Small Resettlements A Proposal to Reduce Impact on ERCOT and Market Participants.

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Presentation transcript:

Small Resettlements A Proposal to Reduce Impact on ERCOT and Market Participants

PUCT Notice of Violation (NOV) When the PUCT determines that a market participant has violated a protocol, procedure or rule, they generally assess a fine and order restitution to the market. Restitution is usually accomplished through resettlement. When dollar amounts are small, the costs outweigh the benefits. Such costs are ultimately born by Texas consumers.

When Resettlement is Ordered ERCOT Must Resettle the Operating Day(s) Calculate revenues/costs by QSE Process payments and/or invoices QSEs Must Shadow Settle to ensure accuracy Allocate funds to entities that they represent Process payments and/or invoices

Example: Assume Small “NOV” Resettlement Docket #33177 ERCOT ERCOT staff reviews the order and performs analysis to determine data needs to be set up for the resettlement (2-4 hours depending on the complexity) Schedules resettlement, coordinates market notices, initiates batch processes to include the resettlement (1-3 hours) Settlement staff validates resettlement statements and calculations (3-4 hours) ; validates statements are accurate and timely (2-3 hours).  Estimate of incremental administrative hours due to resettlement of Docket #33177 = 8 hours Each QSE Review of PUCT Final Order, analyze charge types, protocols, and data (1-5 hours) Shadow Settlement – Verify the resettlement used the correct input data and resettlement was correctly calculated (1-5 hours) Secondary Settlement – allocation of ther resettlement MWs & MWhs and $ to the correct customer classes (1-3 hours) Invoices – preparing invoices, processing payments, & management review of resettlement (1-2 hours) Customer communication – explain the resettlement to customers impacted using letters, stuffers, etc. (1-3 hours)  Estimate of incremental administrative hours due to resettlement of Dockett #33177 = Avg of 7 hours per QSE

Estimated Cost Impact to Market Docket #33177 ASSUMPTIONS  Time required by ERCOT effect resettlement = 8 hours  Market cost for ERCOT resettlement $75/hr  Time required by 25 QSEs to review and shadow settle PUCT Docket #33177 estimated = 7 hours ea.  Market cost for QSE resettlement $65/hr ESTIMATED MARKET IMPACT  ERCOT Cost = (8 x $75) = $ 600  QSE Costs = (7 x $65 x 25) = $11,375 Estimate to resettle market = $11,975  Less Constellation Payment = ($ 1,103)  Est. benefit (ratepayers) = ($10,872)

Suggestions Presented to PUCT Staff When market wide resettlement for NOV is estimated to be less than $ 50,000 1.ERCOT use such funds to reduce Short Pay Uplifts, or if there are no “Uplifts” are outstanding; 2.ERCOT apply the funds as a credit to the next billing cycle for Market Participants.

Following discussion at COPS the following Resolution Was Approved Be it resolved that COPS requests the PUCT Staff consider recommending to the Commission when a Notice of Violation (NOV) case has been resolved and results in a final PUCT order, that restitution to the ERCOT market for amounts less than $50,000 be directed to ERCOT and ERCOT first use the funds to reduce any outstanding “Short Pay Uplifts”. In the event there are no “Short Pay” amounts outstanding, ERCOT should then be required to distribute the restitution amount to affected QSEs on the next billing cycle at their current “Load Ratio Share”. VOTE Motion

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