RE: ERCOT SETTLEMENTS

Here you go:

There is no banking mechanism. If A&B are net long, they receive the balancing energy price for all of their mw's. If C & D are short, then their short position is covered by the Ercot ISO; C & D are charged the balancing energy price plus replacement reserve /mw.

If the money, at the end of the day, is insufficient to pay A&B, then this full cost will be allocated on a load share ratio basis. This charge will be allocated under the UFE (unaccounted for energy) charge type.
If C & D serve load, then they will share the expense of paying for the balancing energy price to A & B. A & B escapes this expense allocation, as they do not serve load.

JForney

-----Original Message-----
From: Maheu, Peter
Sent: Wednesday, August 08, 2001 8:28 AM
To: Forney, John M.
Subject: Re: ERCOT SETTLEMENTS

---------------------- Forwarded by Peter Maheu/HOU/EES on 08/08/2001 08:27 AM ---------------------------

Peter Maheu
07/30/2001 12:55 PM
To: John M Forney/ENRON@enronXgate @ ENRON
cc: Kenneth Farrar/HOU/EES@EES, Gary Galow/HOU/EES@EES
Subject: Re: ERCOT SETTLEMENTS << OLE Object: StdOleLink <<

Example assumptions:
Market consists entirely of 4 QSEs who have the following schedule-actual variances in a particular hour; A=+50MW; B=+50MW; C=-25MW & D=-25MW.
Market energy price is $100/MWH.

Since money paid by C & D is insufficient to fully reimburse A & B (5000+5000-2500-2500=5000), what happens in the settlement? Do A & B get proportionally less than they otherwise would have gotten? Or, is there a banking mechanism that builds up in hours where there are overages and is drawn down in hours where there are shortages (such as example above)?

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