NOTICE DATE:
January 20, 2009
NOTICE TYPE:
M-B012009-01 Settlements
SHORT
DESCRIPTION: Uplift Invoice
INTENDED
AUDIENCE: QSE
Financial Personnel
DAY AFFECTED:
Invoices due January 27, 2009
LONG
DESCRIPTION: Market
Participants are aware that the ERCOT Region experienced several “Mass
Drop” scenarios as a result of defaulting Qualified Scheduling Entities
(“defaulting QSEs”) in the summer of
2008. The defaulting QSEs include Pre-Buy Electric,
LLC, National Power Company Inc., Hwy 3 MHP LLC, Sure Electric LLC dba Riverway Power Company and
Leach Energy Trading LLC. In each
instance, the defaulting QSEs engaged in financial
transactions with ERCOT and owe monies to ERCOT as a result of those
transactions.
Paragraph
5 of Section 9.4.4, Partial Payments, of the ERCOT Protocols provides:
One hundred eighty (180)
days following a short pay occurrence, if sufficient funds continue to be
unavailable for ERCOT to pay all amounts in full (excluding interest or late
fees) to short paid Entities, and the short paying Entity is not in compliance
with a payment plan designed to enable ERCOT to pay all amounts in full
(excluding interest or late fees) to short paid Entities, the total short pay
amount, less the total payments expected from a payment plan, will be collected from the QSEs representing LSEs, on a Load Ratio Share basis, using the Load Ratio
Share for the calendar month three (3) months prior to the date on which the
Invoice is issued, and paid to the QSEs that were
previously short paid.
ERCOT will cease charging Late Fees to the default Entity when the
conditions initiating Uplift are met.
Any uplifted short payment amount greater than two
and one half million dollars ($2,500,000) shall be scheduled such that two and
one half million dollars ($2,500,000) is charged on each set of invoices until
the total short payment amount is uplifted. Short pay Invoices shall be issued at
least thirty (30) days apart from each other. Payments will be due on the date
specified on the short pay Invoice.
Any short and late payments will be handled pursuant to Section 9.4.4,
Partial Payments and 9.4.6, Late Fees, respectively. (emphasis
added)
Currently,
the defaulting QSEs do not have payment plans and
are, therefore, “not in compliance with a payment plan designed to enable
ERCOT to pay all amounts in full to short paid Entities.” Consequently, pursuant to the ERCOT
Protocols, ERCOT intends to begin the process of uplifting to QSEs representing LSEs the
principal amount remaining on the defaulting QSEs’
obligations to ERCOT over the next couple months.
On
Tuesday, January 20, 2009, ERCOT will send invoices totaling $2,500,000.00 to QSEs representing
LSEs based on their Load Ratio Share
(“LRS”) in October 2008.
This total amount represents the uplift of short payments by defaulting QSEs for Invoices due 06/06/08 – 06/21/08. The total amount may be adjusted due to
credits applied by ERCOT to the defaulting QSEs’
obligations. The Table below provides a breakdown of the total amount being
uplifted by each defaulting QSE.
QSE Name |
Total Invoices |
Less Payments Held |
Amount Uplifted |
Pre-Buy Electric LLC |
$218,300.78 |
$50,524.99 (1) |
$167,775.79 |
National Power Company, Inc. |
$1,384,780.17 |
$0.00 |
$1,384,780.17 |
Sure Electric LLC |
$185,749.20 |
$0.00 |
$185,749.20 |
Hwy 3 MHP LLC |
$730,313.30 |
$0.00 |
$730,313.30 |
Leach Energy Trading LLC |
$31,381.54 |
$0.00 |
$31,381.54 |
|
|
TOTAL |
$2,500,000.00 |
(1) Payments held from
credit invoices received.
PLEASE NOTE: The Invoice for this uplift will not be
posted on the website as the regular weekly invoices are. The Invoice will be delivered by e-mail
to your Authorized Representative, with a copy to your credit contact.
The
payment due date will be five (5) Business Days after the Invoice date (i.e. January 27, 2009). ERCOT intends to distribute the funds to
previously short paid entities on January 28, 2009.
Payments received should be applied
to oldest short-paid invoice first.
If necessary and as they arise,
ERCOT will uplift any additional unpaid amounts owed by the defaulting QSEs which may arise from Resettlements. Pursuant to the
ERCOT Protocols, ERCOT will calculate those uplifts (if necessary) using the
LRS for the calendar month three months prior to the date on which ERCOT issues
the Invoice. As ERCOT receives
monies associated with the outstanding debt, ERCOT will apply these monies to
the principal amount due from the defaulting QSEs
and, in turn, distribute the monies received to previously short paid entities. Please note that since Late Fees
were not collected from the defaulting entities, distributions to short-paid
Entities will be net of Late Fees previously credited for the above listed
entities.
ACTION
REQUIRED: The payment due date will be five (5)
Business Days after the Invoice date (i.e. January 27, 2009).
CONTACT:
If you have any questions, please
contact your ERCOT Account Manager. You may also call the general ERCOT Client Services
phone number at (512) 248-3900 or contact ERCOT Client Services via e-mail at [log in to unmask].
If you are
receiving e-mail from an ERCOT distribution list that you no longer wish to
receive, please follow this link in order to unsubscribe from this list: http://lists.ercot.com.
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