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Conservation First Framework Payment Transition to Market Invoice December 2, 2015
• Objective and Timeline • Background • Key Considerations • Proposed Changes • Next Steps
2
Agenda
• A stakeholder engagement (SE) has been established to support a review of the IESO’s plan to transition Local Distribution Companies (LDCs) Conservation First framework (CFF) payments into the Market Invoice
• The SE will provide stakeholders with the opportunity to provide feedback / comments on the transition process
• The transition affects all LDCs and LDC Agents with respect to either individual or joint CDM Plans
3
Launch of Stakeholder Engagement
• Process changes will be weighted against the following key principles:
– The IESO will follow sound practices that promote confidence for all market participants in the electricity market;
– A transparent understanding of the impacts to LDCs and LDC Agents; and
– The new process should provide a balance between impacts and benefits
4
Key Principles
5
Timelines
Date Activities Expected ActionDecember 2, 2015
Stakeholder Meeting – Webinar
Stakeholders to provide feedback – verbal / written by Dec 16th
December 23, 2015
Stakeholder Update Summary of feedback posted
Mid-January, 2015
Stakeholder Meeting – Webinar
Materials provided to all stakeholders
February 1, 2016
New settlement process in place
• Objective and Timeline • Background • Key Considerations • Proposed Changes • Next Steps
6
Agenda
• Legacy framework (2011-2014) settlements between the IESO and LDCs require submission of invoices with supporting billing reports (i.e. preliminary and final)
– Payments are processed by accounts payable within 20 days of receipt by IESO
• Current CFF payments to LDCs are processed by the IESO’s accounts payable within 20 business days of receipt from the LDC
– Payments are reconciled with LDC reported program spending on a quarterly basis
7
Conservation Settlements Background
8
Current CFF Settlement Process
LDC Invoice Submission
(To Accounts Payable)
IESO Invoice Payment (Through Accounts
Payable)
IESO Report Review
LDC Report Submission
IESO/LDC Quarterly Reconciliation
• The merger of OPA and IESO in January 1, 2015 introduced opportunities to streamline processes of the two former organizations
• LDC CFF payments will be combined with the monthly market settlements invoice to achieve administrative and process efficiencies for both LDCs and the IESO
9
Conservation Settlements Background – cont’d
• Objective and Timeline • Background • Key Considerations • Proposed Changes • Next Steps
10
Agenda
• Key Benefits:
– Reduced number of instances funds are transferred between IESO and LDC each month (i.e. consolidation of Markets and CDM payments)
– Scheduled monthly CDM settlement
– Reduced LDC risk of margin calls. CDM payments added onto the LDC’s monthly Market invoice will lower their monthly bill, reducing market exposure and risk of receiving a margin call
11
Key Considerations
• Potential impacts on LDCs:
– Greater interaction between LDC Markets and CDM staff
– Internal funds transfer between regulated and un-regulated bank accounts, where applicable
– Additional time/effort required to review and implement changes within the organization
– Availability and timeliness of transaction information
12
Key Considerations – cont’d
• Objective and Timeline • Background • Key Considerations • Proposed Changes • Next Steps
13
Agenda
14
Proposed Changes
• CFF LDC Report submission will be used as the LDC funding request mechanism to IESO. LDC invoices are not required by IESO for payment
• Payments will follow Physical Market Settlement Schedule and Payments Calendar: http://www.ieso.ca/Pages/Participate/Calendars/2016-Physical-Market-SSPC.aspx
• CFF quarterly reconciliations will take place to settle other CDM funding discrepancies. Comparison of LDC invoice(s) to LDC Report(s) is no longer required
15
Proposed Changes – cont’d
• Quarterly reconciliation variances will be applied by IESO on the LDC’s next applicable Monthly Market invoice (based on LDC CDM Plan’s invoicing/reporting frequency), and will be clearly outlined on the Market settlement statement issued for the last day of the month
• General inquires related to CDM program settlements will continue to be directed to [email protected]
• Monthly invoice inquiries other than CDM program settlements continue to follow current “Notice of Disagreement” (NOD) process
• Instructions for submitting a NOD can be found at http://www.ieso.ca/Documents/training/Online-IESO/Managing_Notice_of_Disagreement.pdf
16
Proposed Changes – cont’d
• The CDM amount payable to the LDC will be reflected on its monthly Market invoice in one charge code # 1416 named: ‘Conservation and Demand Management – Compensation Settlement Credit’
• Tax applicable to CDM amounts will be reflected as part of charge code 900 (GST/HST credit) or 950 (GST/HST debit) on the invoice
17
Sample Monthly Market Invoice
18
Proposed Changes – cont’d
• Monthly settlement statements will provide LDCs with details of all CDM amounts invoiced to the IESO in the previous month, applicable taxes, and a summary line with the total before-tax payment
MP 1416 31-Oct-15 0 0 8941.00 ONZN P 0.13 1162.33 CDM - FCR Province-wide Program 1 Admin for September 2015MP 1416 31-Oct-15 0 0 161794.00 ONZN P 0.13 21033.22 CDM - FCR Province-wide Program 2 Admin for September 2015MP 1416 31-Oct-15 0 0 44750.00 ONZN P 0.13 5817.5 CDM - FCR Province-wide Program 3 Admin for September 2015MP 1416 31-Oct-15 0 0 43246.00 ONZN P 0.13 5621.98 CDM - FCR Province-wide Program 4 Admin for September 2015MP 1416 31-Oct-15 0 0 23617.00 ONZN P 0.13 3070.21 CDM - FCR Province-wide Program 5 Admin for September 2015MP 1416 31-Oct-15 0 0 146693.00 ONZN P 0.13 19070.09 CDM - FCR Province-wide Program 6 Admin for September 2015MP 1416 31-Oct-15 0 0 160451.00 ONZN P 0.13 20858.63 CDM - FCR Province-wide Program 1 Incentives for September 2015MP 1416 31-Oct-15 0 0 189798.00 ONZN P 0.13 24673.74 CDM - FCR Province-wide Program 2 Incentives for September 2015MP 1416 31-Oct-15 0 0 109300.00 ONZN P 0.13 14209 CDM - FCR Province-wide Program 3 Incentives for September 2015MP 1416 31-Oct-15 0 0 199606.00 ONZN P 0.13 25948.78 CDM - FCR Province-wide Program 4 Incentives for September 2015MP 1416 31-Oct-15 0 0 180779.00 ONZN P 0.13 23501.27 CDM - FCR Province-wide Program 5 Incentives for September 2015MP 1416 31-Oct-15 0 0 78337.00 ONZN P 0.13 10183.81 CDM - FCR Province-wide Program 6 Incentives for September 2015MP 1416 31-Oct-15 0 0 22552.00 ONZN P 0.13 2931.76 CDM - P4P Province-wide Program 1 for September 2015MP 1416 31-Oct-15 0 0 191555.00 ONZN P 0.13 24902.15 CDM - P4P Province-wide Program 2 for September 2015MP 1416 31-Oct-15 0 0 97645.00 ONZN P 0.13 12693.85 CDM - CFF Quarterly reconciliation adjustment for July -September 2015MP 1416 31-Oct-15 0 0 167666.00 ONZN P 0.13 21796.58 CDM - CFF Errors and omissions for August 2015MP 1416 31-Oct-15 0 0 14183.00 ONZN P 0.13 1843.79 CDM - CFF Value added services (CR) for September 2015MP 1416 31-Oct-15 0 0 -14183.00 ONZN P 0.13 -1843.79 CDM - CFF Value added services (DR) for September 2015
19
Copy of CDM Statement posted by IESO
LDC Report to IESO (report represents the invoice)
Proposed CFF Settlement Process
Notice of Disagreements resolved
CDM
Payment Processed by IESO
Quarterly Reconciliation and/or CDM related inquiries resolved
Monthly Settlement Statement issued by
IESO
Markets
20
Sample Market Settlement Schedule
Owner Activity Date LDC, CDM LDC Report Submission to LDC
Extranet (Period: September 2015)
By the 15th day of the following month (October 15, 2015)
IESO, Markets
Preliminary Settlement Statement issued to LDC via IESO Reports site
November 16, 2015
IESO, Markets
Invoice issued to LDC via IESO Reports site
November 16, 2015
LDC, Markets
Payment issued to IESO, Markets * November 18, 2015
IESO, Conservation
Copy of CDM Details from Preliminary Settlement Statement posted on LDC, Extranet
November 20, 2015
IESO, Markets
Final Settlement Statements issued to LDC, Markets
November 30, 2015
* If amount on invoice is owed to the LDC, payment is issued by IESO on November 20, 2015
21
LDC Joint CDM Plans
LDC Joint CDM Plan Monthly Market Invoice (including CDM amount)
issued to:
CDM Payment included on Market Invoice of:
Settlement Statement (including CDM details) issued
to:Agent is LDC Each LDC Each LDC Each LDC, and copy of the
statement(s) posted on LDC(s) Extranet(s)
Agent is LDC w/Direction of Funds (DoF)
Agent Agent Agent, and copy of the statement(s) posted on LDC(s) Extranet(s)
Agent is not LDC Each LDCNote: non-LDC Agent does not receive Market invoice(s)
Each LDC Each LDC, and copy of the statement(s) posted on LDC(s) Extranet(s)
Agent is not LDC w/DoF between LDCs *
LDC assigned in DoF including other LDC(s) CDM amount(s)
LDC assigned in DoF LDC assigned in DoF; and copy of the statement(s) posted on LDC(s) Extranet(s)
* LDCs cannot direct funds to a non-LDC Agent
22
LDC Joint CDM Plans - cont’d
• Other considerations for LDCs that are Agents in Joint CDM Plans with direction of funds (DoF):
– The Agent LDC that is receiving the funds on behalf of other LDC(s) as per DoF can potentially see lower risk of margin calls as the CDM amounts increase
– Monthly settlement statements will outline CDM amounts for each LDC individually
• Request for feedback
– Feedback is due on December 16, 2015. It can include:
• Feedback on Stakeholder Engagement Plan
• Comments on the proposed changes
• Recommendations for implementation of proposed changes
– Please send it to:
23
Stakeholder Feedback
• Objective and Timeline • Background • Key Considerations • Proposed Changes • Next Steps
24
Agenda
• Responses to feedback will be posted on the initiative’s webpage on December 23, 2015 (http://www.ieso.ca/Pages/Participate/Stakeholder-Engagement/LDC-IESO-Conservation-Settlement-Process-Update.aspx)
• The Final Discussion Document will be posted on the initiative’s webpage in Mid January, 2016
• Changes to the settlement process will be reflected in the ECA’s “Settlement Information Requirement Rules” in January, 2016
• A webinar to share new settlement process will be in Mid January, 2016
• Proposed settlement process implementation date February 1, 2016
25
Next Steps