Configuration Guide for: CRR Balancing Account Accrued Interest Allocation / Date: 059/219/109
Settlements & Billing
BPM Configuration Guide: CRRBA Accrued Interest Allocation
CC 6791
Version 5.10
ÓCAISO, 2010 / Page 2 of 8Settlements & Billing / Version: 5.01
Configuration Guide for: CRR Balancing Account Accrued Interest Allocation / Date: 059/219/109
Table of Contents
1. Purpose of Document 3
2. Introduction 3
2.1 Background 3
2.2 Description 4
3. Charge Code Requirements 4
3.1 Business Rules 4
3.2 Predecessor Charge Codes 5
3.3 Successor Charge Codes 5
3.4 Inputs – External Systems 5
3.5 Inputs - Predecessor Charge Codes or Pre-calculations 6
3.6 CAISO Formula 6
3.7 Outputs 7
4. Charge Code Effective Date 8
1. Purpose of Document
The purpose of this document is to capture the requirements and design specification for a SaMC Charge Code in one document.
2. Introduction
2.1 Background
Consistent with the adoption of Locational Marginal Pricing (LMP) under the new market design in place of zonal pricing under the current zonal market design, the current congestion hedging instrument, Firm Transmission Rights (FTR), will be replaced with a new instrument called Congestion Revenue Rights (CRRs). In effect, zones will be eliminated and the new instrument will make use of CRR Source(s) and CRR Sink(s) that are based on Nodes or group of Nodes.
FERC orders have approved the ISO’s proposal to allocate CRRs to Load-Serving entities (LSEs) that serve customers located within the ISO Control Area, and to certain other parties described in the CAISO white paper on CRR Allocation Rules. “The central principle behind allocation of CRRs to LSEs serving internal customers is that these customers have supported and continue to support the embedded costs of the transmission system through their payment of access charges, which entitles them to utilize the grid to bring power from their power sources to the points where they take power off the grid without being exposed to additional charges for such use of the grid. This principle is made operational by allocating financial hedging instruments – CRRs – that enable the LSE to hedge the charges for grid Congestion that will be assessed in their regular Settlements with the ISO.” [CAISO White Paper: CRR Allocation Rules, 06/14/05]
CRRs may come from allocations by CAISO, given free of charge to select market participants. CRRs may also come from auctions by CAISO for any remaining available CRR capacities after the allocations. CRRs from auctions are bought at a Market Clearing Price. Furthermore, the CRRs can be subdivided and can be traded in the secondary market but no new CRRs will be released by CAISO in the secondary market.
CAISO conducts an annual CRR Allocation once a year for the entire year. The annual CRR Allocation releases Seasonal CRRs for four seasonal periods. The CAISO also conducts monthly CRR Allocation twelve times a year in advance of each month. In addition, CAISO also conducts yearly and monthly CRR Auctions which can release monthly as well as seasonal CRRs. There is also a special type of CRRs - the Long-Term CRRs (LT-CRR) – which have a validity of ten years as opposed to the short–term ones. These LT-CRRs are seasonal in nature and are released via the annual CRR allocation process but not through CRR Auction.
Ownership of a CRR may change hands. However, only one entity can own the CRR in any Trading Hour and CAISO will settle with that owner.
The CRR charge codes, consisting of CC 6798 (CRR Auction Transaction Settlement), CC 6700 (CRR Hourly Settlement), CC 6790 (CRR Balancing Account), and CC 6791 (CRRBA Accrued Interest Allocation) shall conform to the Tariff language on CRR Settlements (Section 11.2.4) and Full Funding of CRRs (Section 36.2.8).
CC 6700 settles the entitlement amounts (payments and charges) of all valid CRR holdings for each Trading Hour. This is funded by the CRR Balancing Account (CC 6790). The CRRBA is a daily account consisting of the IFM Congestion Fund, which is composed of hourly congestion revenues from Day-Ahead AS imports and Energy schedules and of CRR Charges. In addition, the CRRBA contains the net revenues from CRR Auctions applicable to each day. At the end of each day, the CRRBA is cleared through distribution of surplus or allocation of shortfall to Measured Demand excluding Measured Demand associated with valid ETC, TOR, and CVR Self-Schedules. Furthermore, at each month-end, accrued interest from investment of auction revenues shall be allocated to monthly Measured Demand excluding Measured Demand associated with valid ETC, TOR, and CVR Self-Schedules.
2.2 Description
The net proceeds from CRR Auctions are put into CRR Balancing Accounts. For cash management purposes, the CAISO Finance Department maintains an interest-bearing investment account for these CRR Auction net proceeds. The interest is accounted for on a monthly basis. The accrued interest is forwarded to the relevant monthly CRRBA accrued interest fund to be allocated to monthly Measured Demand excluding Measured Demand associated with valid ETC, TOR, and CVR Self-Schedules.
This Charge Code will be implemented pursuant to a configuration enhancement procedure that allows for gains in performance, thereby reducing the volume of calculations executed during the monthly Settlement Run. The outcome of this feature is not published on the monthly Settlements Statements issued to participants. However, this enhancement procedure has no impact on the actual calculation of the settlement amounts determined by this Charge Code. The performance enhancement is achieved through the availability of a feature that makes the results of (previously calculated) daily Settlement Runs available during to the CAISO operator for the monthly run in lieu of the operator having to re-execute daily calculations within the monthly Settlement Run. Additionally, this feature will provide the CAISO operator monthly totals of (previously calculated) daily outputs as well as monthly totals of primary bill determinants as needed. The CAISO will notify participants of which Charge Code uses this feature by including this statement in the description of the affected Charge Codes. In addition, the CAISO will indicate in the CAISO formula section of applicable Configuration Guides which of the individual calculations within the monthly run utilize this feature.Participants can verify the Settlement Amounts resulting from this Charge Code in their monthly calculations by utilizing the daily input data as defined in the input sections of each Charge Code, the amounts and/or quantities of which are published on the relevant, daily Settlement Statements.
3. Charge Code Requirements
3.1 Business Rules
.
Bus Req ID / Business Rule /1.0 / The charge code allocates the accrued interest from CRR Auction revenues put in the CRR Balancing Account to monthly Measured Demand excluding the valid and balanced portion of TOR/ETC/CVR Self-Schedules for which IFM and RTM Congestion credits were provided.
1.1 / This Charge Code is settled on a monthly basis.
2.0 / Net proceeds from the yearly CRR Auction accrue monthly interest when held by CAISO for more than a month, for these auction proceeds are invested.
2.1 / For cash management purposes, the Finance Department maintains an interest-bearing bank account for any CRR revenues that are expected to be held by CAISO for more than a month prior to clearing. In particular, the accrued monthly interest from net proceeds of CRR Auctions that are held by CAISO for more than a month shall be posted by Finance for use in this Charge Code. Accrued interest shall be provided separately for each month.
2.2 / Each CRRBA monthly accrued interest account is separate and each is completely cleared at the end of the relevant month.
2.3 / Clearing of CRRBA monthly accrued interest account:
At the end of the month, the relevant accrued interest for the CRRBA daily accounts of the same month shall be allocated to monthly Measured Demand excluding the valid and balanced portion of TOR/ETC/CVR Self-Schedules for which IFM and RTM Congestion credits were provided.
3.2 Predecessor Charge Codes
Charge Code/ Pre-calc Name /CC 6790 – CRR Balancing Account
3.3 Successor Charge Codes
Charge Code/ Pre-calc Name /None
3.4 Inputs – External Systems
Row # / Variable Name / Description /1 / PTBCAISOMonthlyCRRBAAccruedInterestAmt Jm / Amount provided by Finance/Accounting for the monthly accrued interest of cash from net proceeds of CRR Auction that were put in an interest bearing account. This amount goes to the relevant CRRBA monthly account. The PTB input is provided having the PTB ID J for Trading Month m.
3.5 Inputs - Predecessor Charge Codes or Pre-calculations
Row # / Variable Name / Predecessor Charge Code/Pre-calc Configuration /
1 / CAISOTotalDailyMeasuredDemandMinusRightsControlAreaQty_CRRBA_BQ mdh / CC 6790 – CRR Balancing Account
2 / BADailyMeasuredDemandMinusRightsControlAreaQty_CRRBA_BQ Bmdh / CC 6790 – CRR Balancing Account
3.6 CAISO Formula
3.6.1 BAMonthlyCRRBAAccruedInterestAllocationAmount Bm =
(-1)* BAMonthlyMeasuredDemandControlAreaQty_CRRBA_BQ Bm * CAISOMonthlyCRRBAAccruedInterestAllocationPrice Bm
3.6.1.1 BAMonthlyMeasuredDemandControlAreaQty_CRRBA_BQ Bm =
BADailyMeasuredDemandMinusRightsControlAreaQty_CRRBA_BQ Bmd
Note:
The BADailyMeasuredDemandMinusRightsControlAreaQty_CRRBA_BQ Bmd
is provided by the configuration enhancement procedure that returns the monthly quantity as a summation of daily BADailyMeasuredDemandMinusRightsControlAreaQty_CRRBA_BQ generated previously from daily settlement calculation results for the applicable Trading Month.
3.6.2 CAISOMonthlyCRRBAAccruedInterestAllocationPrice m =
IF
CAISOTotalMonthlyMeasuredDemandControlAreaQty_CRRBA_BQ m > 0
THEN
CAISOMonthlyCRRBAAccruedInterestAllocationPrice m =
(CAISOMonthlyCRRBAAccruedInterestAmount m
/ CAISOTotalMonthlyMeasuredDemandControlAreaQty_CRRBA_BQ m )
ELSE
CAISOMonthlyCRRBAAccruedInterestAllocationPrice m = 0
END IF
3.6.2.1 Where CAISOTotalMonthlyMeasuredDemandControlAreaQty_CRRBA_BQ m =
CAISOTotalDailyMeasuredDemandMinusRightsControlAreaQty_CRRBA_BQ md
Note:
The CAISOTotalDailyMeasuredDemandMinusRightsControlAreaQty_CRRBA_BQ md
is provided by the configuration enhancement procedure that returns the monthly quantity as a summation of daily CAISOTotalDailyMeasuredDemandMinusRightsControlAreaQty_CRRBA_BQ generated previously from daily settlement calculation results for the applicable Trading Month.
3.6.2.2 CAISOMonthlyCRRBAAccruedInterestAmount m =
PTBCAISOMonthlyCRRBAAccruedInterestAmt Jm
3.7 Outputs
Row # / Name / Description /In addition to any outputs listed below, all inputs shall be included as outputs.
1 / BAMonthlyCRRBAAccruedInterestAllocationAmount Bm / The payment or charge to Business Associate B in order to clear the CRRBA Accrued Interest monthly account for Trading Month m.
2 / CAISOMonthlyCRRBAAccruedInterestAllocationPrice m / The allocation rate to obtain the BAMonthlyCRRBAAccruedInterestAllocationAmount Bm.
3 / CAISOMonthlyCRRBAAccruedInterestAmount m / The accrued interest from investment of CRR Auction net revenues, which were allocated to daily CRRBA accounts within Trading Month m.
4 / BAMonthlyMeasuredDemandControlAreaQty_CRRBA_BQ Bm / The applicable monthly Measured Demand eligible for CRRBA Accrued Interest allocation.
5 / CAISOTotalMonthlyMeasuredDemandControlAreaQty_CRRBA_BQ m / The CAISO total applicable hourly Measured Demand eligible for CRRBA Accrued Interest allocation.
ÓCAISO, 2010 / Page 2 of 8
Settlements & Billing / Version: 5.01
Configuration Guide for: CRR Balancing Account Accrued Interest Allocation / Date: 059/219/109
4. Charge Code Effective Date
Charge Code/Pre-calc Name / Document Version / Effective Start Date / Effective End Date / Version Update Type /
CC 6791 - CRRBA Accrued Interest Allocation / 5.0 / 11/01/09 / Open10/31/09 / Configuration Impacted
CC 6791 - CRRBA Accrued Interest Allocation / 5.1 / 11/01/09 / Open / Configuration Impacted
ÓCAISO, 2010 / Page 2 of 8