COMS/Settlements/Credit

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COMS/Settlements/Credit

Weekly Update

May 14, 2010


Antitrust Admonition

ANTITRUST ADMONITION

ERCOT strictly prohibits Market Participants and their employees who are participating in ERCOT activities from using their participation in ERCOT activities as a forum for engaging in practices or communications that violate the antitrust laws. The ERCOT Board has approved guidelines for members of ERCOT Committees, Subcommittees and Working Groups to be reviewed and followed by each Market Participant attending ERCOT meetings. If you have not received a copy of these Guidelines, copies are available at the Client Relations desk. Please remember your ongoing obligation to comply with all applicable laws, including the antitrust laws.

DISCLAIMER

All presentations and materials submitted by Market Participants or any other Entity to ERCOT staff for this meeting are received and posted with the acknowledgement that the information will be considered public in accordance with the ERCOT Websites Content Management Operating Procedure.


Agenda

• Anti-trust Admonition

• Standing Reports and Updates– Operating Day Settlement Reports– Week in Review/General Reminders– Next Week’s Activities

• Environment Report– Known Issues

• Credit

• Question and Answers / General Discussion

ERCOT asks that Market Participants log into the WebEx session using their company name and then their name. This will allow ERCOT to take roll-call offline


DAM Settlement Overview for May 7

Statement and Invoice Overview

• 190 Statements/Invoices posted to QSEs

• 49 Statements/Invoices posted to CRRAHs

• 28 QSEs received Statements/Invoices for $0

CRR Overview

• There were no CRR Derations

• CRR Owners were fully funded (i.e. there were no Short Fall Charges)

General Reminders/Updates

• Submit any questions/issues about statements, invoices, extracts or calculations to [email protected]

Operating Date 5/7/2010 DAM Settlement Totals

Day Ahead Energy

Day Ahead Energy Sales -$24,649,369.13

Day Ahead Energy Purchases $27,112,948.77

PTP Obligation Bought in the DAM $6,266.00

RMR Day Ahead Energy Reveue Total -$14,877.60

Day Ahead Congestion Rent $2,454,968.04

Day Ahead Make Whole

Day Ahead Make Whole Payments -$56,572.55

Day Ahead Make Whole Charge $56,572.43

Day Ahead Ancillary Services

Non-Spin Reserve Payment -$50,592.67

Non-Spin Service Charge $50,592.49

Regulation Down Payment -$252,911.62

Regulation Down Charge $252,911.66

Responsive Reserve Payment -$629,437.30

Responsive Reserve Charge $629,437.51

Regulation Up Payment -$210,573.51

Regulation Up Charge $210,573.54

Day Ahead CRR

Day Ahead Obligation -$415,347.58

Day Ahead Obligation with Refunds $0.00

Day Ahead Option -$648,256.09

Day Ahead Option with Refunds $0.00

Short Fall Charges to CRR Owners $0.00

Balancing Account Credit $1,391,364.37


DAM Settlement Overview for May 12

Statement and Invoice Overview

• 204 Statements/Invoices posted to QSEs

• 49 Statements/Invoices posted to CRRAHs

• 45 QSEs received Statements/Invoices for $0

CRR Overview

• There were CRR derations

• CRR Owners were fully funded (i.e. there were no Short Fall Charges)

General Reminders/Updates


Operating Date 05/12/2010 DAM Settlement Totals

Day Ahead Energy

Day Ahead Energy Sales -$17,396,798.13

Day Ahead Energy Purchases $19,807,290.99

PTP Obligation Bought in the DAM $299,690.94

Day Ahead Congestion Rent $2,710,183.80

Day Ahead Make Whole

Day Ahead Make Whole Payments -$133,543.33

Day Ahead Make Whole Charge $133,543.53

Day Ahead Ancillary Services

Non-Spin Reserve Payment -$217,519.43

Non-Spin Service Charge $217,519.46

Regulation Down Payment -$183,084.13

Regulation Down Charge $183,084.15

Responsive Reserve Payment -$597,433.28

Responsive Reserve Charge $597,433.48

Regulation Up Payment -$241,219.02

Regulation Up Charge $241,218.99

Day Ahead CRR

Day Ahead Obligation -$501,572.68

Day Ahead Obligation with Refunds $0.00

Day Ahead Option -$1,114,013.81

Day Ahead Option with Refunds $0.00

Short Fall Charges to CRR Owners $0.00

Balancing Account Credit $1,094,597.31


RTM Settlement Overview for April 28

Statement Overview

• 231 Statements posted to QSEs

• 3 Statements posted to CRRAHs

• 37 QSEs received Statements for $0

Charge Type Overview

• No RUC Make-Whole payments or Capacity Short Charges

• RUC Clawback was charged

• No RMR Standby Payments due to RMR Contract Set-Up Issues (Estimated Monthly Costs not correctly loaded)

General Reminders


Real-Time Energy Imbalance $113,834.27

Block Load Transfer Resource $0.00

Real-Time DCTIE import $0.00

Real-Time DCTIE export $0.00

Real-Time Congestion Payment or Charge $9,240.78

Real-Time PTP Obligation -$12,372.35

Real-Time Revenue Neutrality Allocation -$109,689.86

Base Point Deviation Charge $965,893.39

Base-Point Deviation Payment -$965,893.35

Real-Time Option w ith Refund -$0.02

Real-Time Option -$1,013.70

Real-Time CRR Ow ners Shortfall Charges $0.00

Black Start Service Payment -$17,793.36

Black Start Service Charge $17,793.32

SASM Reg Dow n Payment $0.00

Reg Dow n Failure to Provide Charge $0.00

Real Time Reg Dow n Adjustment Charge $0.20SASM Non-Spin Payment -$604.60

Non-Spin Failure to Provide Charge $0.00

Real Time Non-Spin Adjustment Charge $604.64

SASM Reg Up Payment $0.00

Reg Up Failure to Provide Charge $0.00Real Time Reg-Up Adjustment Charge -$0.03SASM Responsive Reserve Payment $0.00

Responsive Reserve Failure to Provide Charge $0.00

Real Time Responsive Reserve Adjustment Charge $0.21

RUC Claw back Charge $10,952.90

RUC Claw back Payment -$10,952.74

RUC Decommitment Payment $0.00

RUC Decommitment Charge $0.00

RUC Make-Whole Payment $0.00

RUC Capacity-Short $0.00

RUC Make-Whole Uplift Charge $0.00

ERCOT System Administration Charge $314,488.14

QSE Nodal Surcharge Fee $122,148.09

Operating Date 4/28/2010 RTM Settlement Totals

Real Time Energy

Real-Time CRR

Base Point Deviation

RUC

Black Start

Administrative Fees

Real-Time Ancillary Services


RTM Settlement Overview for April 30

Statement Overview

• 225 Statements posted to QSEs

• 3 Statements posted to CRRAHs

• 43 QSEs received Statements for $0

Charge Type Overview

• RUC Make-Whole Payments were calculated. All of the costs were assigned through the Capacity Short Charge

General Reminders


Real-Time Energy Imbalance $48,346.40Block Load Transfer Resource $0.00

Real-Time DCTIE import $0.00Real-Time DCTIE export $0.00Real-Time Congestion Payment or Charge $0.00Real-Time PTP Obligation $63.91Real-Time Revenue Neutrality Allocation -$48,368.53

Base Point Deviation Charge $1,277,112.49Base-Point Deviation Payment -$1,277,112.61

Real-Time Option w ith Refund -$0.56Real-Time Option -$42.41Real-Time CRR Ow ners Shortfall Charges $0.00

Black Start Service Payment -$17,793.36Black Start Service Charge $17,793.37

RMR Standby Payment -$285,339.60RMR Energy Payment $0.00RMR Adjustment Charge $0.00RMR Unexcused Misconduct Charge $0.00RMR Service Charge $285,339.70

SASM Reg Dow n Payment $0.00Reg Dow n Failure to Provide Charge $0.00Real Time Reg Dow n Adjustment Charge -$0.16

SASM Non-Spin Payment -$1,059.84Non-Spin Failure to Provide Charge $0.00Real Time Non-Spin Adjustment Charge $1,059.33SASM Reg Up Payment $0.00Reg Up Failure to Provide Charge $0.00Real Time Reg-Up Adjustment Charge -$0.30SASM Responsive Reserve Payment $0.00Responsive Reserve Failure to Provide Charge $0.00Real Time Responsive Reserve Adjustment Charge $0.15

RUC Claw back Charge $53,450.29

RUC Claw back Payment -$53,448.07RUC Decommitment Payment $0.00RUC Decommitment Charge $0.00RUC Make-Whole Payment -$62,884.66RUC Capacity-Short $62,884.51RUC Make-Whole Uplift Charge $0.00

ERCOT System Administration Charge $349,359.58QSE Nodal Surcharge Fee $135,625.29

Operating Date 4/30/2010 RTM Settlement Totals

Real Time Energy

Real-Time CRR

Base Point Deviation

RUC

Black Start

Administrative Fees

RMR

Real-Time Ancillary Services

Week in Review

• RTMMODE Extracts missing bill determinant.– The RTMMODE Extracts are missing the RTRMPR bill determinant needed to

shadow the Real-Time Energy Imbalance charge– The issue has been fixed and RTRMPR will be available in the Real Time Extracts

for Operating Days 5-5 and 5-7

• Operating Day 5-13 will not be settled– The DAM was not executed for this operating date so it was removed as a supported

operating date for Settlement



Next Week’s Activities

• 5/19 Op Day– DAM Statements and Invoices posted on 5/21

– RTM Initial Statement posted on 6/1





• COMS Extracts (DAMMODE, DAMCODE, RTMMODE, RTMCODE)– For 5/12 DAM Settlement will be posted on Sunday 5/16

– For 5/14 DAM Settlement will be posted on Thursday 5/20

– For 5/5 and 5/7 RTM Initial Settlement will be posted on Wednesday 5/19

• REMINDER: The Settlements Calendar Extract contains all statement and invoice posting dates.

Environment Report-Known Issues

COMS New Known Issues• RTRMPR bill determinant was not published in Settlements Extracts for operating dates

4-21, 4-23, 4-28 and 4-30. The issue has been resolved and the bill determinant will be available in the RTMMODE extracts for Operating day 5-5 going forward. Without this bill determinant, QSEs will be unable to shadow the Real Time Energy Imbalance Charge/Payment at Resource Nodes

Reminder: ERCOT will post known issues every Friday to the readiness center at: http://nodal.ercot.com/readiness/markettrials/coms/index.html

COMS Closed Issues

• No New Closed Issues


Settlements FAQS

Q: How do I determine the column names and mapping in the CODE and MODE Extracts

A: DDLs and XSDs are available on the reports section of the readiness center and define the column names and tables in the extracts. The Draft Settlement DDL Join Document v0.01 will explain column and table joins in the CODE and MODE extracts and to reference data. The PRDE Extract contains all of the reference data that is mapped to the tables in the DAM and RTM CODE and MODE extracts.

http://nodal.ercot.com/readiness/reports/index.html



Credit and Treasury

Weekly Update

May 14, 2010

Last Week

• ERCOT Client Reps sent Digital Certificates for CPs with QSEs only

– All CPs should now be able to access their Credit Reports on MIS

• ERCOT Client Reps reaching out to CPs to obtain Credit and Treasury contacts

– If you haven’t provided contacts, please send to [email protected]

• ERCOT Credit assigned initial credit limits as described on last week’s call and adjusted credit limits based on “e-cash” received from CPs.

• ERCOT posts first set of Credit Reports on Friday, May 14th

• ERCOT sends first ACL to CRR and DAM


Credit Monitoring and Management

• Credit limits are intended to ensure that CRR and DAM activity is within collateral /credit constraints

– Collateral is “pooled” for efficiency, therefore, collateral must be sufficient to cover credit exposure as well as desired activity in both the CRR and DAM auctions

– Credit exposure (TPE) is calculated as defined in Protocol Section 16• Intended to capture a) estimates of historical activity and b) projected future activity

• Data included in credit exposure calculations is based on each CP’s activity in MT5 so far

– Initially, data may have gaps. Credit exposure will “fill in” over the next several weeks.– May or may not be indicative of “normal” activity depending on what kind of testing CP

has been doing– The more realistic the data, the more realistic the credit calculations

• CPs should begin using more realistic estimates in their market activity to produce more realistic exposure calculations


Credit Monitoring and Management

– Data used in credit calculations and reporting is based on • RTM Statements and Invoices generated on 5/13/2010 and forward• DAM Statements and Invoices generated from 5/13/2010 and forward• Exposure may include activity for non-market operating days based on

settlements testing data as it becomes available• Real Time Exposure Estimates for non-invoiced days will gradually be included

starting from 5/14/2010 as they become available• CRR Ownership as of 5/13/2010 and updated as ownership information

changes due to new CRR Auctions or CRR Bilateral Trades• Initial Collaterals as set by ERCOT and updates to collateral will be made as

requested by Counter-Parties• Invoices/Refunds will be automatically be paid on Due Dates.


Next Week

ERCOT will

– Post Credit Reports twice a day • Three detail Credit Reports will not be posted initially – see Known Issues• Final reports will include intra-day updates and be posted end of day

– Process intra-day updates to include:• Invoices and statements received by noon

• Posted collateral and invoice payments received by noon

– Noon deadline will be moved until 3:00 pm on Monday, May 17

• Approved CRR bilateral trades (this will begin after May 18)

• Exposure (TPE) adjustments, if any

– Send ACL to CRR and DAM

– Send collateral calls to Counter-Parties (CP) as necessary

– Process e-cash payments as received

– Process CRR bilateral trades• There are currently over 100 trades pending.

• ERCOT will begin processing these after May 18 to reduce confusion around the initial CRR and DAM ACL


Next Week

Challenge – kick off for CMM coincides with running both the CRR auction and DAM auction

Counter-Parties should

• Access their Credit Reports

– Review the calculations to confirm they reflect their MT5 activity

– Ensure their ACL is adequate for their intended CRR and DAM auction activity

• If CPs wish to have a higher limit, they should send “e-cash” as described in last week’s call

• Ensure that the credit limit they input into the CRR system for the CRR auction is within your 90% ACL


Next Week

As a reminder from last week:– If a CP’s TPE exceeds its TCL/collateral, a collateral request will be issued

• During the first few weeks of MT5, ERCOT Credit will adjust TPE to ensure that one-third to one-half of TCL is available for the DAM and CRR auction

– If the CRR auction takes all of the ACL, there will be no credit available for the DAM auction

• During the first few weeks of MT5, if most of the 90% ACL is used by CRR Auction, ERCOT Credit will adjust ACL for DAM to ensure that at least one-third to one-half of 90 % ACL is available for the DAM

If you have questions, please send them to [email protected]


Known Issues


Exposure calculation issue– For CPs having credits in ADTE (from Real Time Market)

• ADTE is incorrectly reflecting a “0” value rather than a credit value, overstating TPE exposure

• Work around is being developed

Reports not available at this time– FCE detail reports will not be posted due to large volume of data (several hundreds

of pages per report)– AIL detail report will not be posted due to data issue on report (calculated AIL in TPE

is correct)

Minor report display issue– FCE Summary Reports – section subtotals are incorrect (however, totals at the top

of the section and calculated values used in TPE are correct) – display issue only

Appendix – Materials from May 7 Market Call


Available Credit Limit (ACL) – Workflow

• Available Credit Limit

21

Credit Limits

• Total Credit Limits (TCL) are assigned at the CP level only

– TPE (Total Potential Exposure) includes a) QSE exposure (real time, DAM, etc)b) CRR exposure

– TPE will be “net” against your TCL to determine your ACL (Available Credit Limit) 90% of ACL will be available for the DAM and CRR

• Nodal Credit Training materials can be accessed from the following link.– http://nodal.ercot.com/readiness/markettrials/coms/index.html



Credit Limits

• ERCOT Credit has assigned initial TCL (Total Credit Limit)/collateral for each Counter-Party (CP) using the following TCL buckets:

• $2 Million• $10 Million• $30 Million• $60 Million• $90 Million• $120 Million

– Assignment of TCL will be based on an evaluation of current zonal QSE activity levels and multiplied by two (2) to allow for the CRR auction

– The initial assignment may be changed up or down by the CP; ERCOT has processed two to date. Collateral process described in following slides.

– Please note that Counter-Party certificate with CRR_EXTRACTS role is required to access Credit Reports related to QSE/sub-QSE/CRRAH in your portfolio (e.g. TPE and ACL)

Credit Limits

• CPs are strongly encouraged to involve their credit and treasury staff and actively monitor their exposure and manage their collateral/credit limits

– If a CP’s TPE exceeds its TCL/collateral, a collateral request will be issued• During the first few weeks of MT5, ERCOT Credit will adjust TPE to ensure that one-third to one-

half of TCL is available for the DAM and CRR auction

– If the CRR auction takes all of the ACL, there will be no credit available for the DAM auction

• During the first few weeks of MT5, if most of the 90% ACL is used by CRR Auction, ERCOT Credit will adjust ACL for DAM to ensure that at least one-third to one-half of 90 % ACL is available for the DAM

– If CP has any outstanding collateral requests, ACL will be set to zero and CP cannot participate in the DAM and CRR auctions



• To increase or reduce credit limit:– CP can make collateral payments to increase credit limit (in response to a

collateral request or thru ad hoc submission)– CP can request a refund of collateral – All collateral transactions are e-mails

• Collateral Payments from Counter-Party to ERCOT– Counter-Party making a Collateral Payment or requesting a Collateral

Refund/Reduction will send an e-mail to [email protected] to indicate that payment is made (e-mail templates provided)

• Collateral Payments (e-mail) received by ERCOT– by noon will be processed same day and will be reflected in the ACL for the

following morning– On the first day of MT5, collateral payment e-mails will be taken beyond

noon to the extent we can and still meet the deadline for sending the ACLs – after noon will be processed same day but will not be reflected in ACL for the

following morning

Credit Limits


Collateral Payment Email template:

Subject:

Credit Nodal Collateral Payment to ERCOT (Cash)

Body:

Counter-Party ID: #########9999

Counter-Party Name: xxxxxxxxxxxxxxxxxxxxxx

Collateral Payment Amount: ##########.##

Treasury or credit contact (Name, phone number, e-mail address)

Credit Limits


Collateral Refund Request Email template:

Subject:

Credit Nodal Collateral Refund Request (Cash)

Body:

Counter-Party ID: #########9999

Counter-Party Name: xxxxxxxxxxxxxxxxxxxxxx

Collateral Refund Request Amount: ##########.##

Treasury or credit contact (Name, phone number, e-mail address)

Credit Limits


Timelines

• Available Credit Limit (ACL)– Initial TCL set by ERCOT Credit will be reflected– ERCOT will confirm the availability of the ACLs and reports on the Monday 10AM Kick Off

call

• Exposure reports to be published– ACL Summary– TPE Summary– Exposure details except for FCE details

• Please note that in order to access your ACL and credit reports, you will need to use your Counter-Party (CP) certificate with CRR_Extracts assigned

• Anyone in possession of your CP certificate can see all sub-QSE and CRRAH credit reports in your portfolio (e.g. TPE and ACL)

• In order to obtain a Counter Party certificate:• Your MP USA (User Security Administrator) must download the main Counter Party

USA certificate• The certificate must have the CRR_EXTRACTS role assigned to it in order to view

Credit Reports and ACL• The USA can now create individual user certificates using the Counter Party DUNs• Please note that users with this certificate will have access to view all CRRAH and

Sub-QSE credit information• For MPs that do not have a Counter Party USA certificate, those will be sent by

ERCOT next week

• CRR bilateral trade requests will be processed when available from CRR

Documents

COMS/Settlements/Credit