December 2, 2015 Agenda Objective and Timeline Background - - PowerPoint PPT Presentation

Conservation First Framework Payment Transition to Market Invoice

December 2, 2015

• Objective and Timeline
• Background
• Key Considerations
• Proposed Changes
• Next Steps

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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

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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

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Key Principles

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Timelines

Date Activities Expected Action December 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

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Conservation Settlements Background

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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
• pportunities 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

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Conservation Settlements Background – cont’d

• Objective and Timeline
• Background
• Key Considerations
• Proposed Changes
• Next Steps

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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

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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

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Key Considerations – cont’d

• Objective and Timeline
• Background
• Key Considerations
• Proposed Changes
• Next Steps

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Agenda

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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

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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 LDC.Support@ieso.ca

• 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

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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

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Sample Monthly Market Invoice

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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 8941.00 ONZN P 0.13 1162.33 CDM - FCR Province-wide Program 1 Admin for September 2015 MP 1416 31-Oct-15 161794.00 ONZN P 0.13 21033.22 CDM - FCR Province-wide Program 2 Admin for September 2015 MP 1416 31-Oct-15 44750.00 ONZN P 0.13 5817.5 CDM - FCR Province-wide Program 3 Admin for September 2015 MP 1416 31-Oct-15 43246.00 ONZN P 0.13 5621.98 CDM - FCR Province-wide Program 4 Admin for September 2015 MP 1416 31-Oct-15 23617.00 ONZN P 0.13 3070.21 CDM - FCR Province-wide Program 5 Admin for September 2015 MP 1416 31-Oct-15 146693.00 ONZN P 0.13 19070.09 CDM - FCR Province-wide Program 6 Admin for September 2015 MP 1416 31-Oct-15 160451.00 ONZN P 0.13 20858.63 CDM - FCR Province-wide Program 1 Incentives for September 2015 MP 1416 31-Oct-15 189798.00 ONZN P 0.13 24673.74 CDM - FCR Province-wide Program 2 Incentives for September 2015 MP 1416 31-Oct-15 109300.00 ONZN P 0.13 14209 CDM - FCR Province-wide Program 3 Incentives for September 2015 MP 1416 31-Oct-15 199606.00 ONZN P 0.13 25948.78 CDM - FCR Province-wide Program 4 Incentives for September 2015 MP 1416 31-Oct-15 180779.00 ONZN P 0.13 23501.27 CDM - FCR Province-wide Program 5 Incentives for September 2015 MP 1416 31-Oct-15 78337.00 ONZN P 0.13 10183.81 CDM - FCR Province-wide Program 6 Incentives for September 2015 MP 1416 31-Oct-15 22552.00 ONZN P 0.13 2931.76 CDM - P4P Province-wide Program 1 for September 2015 MP 1416 31-Oct-15 191555.00 ONZN P 0.13 24902.15 CDM - P4P Province-wide Program 2 for September 2015 MP 1416 31-Oct-15 97645.00 ONZN P 0.13 12693.85 CDM - CFF Quarterly reconciliation adjustment for July -September 2015 MP 1416 31-Oct-15 167666.00 ONZN P 0.13 21796.58 CDM - CFF Errors and omissions for August 2015 MP 1416 31-Oct-15 14183.00 ONZN P 0.13 1843.79 CDM - CFF Value added services (CR) for September 2015 MP 1416 31-Oct-15

• 14183.00 ONZN

P 0.13

• 1843.79 CDM - CFF Value added services (DR) for September 2015

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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

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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, Conservat ion 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

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LDC Joint CDM Plans

LDC Joint CDM Plan Monthly Market Invoice (including CDM amount) issued to: CDM Payment included

• n 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 LDC

Note: 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

• f the statement(s) posted on

LDC(s) Extranet(s)

* LDCs cannot direct funds to a non-LDC Agent

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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: stakeholder.engagement@ieso.ca

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Stakeholder Feedback

• Objective and Timeline
• Background
• Key Considerations
• Proposed Changes
• Next Steps

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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

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Next Steps