QUANTITY format

Deltas (BILLQTY, BILLAMT) calculated at interval level

Zero data calculated at interval level and calculated for deltas

Statements repeat previous settlement data

Regulation Up Service Charge - LARU LARUAMT = (PCRUAMTew +

PCOOMRUAMTew) / (RULRSOBew – RUSAQew) * (RULRSOBqse – RUSAQqse)

LARUPRICE = (PCRUAMTew + PCOOMRUAMTew) / (RULRSOBew – RUSAQew)

LARUQTY = (RULRSOBqse – RUSAQqse) LARUAMT = LARUPRICE * LARUQTY LARUBILLQTY = Current LARUQTY – Previous

LARUQTY LARUBILLAMT = Current LARUAMT – Previous

LARUAMT

Current Settlements System ExampleFirst Settlement RunFormula: D_AMT = (A + B) * C

Input Interval Cut A = 5,4,6,5,4Input Interval Cut B = 0,0,0,0,0Input Interval Cut C = 2,2,2,2,2

Forced PRICE*QTY -> D_QTY = A + B, D_PRICE = COutput Interval Cut D_QTY = 5,4,6,5,4Output Interval Cut D_PRICE = 2,2,2,2,2Output Interval Cut D_AMT = 10,8,12,10,8

Total = 48Output Interval Cut D_BILLQTY = 5,4,6,5,4Output Interval Cut D_BILLAMT = 10,8,12,10,8

Total = 48

Current Settlements System ExampleSecond Settlement RunFormula for D_AMT = (A + B) * C

Input Interval Cut A = 5,4,6,5,4Input Interval Cut B = 1,1,1,1,1Input Interval Cut C = 2,2,2,2,2

Forced PRICE*QTY -> D_QTY = A + B, D_PRICE = COutput Interval Cut D_QTY = 6,5,7,6,5Output Interval Cut D_PRICE = 2,2,2,2,2Output Interval Cut D_AMT = 12,10,14,12,10

Total = 58Output Interval Cut D_BILLQTY = 1,1,1,1,1Output Interval Cut D_BILLAMT = 2,2,2,2,2

Total = 10

Current Settlements System Inefficiencies

Input interval cuts are restated as PRICE and QTY cuts

Deltas (BILLQTY, BILLAMT) calculated at interval level (15min, hourly) Excessive interval data

Zero data calculated at interval level and calculated for deltas High zero data overhead, excessive

interval data

Nodal Protocol Needs

Increased number of charge and payment types to process 55 to 80 → More data

+ Lower granularity of settlement output Settlement Points, RUC → More data

+ Increased use of interim calculations More data

+ New statements and invoices______________________________________= Differing Architectural Needs for Nodal

Settlement and Billing System

Nodal Settlements System Design Proposal

Simplify data requirements while still giving the Market what they need – we need to be lean and efficient No PRICE and QTY cuts

Inputs and Outputs specified in Nodal Protocols No BILLQTY delta cut

Quantity cuts do not exist in Nodal Protocols so we will not create them nor the corresponding delta cut

BILLAMT delta cut NOT at interval level BILLAMT calculated at Trade Date summary level

Zero AMT output saved at Trade Date summary level unless non-zero values sum to zero

No zero amount interval data when every interval is zero Statements will not repeat previous settlement data Statements roll up charges/payments to statement recipient

level (even if charges/payments are at SPP or Resource Node level)

All Input and Output data available in extracts

Nodal Settlements System Example 1First Settlement RunFormula: D_AMT = (A + B) * C

Input Interval Cut A = 5,4,6,5,4Input Interval Cut B = 0,0,0,0,0Input Interval Cut C = 2,2,2,2,2

Output Interval Cut D_AMT = 10,8,12,10,8Total = 48

Output D_BILLAMT = 48 1st StatementInterval D_AMT1 102 83 124 105 8

D_AMT Total = 48D_BILLAMT = 48

Nodal Settlements System Example 1Second Settlement RunFormula: D_AMT = (A + B) * C

Input Interval Cut A = 5,4,6,5,4Input Interval Cut B = 1,1,1,1,1Input Interval Cut C = 2,2,2,2,2

Output Interval Cut D_AMT = 12,10,14,12,10Total = 58

Output D_BILLAMT = 10 2nd StatementInterval D_AMT1 122 103 144 125 10

D_AMT Total = 58D_BILLAMT = 10

Nodal Settlements System Example 1Third Settlement RunFormula: D_AMT = (A + B) * C

Input Interval Cut A = 5,4,6,5,4Input Interval Cut B = 1,1,1,1,1Input Interval Cut C = 2,2,2,2,2

Output Interval Cut D_AMT = 12,10,14,12,10Total = 58

Output D_BILLAMT = 0 3rd StatementD_AMT Total = 58D_BILLAMT = 0

Nodal Settlements System Example 2First Settlement RunFormula: D_AMT = (A + B) * C

Input Interval Cut A = 5,4,6,5,4Input Interval Cut B = 1,1,1,1,1Input Interval Cut C = 0,0,0,0,0

Output D_AMT = 0

Output D_BILLAMT = 0 1st StatementD_AMT Total = 0D_BILLAMT = 0

Nodal Settlements System Example 2Second Settlement RunFormula: D_AMT = (A + B) * C

Input Interval Cut A = 5,4,6,5,4Input Interval Cut B = 1,1,1,1,1Input Interval Cut C = 1,1,1,1,1

Output Interval Cut D_AMT = 6,5,7,6,5Total = 29

Output D_BILLAMT = 29 2nd StatementInterval D_AMT1 62 53 74 65 5

D_AMT Total = 29D_BILLAMT = 29

Nodal Settlements System Example 3First Settlement RunFormula: D_AMT = (A + B) * C

Input Interval Cut A = 5,4,6,5,4Input Interval Cut B = 1,1,1,1,1Input Interval Cut C = 0,1,0,0,-1

Output Interval Cut D_AMT = 0,5,0,0,-5Total = 0

Output D_BILLAMT = 0 1st StatementInterval D_AMT1 02 53 04 05 -5

D_AMT Total = 0D_BILLAMT = 0

Nodal Protocol Compliance9.2.1 Settlement Statement Process for the DAMERCOT shall produce daily Settlement Statements for the Day-Ahead Market (DAM), as defined in Section 9.2.2, Settlement

Statements for the DAM, that show a breakdown of financial obligations between ERCOT and a Market Participant incurred in the DAM, including any administrative and miscellaneous charges applicable to the DAM.

9.2.2 Settlement Statements for the DAM (7) Settlement Statements for the DAM must break fees down by Charge Types into the appropriate one-hour Settlement

Interval for that type.

9.2.3 DAM Settlement Charge TypesERCOT shall provide, on each Settlement Statement, the dollar amount for each DAM Settlement charge and payment.

9.2.5 DAM Resettlement Statement(3) A DAM Resettlement Statement must reflect differences to financial records generated on the previous Settlement

Statement for the given DAM.

9.5.1 Settlement Statement Process for the Real-Time Market ERCOT shall produce daily Settlement Statements for the Real-Time Market (RTM), as defined in Section 9.5.2, Settlement

Statements for the RTM, that show a breakdown of Charge Types incurred in the RTM, including any administrative and miscellaneous charges applicable to the RTM.

9.5.2 Settlement Statements for the RTM(8) A Settlement Statement for the RTM must break the fees down by Charge Type into the appropriate 15-minute or

one-hour Settlement Interval for that type.

9.5.3 Real-Time Market Settlement Charge TypesERCOT shall provide, on each RTM Settlement Statement, the dollar amount for each RTM Settlement charge and payment.

9.5.5 RTM Final Statement(2) An RTM Final Statement will reflect differences to financial records generated on the previous Settlement Statement

for the given Operating Day

9.5.6 RTM Resettlement Statement(6) An RTM Resettlement Statement will reflect differences to financial records generated on the previous Settlement

Statement for the given Operating Day.

9.5.8 RTM True-Up Statement(3) An RTM True-Up Statement will reflect differences to financial records generated on the previous Settlement

Statement for the given Operating Day.