Settlements & Billing / Version: 5.0
Configuration Guide for: Shortfall Receipt Distribution / Date: 04/01/09

Settlements & Billing

BPM Configuration Guide:Shortfall Receipt Distribution

CC 5900

Version 5.0

CAISO, 2018 / Page 1 of 14
Settlements & Billing / Version: 5.0
Configuration Guide for: Shortfall Receipt Distribution / Date: 04/01/09

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

Bus Req ID / Business Rule
1.0 / The Shortfall Receipt Distribution calculation will be executed only when verbally directed by CAISO Finance team members; receipt of input data is not a trigger.
1.0.1 / When the PTBShortfallPaymentRecievedAmount is provided from Oracle as a PTB Financial Adjustment input, this indicates a CAISO Debtor(s) has provided payment against a previous default.
1.0.2 / When received, the PTBShortfallPaymentRecievedAmount must be provided to the associated Debtor Business Associate (B) on a Settlement Statement as an indication that payment has been received.
1.0.3 / The PTBShortfallPaymentRecievedAmount for Debtor Business Associates (B) should not be included on a Bill or Invoice as the funds have already been received.
1.1 / Oracle provides open AP item Balances to Settlements as part of the normal business process until the Market closes (that is, all funds received and paid), therefore these inputs cannot be used as indicators as to when the execution of the Shortfall Receipt Distribution Settlement calculation should occur. Specific inputs are:
  • OpenAPItemBalance
  • OpenCAISOGMCOffsetItemBalance
  • OpenFERCTrustItemBalance
  • OpenOtherItemsBalance

1.2 / Once direction has been received from CAISO Finance, the Shortfall Receipt Distribution calculation shall be executed, with details provided on Creditor’s Settlement statement and payment applied on the next subsequent Invoice or Payment Advice per the CAISO Payment Calendar.
2.0 / Each Invoice and Payment Advice is treated as a whole and discrete period for Shortfall Receipt Distribution Calculations; this period is unique to each Invoice and Payment Advice Run and is referred to as Invoice Period.
2.1 / Within the Invoice Period, Invoices and Payment Advices may contain Net Settlement Amounts for multiple Bill Periods; currently, a Bill Period corresponds to a Trading Month.
2.2 / The values provided against the Bill Period Start and Bill Period End represent the start and end trade dates of the Current Bill Period (P) for the Invoice or Payment Advice associated with Invoice Run (L) that has been impacted by a default.
2.3 / Shortfall Receipt Distribution calculations are applied to Creditor entities that have amounts owing to them due to a shortfall that occurred against a previous Current Bill Period (P’) generated duringInvoice Run (L).
3.0 / Accounts Receivable or Payable balances (if any) associated with RMR and Annual FERC Fee Invoice types are exempted from Shortfall Receipt Distribution processing.
4.0 / Shortfall Receipt Distributions are applied to Creditor entities that have open AP balances for the Current Bill Period (P’) for which a payment from a defaulting Debtor has been made.
4.1 / Collections of defaulted receivables will be distributed pro-rata to all CAISO Creditors for the Current Bill Period associated with the default based on a ShortfallReceiptDistributionRatio
4.2 / The ShortfallReceiptDistributionRatio is calculated as each Creditor’s open AP item balance for the Current Bill Period (P’) in which the default occurred,divided by the total open AP item balance for all CAISO Creditors during the same period.
4.3 / The ShortfallReceiptDistributionSettlementAmount represents the additional amount to be paid to a CAISO Creditor as a result of receiving a payment from the CAISO Debtor.
4.4 / Payment from a defaulting Debtor may only be a partial amount, therefore any subsequent distribution of funds received will be based on each Creditor’s open AP item balance at the time those funds are received, however the distribution will still be made in reference to the Current Bill Period (P’) in which the default originally occurred.
4.5 / The same priority rules apply to the Shortfall Receipt Distribution calculation as those for the Shortfall Allocation; that is:
  • GMC paid first
  • Monthly FERC Fees paid second
  • Creditor Invoices under $5,000 are paid third.
All other amounts paid fourth and are equally pro-rated. This includes any amounts collected in Trust, Interest (from prior shortfalls or any other Interest), CRR Settlements, and TAC Settlements.
4.5.1 / If there is a non-zero OpenCAISOGMCOffsetItemBalance against a given Current Bill Period
and
there were enough funds received in payment of a default for the same Current Bill Period (the PTBShortfallPaymentRecievedAmount) to pay GMC partially, a partial distribution payment is made to GMC in an amount equal to the amount of the funds received, and the remainder of the GMC and all other open AP balances continue to show as outstanding and do not receive an allocation.
4.5.2 / If there is a non-zero OpenCAISOGMCOffsetItemBalance against a given Current Bill Period
and
a non-zero OpenFERCTrustItemBalance against the same Current Bill Period
and
there were enough funds received in payment of a default for the same Current Bill Period (the PTBShortfallPaymentRecievedAmount) to pay GMC in full, but not enough to pay FERC, GMC is paid in full, and a partial distribution payment made to FERC in an amount equal to the difference between the TotalPTBShortfallPaymentRecievedAmount and the amount paid to GMC, with the remainder of the FERC balance and all other open AP balances continue to show as outstanding and do not receive a distribution.
4.5.3 / If there is a non-zero OpenCAISOGMCOffsetItemBalance against a given Current Bill Period
and
a non-zero OpenFERCTrustItemBalance against the same Current Bill Period
and
there were enough funds received in payment of a default for the same Current Bill Period (the PTBShortfallPaymentRecievedAmount) to pay GMC and FERC in full, but not enough to pay those Creditors with balances under $5000 (including any trust or balancing bill determinant amounts) each Creditor will receive a pro-rata distribution payment, with the remainder of Creditor balances (under and over $5000) continue to show as outstanding and do not receive a distribution.
4.5.4 / If there is a non-zero OpenCAISOGMCOffsetItemBalance against a given Current Bill Period
and
a non-zero OpenFERCTrustItemBalance against the same Current Bill Period
and
there were enough funds received in payment of a default for the same Current Bill Period (the PTBShortfallPaymentRecievedAmount) to pay GMC, FERC, and Creditors under $5000 in full, but not enough to distribute payments to the remaining Creditors, the remaining Creditors will receive pro-rata distribution of payment amount, with the remaining balance shown as outstanding.
5.0 / Once calculated, the ShortfallReceiptDistributionSettlementAmount must be its own line item on the next subsequent Invoice (Payment Advice) to be generated per the CAISO Payment Calendar under Financial Adjustments so that Market Clearing can process the outputs as additional payments.
6.0 / Any ShortfallReceiptDistributionRoundingAmount calculated is provided to Market Clearing for write-off.
7.0 / In the event of an error on this charge code, a Cancel/Rebill process would be performed against the Invoice; no separate PTB Adjustment Logic is required.

3.2Predecessor Charge Codes

Charge Code/ Pre-calc Name
None

3.3Successor Charge Codes

Charge Code/ Pre-calc Name
None

3.4Inputs – External Systems

Row # / Variable Name / Description
1 / PTBShortfallPaymentRecievedAmountBJP’V’L / The negative amount in dollars ($) provided as a PTB Financial Adjustment (J) by Market Clearing that has been collected from a previously defaulting Business Associate (B), against Current Bill Period (P’), forInvoice Reference (V’)and Invoice Run (L) that must be distributed to Creditors that were short paid in the corresponding Invoice period.
2 / PTBOpenAPShortfallItemBalance BJP’V’L / The total positive amount in dollars ($) provided as a PTB Financial Adjustment (J)by Market Clearing that represents the open or outstanding MARKET Accounts Payable (AP) balance for a Creditor Business Associate (B) against Current Bill Period (P’),generated from Invoice Run (L) and Invoice Reference (V’) in which the Business Associate was previously short paid.
3 / PTBOpenGLBalanceAmount BJP’L / The total positive amount in dollars ($) provided as a PTB Financial Adjustment (J) by Market Clearing that represents the total open amount that offsets and balances the GL for: GMC amounts, collected Monthly FERC Fees, and other trust amount offsets represented by a Business Associate ID (B) for the Current Bill Period (P’)generated from Invoice Run (L)which the Business Associate was previously short paid.

3.5Inputs - Predecessor Charge Codes or Pre-calculations

Row # / Variable Name / Predecessor Charge Code/ Pre-calc Configuration
1 / None

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

Output ID / Name / Description
In addition to any outputs listed below, all external inputs shall be included as outputs.
1 / BusinessAssociateOpenBalanceAmount BP’L / Business Associate (B) Open Balance Amount for each unique BAID including one-sided transactions excluding FERC and GMC for the Current Bill Period (P’)and Invoice Run (L).
2 / TotalPTBShortfallPaymentRecievedAmountP’L / The total of all Shortfall payments that have been collected for all defaulting against the Current Bill Period(P’) forInvoice Run(L).
3 / BusinessAssociateShortfallReceiptDistributionSettlementAmountBP’L / The negative amount in dollars ($) paid to a CAISO Creditor (represented by Business Associates (B) that are Market Participants) based on their share of funds owed to them from a defaulting Business Associate in the Current Bill Period (P’)and Invoice Run (L).
4 / BusinessAssociateGMCOpenBalance BP’L / GMC Open Balance Amount for the Business Associate (B), Current Bill Period (P) and Invoice Run (L).
5 / CAISOGMCOpenBalance P’L / GMC Open Balance Amount for the Current Bill Period (P) and Invoice Run (L).
6 / BusinessAssociateFERCTrustOpenBalance BP’L / FERC Open Balance Amount for the Business Associate (B), Current Bill Period (P) and Invoice Run (L).
7 / CAISOFERCTrustOpenBalance P’L / FERC Open Balance Amount for the Current Bill Period (P) and Invoice Run (L).
8 / CAISOTotalUnder5000OpenBalanceAmountP’L / CAISO Total Open Balance Amount for BA’s under $5000 for the Current Bill Period (P) and Invoice Run (L).
9 / CAISOTotalOver5000OpenBalanceAmount P’L / CAISO Total Open Balance Amount for BA’s exceeding $5000 for the Current Bill Period (P) and Invoice Run (L).

4.Charge Code Effective Dates

Charge Code/
Pre-calc Name / Document
Version / Effective Start Date / Effective End Date / Version Update Type
CC 5900 – Shortfall Receipt Distribution / 5.0 / 04/01/09 / Open / Documentation Edits Only
CAISO, 2018 / Page 1 of 14