Settlements & Billing / Version: 5.0
Configuration Guide for: Invoice Deviation Interest Distribution / Date: 05/19/09

Settlements & Billing

BPM Configuration Guide:Invoice Deviation Interest Distribution

CC 7989

Version 5.0

CAISO, 2018 / Page 1 of 14
Settlements & Billing / Version: 5.0
Configuration Guide for: Invoice Deviation Interest Distribution / Date: 05/19/09

Table of Contents

1.Purpose of Document

2.Introduction

2.1Background

2.2Description

3.Charge Code Requirements

3.1Business Rules

3.2Predecessor Charge Codes

3.3Successor Charge Codes

3.4Inputs – External Systems

3.5Inputs - Predecessor Charge Codes or Pre-calculations

3.6CAISO Formula

3.7Outputs

4.Charge Code Effective Date

1.Purpose of Document

The purpose of this document is to capture the requirements and design specification for Charge Code7989to assess and apply interest, by Scheduling Coordinator,CRR Holder, Black Start Generator or Participating TO,to deviations for each Trading Month between: (i) each Initial Settlement Statement T+7B (invoiced semi-monthly) and Recalculation Settlement Statement T+ 38B (invoiced monthly); and (ii) Recalculation Settlement Statement T+38B (invoiced monthly) and Recalculation Settlement Statement T+76B (invoiced monthly).[1]

2.Introduction

2.1Background

The CAISO’s payment acceleration program significantly shortens the time period in which the CAISO invoices and settles market transactions. Under payment acceleration, the timeframe for the CAISO’s release of its Initial Settlement Statement for each Trading Day is reduced from 38 to 7 Business Days and the payment timeline is reduced from 38 Business Days after the last Trading Day of the month through semi-monthly invoicing. As a result, the average cash clearing schedule is shortened from approximately 80 to 25 calendar days. The shorter cash clearing schedule reduces the amount of outstanding market charges and payments, and exposes Market Participants to less credit risk.

Underthe payment acceleration program, the CAISO charges or pays interest, by Scheduling Coordinator,CRR Holder, Black Start Generator or Participating TO,for each Trading Month based on deviations between: (i) each Initial Settlement Statement T+7B and Recalculation Settlement Statement T+ 38B; and (ii) Recalculation Settlement Statement T+38B and Recalculation Settlement Statement T+76B.

The application of interest ensures that the time value of money is properly accounted for when Market Participants initially are overcharged or undercharged due to estimated Meter Data, updates to SQMD Meter Data, and price adjustments on Invoices generated semi-monthly at T+7B. The interest provision is also intended to eliminate financial incentive to submit unreasonable estimates of Meter Data for the Initial Settlement Statement T+7B.

2.2Description

Interest will be charged or paid through new separate Charge Codes (7989 and 7999) in the CAISO Settlements system. These Charge Codes will be based on deviations for each Trading Month, by Scheduling Coordinator,CRR Holder, Black Start Generator or Participating TO,between: (i) each Initial Settlement Statement T+7B and Recalculation Settlement Statement T+ 38B; and Recalculation Settlement Statement T+38B and Recalculation Settlement Statement T+76B.

There are three variables used to calculate the interest applicable to the deviations:

  • FERC annual rate of interest
  • Number of interest days; and
  • The amount of each deviation.

Because invoicing occurs semi-monthly and is based on statements ranging in date from the 1st to the 15th of the month and from the 16th to the end of the month, the deviation for eachTradingMonth between the Recalculated Settlement Statement and each semi-monthly initial Invoice must be determined.

Four bill determinants are required to record total amounts of the Initial Settlement Statements T+7B from the 1st to the 15th and the 16th to the end of the month, as well as total amounts of the Recalculation Settlement Statement T+38B and Recalculation Settlement Statement T+76B for the same Trading Month. For clarification, the following terms are used to identify these amounts.

  • Initial_1 is the total amount for the Initial Settlement Statements T+7B from the 1st to the 15th.
  • Initial_2 is the total amount for the Initial Settlement Statements T+7B from the 16th to the end of the month.
  • TrueUp_1 is the total amount for Recalculation Settlement Statement T+38B for the Trading Month that corresponds with Initial_1 and Initial_2.
  • TrueUp_2 is the total amount for Recalculation Settlement Statement T+76B for the Trading Month that corresponds with Initial_1 and Initial_2.

Interest charged or paid will be calculated back to the due date of the initial Invoices; therefore, bill determinants are required to determine the number of days of interest between these due dates.

If the due dates between the initial Invoice containing Initial Settlement Statements T+7B and the initial Invoice containing Recalculation Settlement Statement T+38B or Recalculation Settlement Statement T+76B span calendar quarters, then interest is compounded quarterly. Since the due dates between an initial Invoice containing Initial Settlement Statements T+7B and Recalculation Settlement Statement T+76B can span at most three calendar quarters, 3 bill determinants are defined to record the FERC interest rate for each of those quarters.

Finally, if the interest calculated results in a payment to a Scheduling Coordinator, CRR Holder, Black Start Generator or Participating TO, the Charge Code to be used is 7989. If the interest calculated results in payment to the CAISO by the Scheduling Coordinator, CRR Holder, Black Start Generator or Participating TO, the Charge Code to be used is 7999. Charge Code 7989 will be discussed in this configuration document.

3.Charge Code Requirements

3.1Business Rules

Bus Req ID / Business Rule
1.0 / Invoice deviation interest distribution is provided by Market Clearing to Settlements.
2.0 / A business requirement exists that invoice deviation interest distribution appears on the first available initial Invoice. The Trading Day will always reflect either the 15th or end of month Trading Days.
3.0 / Settlements receives from Market Clearing supporting data which is provided to the Market Participants for validation purposes.
4.0 / FERC published annual interest rate may change on a quarterly basis.
5.0 / ‘From Date’ is defined as the due date for initial Invoice or beginning of quarter date.
5.1 / ‘From Date Type’is defined as a set of enumerations that indicate what type the ‘From Date’ represents and the set of values are:‘Initial 1 Due Date’, ‘Initial 2 Due Date’, ‘BOQ1 Date’, ‘BOQ2 Date’, and ‘BOQ3 Date’.
6.0 / ‘To Date’ is defined as the due date of true up adjustment Invoice or end of quarter date.
6.1 / ‘To Date Type’is defined as a set of enumerations that indicate what type the ‘To Date’ represents and the set of values are: ‘True Up 1 Due Date’, ‘True Up 2 Due Date’, ‘EOQ1 Date’, ‘EOQ2 Date’, and ‘EOQ3 Date’.
7.0 / The difference between ‘From Date’ and ‘To Date’ determines the number of days used in the interest calculation formula
8.0 / FROM_DATE_TYPE VALUE DESCRIPTION
Initial_1_Due_Date 1st initial Invoice due date
Initial_2_Due_Date 2nd initial Invoice due date
BOQ1_Date Beginning of 1st quarter date
BOQ2_Date Beginning of 2nd quarter date
BOQ3_Date Beginning of 3rd quarter date
TO_DATE_TYPE VALUE DESCRIPTION
True_Up_1_Due_Date1st true-up adjustment
Invoice due date
True_Up_2_Due_Date 2nd 1st true-up adjustment
Invoice due date
EOQ1_Date End of 1st quarter date
EOQ2_Date End of 2nd quarter date
EOQ3_Date End of 3rd quarter date

3.2Predecessor Charge Codes

Charge Code/ Pre-calc Name
None

3.3Successor Charge Codes

Charge Code/ Pre-calc Name
None

3.4Inputs – External Systems

Row # / Variable Name / Description
1 / BADayInvoiceDeviationInterestDistribution BU’Umd / Interest amount to be paidto the Market Participant due to negative invoice deviation as a financial adjustment by Business Associate ID (B), Bill Period Start (U’), Bill Period End (U), Trading Month (m) and Trading Day (d).
2 / BADayInitialInvoice1stToMidMonthAmount BV’U’UFF”md / Amount of the first initial Invoice issued to the Market Participant for the period 1st through the 15th of the month by Business Associate ID (B), Invoice Reference Number (V’), Bill Period Start (U’), Bill Period End (U), Invoice From Date (F), Invoice From Date Type (F”), Trading Month (m) and Trading Day (d).
3 / BADayInitialInvoiceMidMonthToEndOfMonthAmount BV’U’UFF”md / Amount of the second initial Invoice issued to the Market Participant for the period 16th through the endof the month by Business Associate ID (B), Invoice Reference Number (V’), Bill Period Start (U’), Bill Period End (U), Invoice From Date (F),Invoice From Date Type (F”), Trading Month (m), and Trading Day (d).
4 / BADay1stTrueUpInvoiceAmount BV’U’UTT”md / Amount of the 1st true-up adjustment issued to the Market Participant at T+38B for the period 1st through the endof the month by Business Associate ID (B), Invoice Reference Number (V’), Bill Period Start (U’), Bill Period End (U), Invoice To Date (T) Invoice To Date Type (T”), Trading Month (m), and Trading Day (d).
5 / BADay2ndTrueUpInvoiceAmount BV’U’UTT”md / Amount of the 2nd true-up adjustment issued to the Market Participant at T+76B for the period 1st through the endof the month by Business Associate ID (B), Invoice Reference Number (V’), Bill Period Start (U’), Bill Period End (U), Invoice To Date (T) Invoice To Date Type (T”), Trading Month (m), and Trading Day (d).
6 / NumberOfInterestDaysBetween1stInitialAndTrueup
FF”TT”md / Number of Interest days between 1st Initial Invoice and true up adjustment by Invoice From Date (F),Invoice From Date Type (F”), Invoice To Date (T), Invoice To Date Type (T”), Trading Month (m), and Trading Day (d).
7 / NumberOfInterestDaysBetween2ndInitialAndTrueup
FF”TT”md / Number of Interest days between 2nd Initial Invoice and true up adjustment by Invoice From Date (F),Invoice From Date Type (F”), Invoice To Date (T), Invoice To Date Type (T”), Trading Month (m), and Trading Day (d).
8 / NumberOfInterestDaysBetween1stInitialAndEndOfQuarter
FF”TT”md / Number of Interest days between 1st Initial Invoice and end of quarter by Invoice From Date (F),Invoice From Date Type (F”), Invoice To Date (T), Invoice To Date Type (T”), Trading Month (m), and Trading Day (d).
9 / NumberOfInterestDaysBetween2ndInitialAndEndOfQuarter
FF”TT”md / Number of Interest fays between 2nd Initial Invoice and end of quarter by Invoice From Date (F),Invoice From Date Type (F”), Invoice To Date (T), Invoice To Date Type (T”), Trading Month (m), and Trading Day (d).
10 / NumberOfInterestDaysBetweenBeginningOfQuarterAndEndOfQuarter
FF”TT”md / Number of Interest days between beginning of quarter and end of quarter by Invoice From Date (F),Invoice From Date Type (F”), Invoice To Date (T), Invoice To Date Type (T”), Trading Month (m), and Trading Day (d).
11 / NumberOfInterestDaysBetweenBeginningOfQuarterAndTrueUp
FF”TT”md / Number of Interest days between beginning of quarter and true up adjustment by Invoice From Date (F),Invoice From Date Type (F”), Invoice To Date (T), Invoice To Date Type (T”), Trading Month (m), and Trading Day (d).
12 / FERCQuarterlyDailyInterestRate FF”TT”md / FERC quarterly daily Interest rate by Invoice From Date (F),Invoice From Date Type (F”), Invoice To Date (T), Invoice To Date Type (T”), Trading Month (m), and Trading Day (d).
13 / 2ndRequiredFERCInterestRate FF”TT”md / Second required FERC Interest rate by Invoice From Date (F),Invoice From Date Type (F”), Invoice To Date (T), Invoice To Date Type (T”), Trading Month (m), and Trading Day (d).
14 / 3rdRequiredFERCInterestRate FF”TT”md / Third required FERC Interest rate by Invoice From Date (F),Invoice From Date Type (F”), Invoice To Date (T), Invoice To Date Type (T”), Trading Month (m) and Trading Day (d).

3.5Inputs - Predecessor Charge Codes or Pre-calculations

Row # / Variable Name / Predecessor Charge Code/
Pre-calc Configuration
None

3.6CAISO Formula

3.6.1BADayInvoiceDeviationInterestDistributionAmount BU’Umd =

BADayInvoiceDeviationInterestDistribution BU’Umd

3.6.2BADayInitialInvoice1stToMidMonthSupportDataAmount BV’U’UFF”md= BADayInitialInvoice1stToMidMonthAmount BV’U’UFF”md

3.6.3BADayInitialInvoiceMidMonthToEndOfMonthSupportDataAmount BV’U’UFF”md = BADayInitialInvoiceMidMonthToEndOfMonthAmount BV’U’UFF”md

3.6.4BADay1stTrueUpInvoiceSupportDataAmount BV’U’UTT”md = BADay1stTrueUpInvoiceAmount BV’U’UTT”md

3.6.5BADay2ndTrueUpInvoiceSupportDataAmount BV’U’UTT”md= BADay2ndTrueUpInvoiceAmount BV’U’UTT”md

3.6.6NumberOfInterestDaysBetween1stInitialAndTrueUpSupportDataFF”TT”md = NumberOfInterestDaysBetween1stInitialAndTrueup FF”TT”md

3.6.7NumberOfInterestDaysBetween2ndInitialAndTrueUpSupportData FF”TT”md = NumberOfInterestDaysBetween2ndInitialAndTrueupFF”TT”md

3.6.8NumberOfInterestDaysBetween1stInitialAndEndOfQuarterSupportData FF”TT”md = NumberOfInterestDaysBetween1stInitialAndEndOfQuarter FF”TT”md

3.6.9NumberOfInterestDaysBetween2ndInitialAndEndOfQuarterSupportData FF”TT”md = NumberOfInterestDaysBetween2ndInitialAndEndOfQuarter FF”TT”md

3.6.10NumberOfInterestDaysBetweenBeginningOfQuarterAndEndOfQuarterSupportData FF”TT”md = NumberOfInterestDaysBetweenBeginningOfQuarterAndEndOfQuarter FF”TT”md

3.6.11NumberOfInterestDaysBetweenBeginningOfQuarterAndTrueUpSupportData FF”TT”md = NumberOfInterestDaysBetweenBeginningOfQuarterAndTrueUp FF”TT”md

3.6.12FERCQuarterlyDailyInterestSupportDataRate FF”TT”md= FERCQuarterlyDailyInterestRate FF”TT”md

3.6.132ndRequiredFERCInterestSupportDataRate FF”TT”md= 2ndRequiredFERCInterestRate FF”TT”md

3.6.143rdRequiredFERCInterestSupportDataRate FF”TT”md = 3rdRequiredFERCInterestRate FF”TT”md

3.7Outputs

Output Req. ID / Name / Description
All external inputs shall be included as outputs.
1 / BADayInvoiceDeviationInterestDistributionAmount BU’Umd / The total amount of interest to be paid to the Market Participant due to a negative Invoice deviation by Business Associate ID (B) Bill Period Start (U’), Bill Period End (U), Trading month (m), and Trading Day (d).
2 / BADayInitialInvoice1stToMidMonthSupportDataAmount BV’U’UFF”md / Amount of the first initial Invoice issued to the Market Participant for the period 1st through the 15th of the month by Business Associate ID (B), Invoice Reference Number (V’), Bill Period Start (U’), Bill Period End (U), Invoice From Date (F), Invoice From Date Type (F”), Trading Month (m), and Trading Day (d).
3 / BADayInitialInvoiceMidMonthToEndOfMonthSupportDataAmount BV’U’UFF”md / Amount of the second initial Invoice issued to the Market Participant for the period 16th through the endof the month by Business Associate ID (B), Invoice Reference Number (V’), Bill Period Start (U’), Bill Period End (U), Invoice From Date (F) Invoice From Date Type (F”), Trading Month (m), and Trading Day (d).
4 / BADay1stTrueUpInvoiceSupportDataAmount BV’U’UTT”md / Amount of the 1st true-up adjustment issued to the Market Participant at T+38B for the period 1st through the endof the month by Business Associate ID (B), Invoice Reference Number (V’), Bill Period Start (U’), Bill Period End (U), Invoice To Date (T) Invoice To Date Type (T”), Trading Month (m), and Trading Day (d).
5 / BADay2ndTrueUpInvoiceSupportDataAmount BV’U’UTT”md / Amount of the 2nd true-up adjustment issued to the Market Participant at T+76B for the period 1st through the endof the month by Business Associate ID (B), Invoice Reference Number (V’), Bill Period Start (U’), Bill Period End (U), Invoice To Date (T) Invoice To Date Type (T”), Trading Month (m), and Trading Day (d).
6 / NumberOfInterestDaysBetween1stInitialAndTrueUpSupportData FF”TT”md / Number of Interest days between 1stinitial Invoice and true up adjustment by Invoice From Date (F),Invoice From Date Type (F”), Invoice To Date (T), Invoice To Date Type (T”), Trading Month (m), and Trading Day (d).
7 / NumberOfInterestDaysBetween2ndInitialAndTrueUpSupportData FF”TT”md / Number of Interest days between 2nd initial Invoice and true up adjustment by Invoice From Date (F),Invoice From Date Type (F”), Invoice To Date (T), Invoice To Date Type (T”), Trading Month (m), and Trading Day (d).
8 / NumberOfInterestDaysBetween1stInitialAndEndOfQuarterSupportData FF”TT”md / Number of Interest days between 1st initial Invoice and end of quarter by Invoice From Date (F),Invoice From Date Type (F”), Invoice To Date (T), Invoice To Date Type (T”), Trading Month (m), and Trading Day (d).
9 / NumberOfInterestDaysBetween2ndInitialAndEndOfQuarterSupportData FF”TT”md / Number of Interest days between 2nd initial Invoice and end of quarter by Invoice From Date (F),Invoice From Date Type (F”), Invoice To Date (T), Invoice To Date Type (T”),Trading Month (m), and Trading Day (d).
10 / NumberOfInterestDaysBetweenBeginningOfQuarterAndEndOfQuarterSupportData FF”TT”md / Number of Interest days between beginning of quarter and end of quarter by Invoice From Date (F),Invoice From Date Type (F”), Invoice To Date (T), Invoice To Date Type (T”), Trading Month (m), and Trading Day (d).
11 / NumberOfInterestDaysBetweenBeginningOfQuarterAndTrueUpSupportData FF”TT”md / Number of Interest days between beginning of quarter and true up adjustment by Invoice From Date (F),Invoice From Date Type (F”), Invoice To Date (T), Invoice To Date Type (T”),Trading Month (m), and Trading Day (d).
12 / FERCQuarterlyDailyInterestSupportDataRate FF”TT”md / FERC quarterly daily Interest rate by Invoice From Date (F),Invoice From Date Type (F”), Invoice To Date (T), Invoice To Date Type (T”), Trading Month (m), and Trading Day (d).
13 / 2ndRequiredFERCInterestSupportDataRate FF”TT”md / Second required FERC Interest rate by Invoice From Date (F),Invoice From Date Type (F”), Invoice To Date (T), Invoice To Date Type (T”), Trading Month (m), and Trading Day (d).
14 / 3rdRequiredFERCInterestSupportDataRate FF”TT”md / Third required FERC Interest rate by Invoice From Date (F),Invoice From Date Type (F”), Invoice To Date (T), Invoice To Date Type (T”), Trading Month (m), and Trading Day (d).

4.Charge Code Effective Date

Charge Code/
Pre-calc Name / Document Version / Effective Start Date / Effective End Date / Version Update Type
Invoice Deviation Interest Distribution (CC 7989) / 5.0 / 11/01/09 / Open / Configuration Impacted
CAISO, 2018 / Page 1 of 14

[1]Capitalized terms in this Configuration Guide have the same meaning as set forth in (i) CAISO Tariff, Appendix A, Master Definitions Supplement, (ii) the BPM for Settlements and Billing, Section 8.2, Sign & Subscript Conventions, or (ii) this Configuration Guide.