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CRR Shortfall – Revenue Equalization Part 2 (Continuation from 2/21/08 TPTF discussion)

CRR Shortfall – Revenue Equalization Part 2 (Continuation from 2/21/08 TPTF discussion). Bill Barnes TPTF 3/5/2008. CRR Settlement Revenue - Overview. CRR Settlement Revenue - Overview. Balancing Account Process – managing CRR revenue adequacy

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CRR Shortfall – Revenue Equalization Part 2 (Continuation from 2/21/08 TPTF discussion)

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  1. CRR Shortfall – Revenue EqualizationPart 2 (Continuation from 2/21/08 TPTF discussion) Bill Barnes TPTF 3/5/2008

  2. CRR Settlement Revenue - Overview

  3. CRR Settlement Revenue - Overview • Balancing Account Process – managing CRR revenue adequacy • Day-Ahead Congestion Rent is compared to total Day-Ahead CRR payments on an hourly basis for the Operating day. • If excess Day-Ahead Congestion Rent exists compared to Day-Ahead CRR payments for the hour, excess added to Balancing Account. • If there is not enough Day-Ahead Congestion Rent to cover Day-Ahead CRR payments for the hour, a Day-Ahead shortfall is calculated for the operating day and allocated to DA and RT CRR holders. • At the end of the month, the total shortfall accumulation for the month is compared to Balancing Account accrual. • If BA is non-zero, any CRR holders shorted during the month will be made whole up to BA amount. • Excess funds in Balancing Account after alleviating CRR shorts will be paid to QSEs based on LRS. • Balancing Account clearing process independent of DAM or RTM invoicing process.

  4. CRR Settlement Revenue - Shortfall Allocation • Why do we allocate to the Real-Time? • NP Section 4.5.1 (8) • “The directional network element flows for PTP Options declared for settlement in Real-Time must be properly accounted for in determining available transmission network capacity in the DAM.” • Translation: DAM clearing engine will make an economic decision to clear a CRR offer (settled in DAM) or reserve the capacity for Real-Time (settled in RT). • Since RT CRR capacity is reserved in the DAM, it would not be covered by DAM Congestion Rent. • Why do we allocate a shortfall of DAM Congestion Rent compared to DAM CRR payments to RT CRR Account Holders? • Equitable treatment of all CRR AHs

  5. The following slides are from 2/21/2008 TPTF discussion.

  6. CRR Settlement Revenue - Shortfall • DACONGRENT + DACRR Charges < DACRR Credits • CRR Shortfall • Based on revenue shortfall in DAM only • Shortfall assigned to CRR AHs in DAM and RT • Issue: ERCOT pays out money for DAM that it does not collect until RT

  7. CRR Settlement Revenue - Shortfall

  8. CRR Settlement Revenue - Shortfall • Solution: NPRR to remove CRR Shortfall partial assignment to RT

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