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Module 4 CRR Balancing Account

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  • Module 4

    CRR Balancing Account

  • 2

    • Describe the CRR Balancing Account

    • Explain the importance of the Balancing Account to CRR Account Holders and ERCOT

    Upon completion of this module, learners will be able to:

    Module Objectives: Balancing Account

    Reliability Unit

    Commitment

    CRR BalancingAccount

  • 3

    Course Topics

    DAMParticipation in DAM• Energy• AS• PTP Obligations

    DAM Commitment• Make-Whole

    Settlement of CRRs purchased in the Auction

    CRR Auction

    Revenue Distribution

    Charges & Payments for CRRs

    CRR BalancingAccount

    Reconcile CRRShort payments

  • 4

    CRRs Settled in the Day-Ahead Market

    Congestion Revenue Rights Balancing Account

    Payment due to CRR Account Holders(Target Payment)

    • Charges for Cleared DAM Energy Bids

    • Charges for Cleared DAM PTP Obligation Bids

    • Payments for Cleared DAM Energy Offers

    • Payments for Cleared DAM PTP Obligation Bids

  • 5

    CRRs Settled in the Day-Ahead Market

    Congestion Revenue Rights Balancing Account

    Payment due to CRR Account Holders(Target Payment)

    • Charges for Cleared DAM Energy Bids

    • Charges for Cleared DAM PTP Obligation Bids

    • Payments for Cleared DAM Energy Offers

    • Payments for Cleared DAM PTP Obligation Bids

    Some hours there is not enough

    Congestion Rent to pay CRR

    Owners

  • 6

    CRRs Settled in the Day-Ahead Market

    Congestion Revenue Rights Balancing Account

    Payment due to CRR Account Holders(Target Payment)

    • Charges for Cleared DAM Energy Bids

    • Charges for Cleared DAM PTP Obligation Bids

    • Payments for Cleared DAM Energy Offers

    • Payments for Cleared DAM PTP Obligation Bids

    Some hours there is more

    Congestion Rent collected than needed to pay CRR Owners

  • 7

    CRRs Settled in the Day-Ahead Market

    Congestion Revenue Rights Balancing Account

    Payment due to CRR Account Holders(Target Payment)

    • Charges for Cleared DAM Energy Bids

    • Charges for Cleared DAM PTP Obligation Bids

    • Payments for Cleared DAM Energy Offers

    • Payments for Cleared DAM PTP Obligation Bids

    Occurs hourly

  • 8

    Credit to CRR Balancing Account

    Congestion Revenue Rights Balancing Account

    CRRBACR = Max (0, (DACONGRENT + DACRRCRTOT + DACRRCHTOT))

    Payment due to CRR Account Holders(Target Payment)

    Determinants

    CRR Balancing Account Credit

    Day-Ahead Congestion Rent

    Day-Ahead CRR Credit Total

    Day-Ahead CRR Charge Total

  • 9

    Any CRR Auction Fees for the month are also added to the CRR Balancing Account

    Congestion Revenue Rights Balancing Account

    Auction Fees

    Determinants

    CRR Auction Fee Total

  • 10

    CRR Balancing Account: Outcomes

    Refunding short paid CRR Account Holders from CRR Balancing Account

    Outcome #1

    Dispensing remaining funds in CRR Balancing Account

    Outcome #2

    Refunding short paid CRR Account Holders when funds in CRR Balancing Account are insufficient

    Outcome #3

  • 11

    CRR Balancing Account: Outcomes

    Refunding short paid CRR Account Holders from CRR Balancing Account

    Outcome #1

    Dispensing remaining funds in CRR Balancing Account

    Outcome #2

    Refunding short paid CRR Account Holders when funds in CRR Balancing Account are insufficient

    Outcome #3

  • 12

    CRR Balancing Account

    Congestion Revenue Rights Balancing Account

    Payment due toCRR Account Holders

    Monthly

  • 13

    Monthly Refunds to Short-Paid CRR Owners

    Short-paid CRR Account Holders receive a refund for any short-paid Operating Hour in a month

    Outcome #1

    What: Monthly refund to CRR Account Holders that received a Shortfall Charge in the month

    Why: Uses Monthly CRR Balancing Account to pay back short paid CRR Account Holders

  • 14

    At the end of the month, the CRR Balancing Account and Shortfall charges included:

    • CRRBACRTOT = $27,000• CRRFEETOT = $3,000• CRRSAMTTOT = $25,000

    If CRRAH1’s shortfall charges were $2,500, will they receive a refund from the Balancing Account? If so, how much of a refund will they receive?

    Trigger #1

    Monthly Refunds to Short-Paid CRR Owners

    Yes! Because CRRBACRTOT + CRRFEETOT are sufficient to fully refund CRRSAMTTOT, CRRAH1 will receive a full refund of $2,500.

    Outcome #1

  • 15

    Refunds using Monthly CRR Balancing Account

    Monthly Refunds to Short-Paid CRR Owners

    CRRRAMT o =(-1)* Min (CRRBACRTOT + CRRFEETOT, CRRSAMTTOT) * CRRSAMTRS o

    CRRSAMTRS o =

    o = CRR Owner

    ( )Shortfall Charges to CRR Account HolderTotal Shortfall Charges to all CRR Account Holders

    DeterminantsCRR Balancing Account Credit TotalCRR Auction Fee Total CRR Refund AmountCRR Shortfall Amount TotalCRR Short Amount Ratio Share

  • 16

    CRR Balancing Account: Outcomes

    Refunding short paid CRR Account Holders from CRR Balancing Account

    Outcome #1

    Dispensing remaining funds in CRR Balancing Account

    Outcome #2

    Refunding short paid CRR Account Holders when funds in CRR Balancing Account are insufficient

    Outcome #3

  • 17

    CRR Balancing Account

    CRR Rolling Balancing Account

    Payment due toCRR Account Holders

    Monthly

    Pay to QSEs representing Load

  • 18

    CRR Balancing Account Closure

    Payment to QSEs that represent LoadOutcome #2

    What:

    Monthly payment to QSEs that represent Load to disperse remaining revenues in the Monthly Balancing Account, if the Balancing Account Fund has reached it’s maximum limit

    Why: Keeps ERCOT revenue neutral

  • 19

    At the end of the month, the CRR Balancing Account and Shortfall charges included:

    • CRRBACRTOT = $27,000• CRRFEETOT = $3,000• CRRSAMTTOT = $25,000

    The Balancing Account Fund maximum limit has been met. If QSE1’s LRS is 10%, will they receive a payment from the Balancing Account? If so, how much of a payment will they receive?

    Trigger #2

    CRR Balancing Account Closure

    Yes! Because the Balancing Account Fund has reached it’s maximum limit, QSE1 will receive 10% x $5,000, or $500.

    Outcome #2

  • 20

    CRR Balancing Account Closure

    LACRRAMTq = (-1) * Max ((CRRBACRTOT + CRRFEETOT + CRRRAMTTOT)– (FUNDCAP – CRRBAFBBAL),0) * MLRSq

    Amount Paid to QSEs that represent Load q =

    Total left in Monthly CRR Balancing Account after

    reimbursing short pays when Balancing Account Fund is full

    Monthly LRS q( ) *

    Outcome #2

    o = CRR Owner

    m = a month

    m – 1 = the previous month

    q = QSE

    Determinants

    Load Allocated CRR Amount

    CRR Refund Amount Total

    CRR Balancing Account Fund CapCRR Balancing Account Fund Beginning Balance

  • 21

    CRR Balancing Account: Outcomes

    Refunding short paid CRR Account Holders from CRR Balancing Account

    Outcome #1

    Dispensing remaining funds in CRR Balancing Account

    Outcome #2

    Refunding short paid CRR Account Holders when funds in CRR Balancing Account are insufficient

    Outcome #3

  • 22

    Payment due toCRR Account Holders

    CRR Rolling Balancing Account

    Monthly

  • 23

    Monthly Refunds to Short-Paid CRR Owners

    Short-paid CRR Account Holders receive a refund for any short-paid Operating Hour in a month

    Outcome #3

    What: Monthly refund to CRR Account Holders that received a Shortfall Charge in the month

    Why:Uses Monthly CRR Balancing Account and Balancing Account Fund to pay back short paid CRR Account Holders

  • 24

    At the end of the month, the CRR Balancing Account and Shortfall charges included:

    • CRRBACRTOT = $27,000• CRRFEETOT = $3,000• CRRSAMTTOT = $50,000

    With a Balancing Account Fund of $25,000, will the shortpaid CRRAHs be fully refunded?

    Trigger #3

    CRR Rolling Balancing Account

    Yes! Although CRRBACRTOT + CRRFEETOT are insufficient to fully refund CRRSAMTTOT, the remaining $20,000 of refunds can be paid from the Balancing Account Fund.

    Outcome #3

  • 25

    Refunds using CRR Balancing Account Fund

    CRR Rolling Balancing Account

    CRRBAFAm = Min (CRRBAFBBAL, CRRSAMTTOT –(CRRBACRTOT + CRRFEETOT))

    CRRRAMTo = -1 * Min (CRRBACRTOT + CRRFEETOT + CRRBAFAm, CRRSAMTTOT) * CRRSAMTRSo

    Where

    o = CRR Ownerm = a month

    m – 1 = the previous month

    Determinants

    CRR Balancing Account Fund Available

    CRR Balancing Account Fund Beginning Balance

  • 26

    Payment due toCRR Account Holders

    CRR Rolling Balancing Account

    Monthly

    X

    may remain short paid

  • 27

    $ Describe the purpose and use of the Balancing Account

    $ Identify the settlements charges and payments associated with the Balancing Account

    Module Summary

    Reliability Unit

    Commitment

    CRR BalancingAccount

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