BPM - CG CC 5900 Shortfall Receipt Distribution

Settlements & Billing

BPM Configuration Guide:Shortfall Receipt Distribution

CC 5900

Version 5.0

Table of Contents

1.Purpose of Document

2.Introduction

2.1Background

2.2Description

3.Charge Code Requirements

3.1Business Rules

3.2Predecessor Charge Codes

3.3Successor Charge Codes

3.4Inputs – External Systems

3.5Inputs - Predecessor Charge Codes or Pre-calculations

3.6CAISO Formula

3.7Outputs

4.Charge Code Effective Dates

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

2.1Background

Each Scheduling Coordinator must remit to the CAISO Clearing Account the amount shown on an Invoice as payable by that Scheduling Coordinator no later than 10:00am on the relevant Payment Date for that Invoice. Furthermore, each Scheduling Coordinator is obligated to notify the CAISO as soon as they are aware that a payment will not, or is unlikely to be remitted to the CAISO Bank by 10:00 am on the Payment Date for a given Invoice.

On the Payment Date, the CAISO will determine if all amounts required to be remitted to the CAISO Clearing Account were received. Once all payments are received, the CAISO is obligated to remit to the Settlement Accounts maintained by the CAISO Creditors the amount owed as specified on the Invoice (Payment Advice) by the close of business on the Payment Date. If all payments are not received, and the CAISO has determined there are CAISO Debtors in default, the CAISO will identify the Scheduling Coordinator(s) that has failed to pay, and begin to take the appropriates steps to recover the overdue amount so that payments to CAISO Creditors can be made.

In the event of a default, the CAISO must take the following steps to process the Shortfall and ensure the CAISO Clearing Account clears on the payment date:

1. First, use the defaulting Scheduling Coordinator’s Security (if any) to the extent necessary to cover the Default Amount and allow CAISO Creditors to be paid.
2. If Security is not available, and there are funds standing to the credit of the CAISO Reserve Account, the CAISO shall debit the CAISO Reserve Account for the Default Amount and apply that amount to the CAISO Clearing Account in order to pay CAISO Creditors.
3. If neither Scheduling Coordinator Security amounts nor CAISO Reserve Account credits are sufficient to cover the Default Amount, the CAISO shall reduce payments to all CAISO Creditors proportionality to the net amounts payment to them on the relevant Payment Date to the extent necessary to clear the CAISO Clearing Account. This amount will be netted with any offsets used to clear a past billing shortfall. Collections of defaulted receivables (other than Interest) will be distributed pro rata to CAISO Creditors in the Bill Period(s) of the default.

Defaulting Scheduling Coordinators are subject to Interest charges on overdue amounts for the period from the Payment Date to the date on which the payment is remitted to the CAISO Clearing Account. The interest charges and payments received are settled in accordance with the principles described for Charge Code 3999 Default Invoice Interest Charge and 2999 Default Invoice Interest Allocation.

The first two steps are processes facilitated outside of Settlement calculations following the principles outlined in Section 11.29.9 through 11.29.17 of the Tariff. The third step is covered by Settlement calculations (also prescribed by the Tariff section referenced above) associated with Shortfall Allocation and Shortfall Receipt Distribution configurations covered under Charge Codes 5910 and 5900 respectively.

2.2Description

This Charge Code 5900 for Shortfall Receipt Distribution determines the amount to be paid to CAISO Creditors as a result of collection made on a default amountprior to the execution of fund transfers through the CAISO Clearing Account.

Shortfall Receipt Distribution processing is facilitated through a coordinated effort between CAISO Finance and CAISO Settlements and will be calculated against the open Payment Advice Accounts Payable (AP) balance on which the default originally occurred. The open AP balance could represent multiple Bill Periods. When appropriate, the Shortfall Receipt Distribution Settlement Amount calculated as a result of this process will appear on the next subsequent Invoice or Payment Advice scheduled for publication in accordance with the CAISO Payment Calendar. The Settlement Amount against this Charge Code will represent the payment that will be made to the Creditor as a result of the collation of funds from the defaulting Debtor.

On the day a CAISO Debtor has made a payment on a default amount, this amount will appear on the Debtor’s statement to indicate payment has been received. If the total collected in that closing (related to the past due Current Bill Period) is less than $5,000, then the funds received will be held by the CAISO in an Interest-bearing account. Once one of conditions listed below are met, the CAISO will calculate and distribute the Shortfall Receipt Distribution Settlement Amount to CAISO Creditors on a pro-rata basis against the same Current Bill Period for the Invoice of the default and output this amount the next subsequent Invoice or Payment Advice.

1. The account exceeds $5,000.
2. There have been no distributions from the account for six months.
3. All defaults against that Current Bill Period for the Invoice have been collected exclusive of any bankruptcy defaults.

If all CAISO Creditors for the Current Bill Period for the Invoice have been paid, then the proceeds will be applied to the CAISO Creditors in the oldest unpaid bill period. This provision is also applicable to the amounts netted against CAISO Creditor balances related to prior defaulted receivables. These conditions are prescribed by the CAISO Tariff section 11.29.17.2 in regards to Payment of Defaulted Receivables.

The Shortfall Payment Received Amount is provided (by the market clearing system) as a Pass Through Bill (PTB) Financial Adjustment transaction. This Shortfall Payment Received Amount is allocated to all CAISO Creditor Business Associates based on their share of the total outstanding AP Settlement volumes on a priority basis depending on the amount of funds received by the Debtor. If a partial payment is made, funds are first distributed to any unpaid GMC, next to any unpaid FERC Fees, then to any CAISO Creditor whose unpaid balance was less than $5,000, and finally to all other Creditor balances based each Creditor’s share of the remaining AP balance. The resulting the Shortfall Receipt Distribution Amount as described above will be published on the next subsequent Invoice or Payment Advice in accordance with the CAISO Payment Calendar to ensure that the dollars paid out by CAISO exactly match receipts. These shortfall distribution amounts are itemized on the Invoice or Payment Advice as Financial Adjustments so that market clearing can process them as the additional payment owed.

3.Charge Code Requirements

3.1Business Rules

• OpenAPItemBalance
• OpenCAISOGMCOffsetItemBalance
• OpenFERCTrustItemBalance
• OpenOtherItemsBalance

• GMC paid first
• Monthly FERC Fees paid second
• Creditor Invoices under $5,000 are paid third.

3.2Predecessor Charge Codes

3.3Successor Charge Codes

3.4Inputs – External Systems

3.5Inputs - Predecessor Charge Codes or Pre-calculations

3.6CAISO Formula

3.6.1Business Associate ShortfallReceiptDistributionAmount per Current Bill Period P’ for GMC CAISO ID

IF (| TotalPTBShortfallPaymentReceivedAmount P’L | >=

BusinessAssociateGMCOpenBalance BP’L )

THEN

BusinessAssociateShortfallReceiptDistributionSettlementAmount BP’L = (-1) * BusinessAssociateGMCOpenBalance BP’L

ELSE

BusinessAssociateShortfallReceiptDistributionSettlementAmount BP’L = TotalPTBShortfallPaymentReceivedAmount P’L

END IF

Note: BAID represents GMC

3.6.1.1Where

BusinessAssociateGMCOpenBalance BP’L = PTBOpenGLBalanceAmount BJP’L

Where: Business Associate (B) = CAISO ID for GMC Offset (BAID = 5078)

Implementation Note: Business Associate (B) for BusinessAssociateGMCOpenBalance represents the unique CAISO ID for GMC Offset Invoice.

3.6.1.2And Where

TotalPTBShortfallPaymentReceivedAmount P’L =

PTBShortfallPaymentReceivedAmount BJV’P’L

3.6.2Business Associate Shortfall Receipt Distribution Amount per Current Bill Period P’ for FERC CAISO ID

IF (| TotalPTBShortfallPaymentReceivedAmount P’L | >=

CAISOGMCOpenBalance P’L + BusinessAssociateFERCTrustOpenBalance BP’L )

THEN

BusinessAssociateShortfallReceiptDistributionSettlementAmount BP’L = (-1) * BusinessAssociateFERCTrustOpenBalance BP’L

ELSE

BusinessAssociateShortfallReceiptDistributionSettlementAmount BP’L = TotalPTBShortfallPaymentReceivedAmount P’L – MAX ((-1) * CAISOGMCOpenBalance P’L , TotalPTBShortfallPaymentReceivedAmount P’L )

END IF

Note: BAID represents FERC

3.6.2.1Where

BusinessAssociateFERCTrustOpenBalance BP’L = PTBOpenGLBalanceAmountBJP’L

Where: Business Associate (B) = CAISO ID for FERC Trust (BAID = 7035)

Implemenation Note: Business Associate (B) for BusinessAssociateFERCTrustOpenBalance represents the unique CAISO ID for GMC Offset Invoice.

3.6.2.2And Where

CAISOGMCOpenBalance P’L = BusinessAssociateGMCOpenBalance BP’L

3.6.2.3And Where

CAISOFERCTrustOpenBalanceP’L = BusinessAssociateFERCTrustOpenBalance BP’L

3.6.3Business Associate Shortfall Receipt Distribution Amount per Current Bill Period P’ for all Business Associates except GMC & FERC

IF (| TotalPTBShortfallPaymentReceivedAmount P’L | >=

CAISOGMCOpenBalance P’L + CAISOFERCTrustOpenBalance P’L + CAISOTotalUnder5000OpenBalanceAmount P’L )

THEN

IF(BusinessAssociateOpenBalanceAmount < 5000

THEN

BusinessAssociateShortfallReceiptDistributionSettlementAmount BP’L = (-1) * BusinessAssociateOpenBalanceAmount BP’L

ELSE

BusinessAssociateShortfallReceiptDistributionSettlementAmount BP’L = (TotalPTBShortfallPaymentReceivedAmount P’L – MAX ((-1) * CAISOGMCOpenBalance P’L + CAISOFERCTrustOpenBalance P’L + CAISOTotalUnder5000OpenBalanceAmount P’L), TotalPTBShortfallPaymentReceivedAmount P’L )) * BusinessAssociateOpenBalanceAmount BP’L / CAISOTotalOver5000OpenBalanceAmount P’L

END IF

ELSE

IF (BusinessAssociateOpenBalanceAmount BP’L < 5000)

THEN

BusinessAssociateShortfallReceiptDistributionSettlementAmount BP’L = (TotalPTBShortfallPaymentReceivedAmount P’L – MAX ((-1) * (CAISOGMCOpenBalance P’L + CAISOFERCTrustOpenBalance P’L) , TotalPTBShortfallPaymentReceivedAmount P’L )) * BusinessAssociateOpenBalanceAmount BP’L / CAISOTotalUnder5000OpenBalanceAmount P’L

ELSE

BusinessAssociateShortfallReceiptDistributionSettlementAmount BP’L = 0

END IF

END IF

Note: Business Associate B for OpenAPItemBalance does not include balances for CAISO Ids for GMC Offset Amounts

3.6.3.1Where

IF BusinessAssociateOpenBalanceAmount BP’L > 5000

THEN CAISOTotalOver5000OpenBalanceAmount P’L = BusinessAssociateOpenBalanceAmountBP’L

ELSE CAISOTotalUnder5000OpenBalanceAmount P’L = BusinessAssociateOpenBalanceAmount BP’L

3.6.3.1.1And Where

BusinessAssociateOpenBalanceAmountBP’L = PTBOpenAPShortfallItemBalance BJV’P’L + PTBOpenGLBalanceAmount BJP’L

3.7Outputs

4.Charge Code Effective Dates