Z2 PPTF Meeting Example #1 Everyone Takes the Payment Plan (worst - - PowerPoint PPT Presentation

Z2 PPTF Meeting

Example #1

• Everyone Takes the Payment Plan (worst case)
• FERC interest accrues on payment balances

Example #2

• Only a few take the Payment Plan (medium case)
• Companies owed credits get majority of full payments up

front

• FERC interest accrues on payment balances

Example #3

• No Payment Plan needed (best case)
• Everyone is able to pay full amount
• Companies owed credits get paid in full in one payment.
• Quickest payback

Levelized Payment Plan Option

Assumptions

• Total Payments equal $12M
• Monthly Payments due in 12 months
• FERC Interest rate applies to the outstanding balance and begins in February
• Payee has option to pay entire amount early, or follow interval payments
• No custom payment plan for each member
• Pay per standard tariff terms

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total Payment 12,000 Payment Plan Amount 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 Z2 Amount 11,000 10,000 9,027 8,052 7,073 6,092 5,109 4,123 3,134 2,142 1,148 151 Payment Plan Interest

• 27

24 22 19 17 14 11 8 6 3

• 2,000

4,000 6,000 8,000 10,000 12,000 Total Payment Payment Plan Amount Z2 Amount Payment Plan Interest

(Dollars in thousands)

Example #4

• Billing Plan Option
• SPP tries to level out payments in aggregate by grouping years
• SPP staff prefers this option, no manual adjustment to current
• processes. More efficient Admin and Auditing requirements.
• Owed amounts may vary widely by company

Staggered Billing Plan Option

Assumptions

• Total Payments equal $12M
• Quarterly Payments paid each quarter
• No FERC Interest on outstanding balance applied
• No option for payee to pay entire amount early, must pay invoice as received
• No custom payment plan for each member
• Pay per standard tariff terms

(Dollars in thousands)

Qtr 1 Qtr 2 Qtr 3 Qtr 4 Total Payment 12,000 11,750 7,750 1,750 Payment Plan Amount 250 4,000 6,000 1,750

• 2,000

4,000 6,000 8,000 10,000 12,000 Total Payment Payment Plan Amount

OASIS Requests by group

# of requests Companies Less than 5 21 53% More than 5 but less than 10 10 25% More than 10 but less than 15 1 3% More than 15 but less than 20 5 13% More than 20 but less than 25 2 5% More than 25 1 3%