Texas Nodal

Section 9:

Invoicing

ERCOT, Settlements & Billing

SDAWG - August 2007

Texas Nodal

Outline

• Settlement and Billing Process Overview• DAM Invoice• DAM Late Fee Invoice• RTM Invoice• RTM Late Fee Invoice• RTM Uplift Invoice• CRR Auction Invoice• CRR Auction Revenue Disbursement Invoice• CRR Balancing Account Invoice• Miscellaneous Invoices• Market Comparisons: Current, DAM and RTM

Texas Nodal

Settlement & Billing Process Overview

ERCOT Settlements & Billing must:• Resolve financial obligations between Market

Participants and ERCOT;• Post and maintain a “Settlement Calendar” to denote:

– Statement issue dates– Invoice issue dates– Payment due dates– Dispute deadline dates;

• Post Statements and Invoices electronically• Publish Statements and Invoices no later than 2400 on

their scheduled issue date; and• Reflect payment conventions as:

– Negative amount representing a payment due to recipient by ERCOT

– Positive amount representing a payment due ERCOT by recipient

Texas Nodal

DAM Settlements – DAM Invoices

• DAM Invoices are issued for each Settlement Statement for the DAM (DAM Statement and DAM Resettlement Statement).

• DAM Invoices for DAM Statements are issued by 2400 on the 2nd Business Day after the Operating Day.

• DAM Invoices for DAM Resettlement Statements are issued by 2400 on the same Business Day as the DAM Resettlement Statement is posted to the MIS Certified Area.

Texas Nodal

DAM Settlements – DAM Invoices

Each DAM Invoice must contain;

• Net amount due or payable;• Time period covered for each item;• Date in which the DAM Invoice was issued;• Unique number generated by ERCOT for payment

tracking purposes;• Identification code used to reference the Settlement

Statement invoiced;• Date and time that DAM Invoice amounts must be paid

or received;• Remittance information details; and• Overdue terms.

Texas Nodal

DAM Settlements – Late Fee Invoices

• Short-paying DAM Invoice Recipients are charged late fees by ERCOT on the short-pay amount for each day that the amount is unpaid (Late Fee Charges).

Late Fee CHq = Unpaid Balanceq * ((Current Prime Rate + 2%) / 365)

• ERCOT will distribute late fee revenues to the DAM Invoice Recipients who were underpaid, for each day that they are underpaid, on a pro rata basis of monies owed to each DAM Invoice Recipient (Refund Allocation).

Late Fee CRq = Late Fee CH Total * Refund Allocationq

• Late Fees will NOT be netted on DAM Invoices but instead will be issued on a separate, monthly, DAM Late Fee Invoice.

• ERCOT shall issue DAM Late Fee Invoices by 2400 on the 10th calendar day after the end of the month. (Bank/Business Day)

• The DAM Late Fee Invoice will contain an entire month of late fees.

Texas Nodal

DAM Settlements – Late Fee Invoices

Each DAM Late Fee Invoice must contain;

• Net amount due or payable;• Time period covered for each item;• Date in which the DAM Late Fee Invoice was issued;• Unique number generated by ERCOT for payment tracking

purposes;• Date and time that DAM Late Fee Invoice amounts must be

paid or received;• Remittance information details; and• Overdue terms.

Texas Nodal

RTM Settlements – RTM Invoices

• RTM Invoices are prepared on a net basis for each Invoice Billing Cycle. Invoice consists of RTM Settlement Statements that have been approved since the last weekly RTM Invoice Billing Cycle. This includes the following categories:– RTM Initials– RTM Finals– RTM True-Ups– RTM Resettlements

• RTM Invoices must be issued weekly on Thursday by 2400 and posted to the MIS Certified Area. If Thursday is not a Business Day then ERCOT must post the RTM Invoice on the next Day that is a Business Day.

Texas Nodal

RTM Settlements – RTM Invoices

Each RTM Invoice must contain;

• Net amount due or payable;• Time period covered for each item;• Date in which the RTM Invoice was issued;• Unique number generated by ERCOT for payment

tracking purposes;• Identification code used to reference the Settlement

Statement invoiced;• Date and time that RTM Invoice amounts must be paid

or received;• Remittance information details; and• Overdue terms.

Texas Nodal

RTM Settlements – Late Fees

• Short-paying RTM Invoice Recipients are charged late fees by ERCOT on the short-pay amount for each day that the amount is unpaid (Late Fee Charges).

Late Fee CHq = Unpaid Balanceq * ((Current Prime Rate + 2%) / 365)

• ERCOT will distribute late fee revenues to the RTM Invoice Recipients who were underpaid, for each day that they are underpaid, on a pro rata basis of monies owed to each RTM Invoice Recipient (Refund Allocation).

Late Fee CRq = Late Fee CH Total * Refund Allocationq

• Late Fees will NOT be netted on RTM Invoices but instead will be issued on a separate, monthly, RTM Late Fee Invoice.

• ERCOT shall issue RTM Late Fee Invoices by 2400 on the 10th calendar day after the end of the month. (Bank/Business Day)

• The RTM Late Fee Invoice will contain an entire month of late fees.

Texas Nodal

RTM Settlements – Late Fee Invoices

Each RTM Late Fee Invoice must contain;

• Net amount due or payable;• Time period covered for each item;• Date in which the RTM Late Fee Invoice was issued;• Unique number generated by ERCOT for payment tracking

purposes;• Date and time that RTM Late Fee Invoice amounts must be

paid or received;• Remittance information details; and• Overdue terms.

Texas Nodal

RTM Settlements - RTM Uplift Invoices• RTM Uplift Invoices are issued ad hoc to collect from QSEs representing load,

a debt owed to ERCOT by an entity who has not paid their RTM or RTM Uplift Invoice in full and meets criteria set forth in Nodal Protocol Section 9.7.3, Partial Payments by Invoice Recipients for the RTM.

• RTM Uplift Invoices are issued by 2400 of its scheduled issue date.– Market Notice

• ERCOT shall create RTM Uplift Invoices for each QSE on a monthly Load Ratio Share basis from the month 3 months prior to the date in which RTM Uplift is issued.

• Total amount eligible to be uplifted is total unpaid amount of RTM or RTM Uplift Invoice less the total payments expected from a payment plan.

• Amounts greater than $2,500,000 must be scheduled so that an amount no greater than $2,500,000 is charged on each set of RTM Uplift Invoices until total short-paid amount is uplifted.

Texas Nodal

RTM Settlements – RTM Uplift Invoices

Each RTM Uplift Invoice must contain;

• Net amount due or payable;• Time period covered for each item;• Date in which the RTM Uplift Invoice was issued;• Unique number generated by ERCOT for payment tracking purposes;• Must reference the Short-Pay(s);• Date and time that RTM Uplift Invoice amounts must be paid or

received;• Remittance information details; and• Overdue terms.

Texas Nodal

RTM Settlements – CRR Auction Invoices

• CRR Auction Invoices are issued on a net basis for each CRR Auction for each CRR Account Holder who bought, sold or was allocated CRRs in the CRR Auction.

• ERCOT shall issue CRR Auction Invoices by 2400 on the 1st Business Day following the completion of a CRR Auction

Texas Nodal

RTM Settlements – CRR Auction Invoices

Each CRR Auction Invoice must contain;

• Net amount due or payable;• CRR Auction Time period;• Date in which the CRR Auction Invoice was issued;• Unique number generated by ERCOT for payment tracking purposes;• Must contain a description of each product awarded in, sold in, or

allocated before the CRR Auction, including time period for which the products cover (months and time of use blocks) and Total MWs of product;

• Date and time that CRR Auction Invoice amounts must be paid or received;

• Remittance information details

Texas Nodal

RTM Settlements – CRR Auction Revenue Distribution (CARD) Invoices

• ERCOT shall prepare Invoices for distribution of CRR Auction Revenues on a monthly basis.

• ERCOT shall issue CARD Invoices by 2400 on its issue date.

• Initial CARD Invoice shall be issued monthly on the 1st Business Day following the RTM Initial Settlement posting of the last day of the month.

• CARD Invoice shall be trued up monthly on the 1st Business Day following the RTM Final Settlement posting of the last day of the month.

Texas Nodal

RTM Settlements – CARD Invoices

Each CARD Invoice must contain;

• Net amount due or payable • CRR Auction Time period and initial or true up distribution;• Date in which the CARD Invoice was issued;• Unique number generated by ERCOT for payment tracking

purposes;• Date and time that CARD Invoice amounts must be paid or

received;• Remittance information details

Texas Nodal

RTM Settlements – CRR Balancing Account Invoices

• ERCOT shall pay any positive balance in the CRR Balancing Account to each short-paid CRR Owner, with the amount paid to each CRR Owner being the lesser of (a) a prorated amount based on the short-paid amount for that CRR Owner

compared to the total short-paid amount, and (b) the short-paid amount for that CRR Owner.

• Any remaining positive balance in the CRR Balancing Account must be allocated to all QSEs on the QSE’s Load Ratio Share in the interval coincident with the ERCOT-wide peak 15-minute Settlement Interval for the month.

• ERCOT shall issue CRR Balancing Account Invoices monthly on the 1st Business Day following the RTM Initial Settlement posting of the last day of the month.

Texas Nodal

RTM Settlements – CRR Balancing Account Invoices

Each CARD Invoice must contain;

• Net amount due or payable • Time period covered for each item;• Date in which the CRR Balancing Account Invoice was

issued;• Unique number generated by ERCOT for payment tracking

purposes;• Date and time that CRR Balancing Account Invoice

amounts must be paid or received;• Remittance information details

Texas Nodal

Miscellaneous Invoices

• ERCOT shall have functionality to issue ad hoc invoices due to circumstances not detailed in the Nodal Protocols, such as Alternative Dispute Resolution (ADR).

Texas Nodal

Comparisons - INVOICES

Current Market• Published Weekly• Contains a weeks worth of Statements (Initials, Finals, True-Ups and Resettlements)• Contains a weeks worth of Late Fees• Amounts netted

DAM• Published Daily• Contains 1 Statement (either a DAM Statement or a DAM Resettlement Statement)• Contains no Late Fees

RTM• Published Weekly• Contains a weeks worth of Statements (Initials, Finals, True-Ups and Resettlements)• Contains no Late Fees• Amounts netted

Texas Nodal

Comparisons – LATE FEESCurrent Market• Calculated Daily• Late Fee Charges to short-paying QSEs• Late Fee Credits to underpaid QSEs• Calculations:

Late Fee Charge = Unpaid Balance * ((Prime Rate * 2%) / 365)Late Fee Credit = LateFeeTOT * Refund Allocation

• Late Fees netted with Statement amounts on weekly Invoice

DAM• Calculated Daily• Late Fee Charges to short-paying QSEs• Late Fee Credits to underpaid QSEs• Calculations:

Late Fee Charge = Unpaid Balance * ((Prime Rate * 2%) / 365)Late Fee Credit = LateFeeTOT * Refund Allocation

• Late Fees Invoiced on separate, monthly, DAM Late Fee Invoice on the 10 th of every month.

RTM• Calculated Daily• Late Fee Charges to short-paying QSEs• Late Fee Credits to underpaid QSEs• Calculations:

Late Fee Charge = Unpaid Balance * ((Prime Rate * 2%) / 365)Late Fee Credit = LateFeeTOT * Refund Allocation

• Late Fees Invoiced on separate, monthly, RTM Late Fee Invoice on the 10 th of every month.