Transmission Settlements & Accounting

Transmission Settlements & Accounting

Fundamentals & Best Practices

July 21-22, 2021 | Online :: Central Time

Transmission, like so many other aspects of the grid, is taking on expanded roles.  The settlements and accounting processes associated with transmission, which until recently were pretty straightforward, are challenged to keep up.  Transmission owners and customers must ensure that their own internal processes properly track the accelerating complexity, especially the increased computations and analysis are now required by regulators and system operators.  This is even more important since software tools and automated processes – the norm for market settlements – are less frequently deployed in finalizing transmission settlements.

This course will spell out the fundamentals and best practices of transmission settlements, A to Z.  it is the perfect primer for those new to settlements, and full of granular detail for seasoned settlement professionals demanding sharper definition on new regulations and processes.  A post-course workshop will provide much needed definition and clarity for ensuring a smooth and satisfactory translation of FERC’s return-on-equity (ROE) dictates to the transmission settlement bottom-line, with special attention to the ISOs that must address those issues.

Learning Outcomes

Attendees will cover content, engage in discussions, and participate in exercises that will allow them to:

  • Examine transmission settlement design and processes
  • Assess the correlation between transmission rate-making and tariffs to accounting and settlements
  • Explain settlement methodology and the basis for settlement pricing values
  • Identify transmission usage billing determinants
  • Illustrate how to unpack transmission schedules, statements and invoices
  • Analyze the timing, validation and reconciliation of transmission settlements and their connection to accounting
  • Compare the shadow settlement and trend analysis approaches of energy market vs transmission settlements
  • Evaluate the process adjustments to transmission settlements required by FERC’s ROE Order
  • Estimate how FERC Order 2222 for DERs will affect transmission settlements and accounting
  • Discuss settlements challenges, tips and traps

Credits

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EUCI has been accredited as an Authorized Provider by the International Association for Continuing Education and Training (IACET).  In obtaining this accreditation, EUCI has demonstrated that it  complies with the ANSI/IACET Standard which is recognized internationally as a standard of good practice. As a result of their Authorized Provider status, EUCI is authorized to offer IACET CEUs for its programs that qualify under the ANSI/IACET Standard.

EUCI is authorized by IACET to offer 1.0 CEUs for this course and 0.4 CEUs for the workshop.

Requirements for Successful Completion of Program 

Participants must log in each day and be in attendance for the entirety of the course to be eligible for continuing education credit. 

Instructional Methods

PowerPoint presentations, group discussions, and active participation

Who Should Attend

Traditional utilities, transmission organizations, power marketing entities. Balancing authorities and state regulatory staff whose roles focus on transmission tariffs, rates and settlements from the following divisions:

  • Transmission settlements
  • Market settlements
  • Energy accounting and general accounting
  • Middle and back office Power delivery
  • System operations
  • Finance
  • Regulatory policy and compliance
  • State regulatory staff

Agenda

Wednesday, July 21, 2021 : Central Time

8:45 – 9:00 a.m. :: Log In

9:00 – 9:15 a.m. :: Overview & Introduction

9:00 a.m. – 5:00 p.m. :: Course Timing

9:15 a.m. – 12:30 p.m. :: Transmission Regulation And Rates Background

(includes break)

Regulatory Foundations

  • Federal Power Act structure and principles
  • FERC Orders and processes
    • 888, 889, 890, 1,000 and 2000
    • OATT (Open Access Transmission Tariff)
  • OASIS (Open Access Same-Time Info System)
  • FERC vs State regulatory authority and their relationship to transmission settlements
    • Vertically integrated vs independent stand-alone transmission company 
    • Rate/PSCR cases versus FERC-approved templates
  • Differentiating between transmission settlement parties
    • Transmission Owner
    • Tariff Customer
      • Transmission Customer
      • Market Participants
    • System operators
  • Special issue – understanding the turbulent history of return on equity (ROE) concept for TOs

Rate-making, Tariffs and Their Relationship to Settlements

  • Relevant FERC pages 
  • Main tariff transmission schedules 
  • Network vs regional cost sharing 
  • Submittal of schedules and attachments
  • Capturing settlement data correctly and “TS-12”
  • True-up of formula rate
    • Forward-looking
    • Historical

Comparison of Different Transmission Schedules (e.g., Schedules 7 firm service, 8 non-firm, 9 network service contracts, etc)

  • Theory
  • Billing determinants
  • What they mean
  • How they’re settled (usage, contracts, firm, non-firm, etc)

12:30 – 1:15 p.m. :: Lunch Break

1:15 – 5:00 p.m. :: Transmission Settlements Processes

(includes break)        

Perfecting the Basics

  • Unpacking transmission settlements
  • Transmission formula rate
  • ISO rates files
  • Reconciling data submittals to actual transmission settlements
    • Revenue files (OSIRs)
    • Transmission settlements files
    • Invoices
  • Validating multiple transmission settlements for the same month
    • TS-0, TS-1, etc

ISO Billing Protocols

  • Connecting invoices (OISR), bills and files
  • Tying out and validating
  • Shadow settlements for peak load data or revenues received and settlements
  • Grandfather transactions
  • Non-OATT link between ISOs’ and TOs’ allocation of transmission capacity based on a formula rather than the actual transmission path
  • Cost share allocation projects and how those revenue requirements are determined
  • Review of cost-sharing on formula rate
  • For new ISO members or market participants, impact to transmission billing
  • Contract path vs electron flow
  • NERC TLR process 

Timing, Validation and Reconciliation of Transmission Settlements and Connection to Accounting

  • Are billed transmission costs recorded separately from ancillary transmission fees?
  • Are transmission reservation companies shadowing the transmission costs to ensure billing validation and accuracy?
  • Unpacking transmission settlements
  • Reconciling data submittals to actual transmission settlements
  • Validating multiple transmission settlements for the same month
  • What about trend analyses and “shadow” settlements?

Identifying Transmission Usage Billing Determinants

  • How various TOs deal w/this aspect
  • Referencing an ISO’s Best Practices Manual (BPM) for guidance
  • Adding in BTM generation such as DERs
  • Ability of transmission reservation companies to track peak in data and reporting
  • Network peak and volumetric consumption
  • Coincident and non-coincident peak
  • IT and metering systems to identify peak
  • Revenue Distribution Examples
    • Review a Schedule 7 and 8 reservation
      • TPF (transaction participation factors)
      • GBV (Transmission investment)
    • Schedule 9
      • Distributed to host zone TO
      • Joint-pricing zone allocations
    • Schedule 26
      • Proportionate share of network upgrade charge collected
    • Schedule 26A
      • Monthly weighting factor

 5:00 p.m. :: Course Adjourns for the Day

Thursday, July 22, 2021 : Central Time

8:45 – 9:00 a.m. :: Log In

9:00 a.m. – 12:15 p.m. :: Course Timing

9:00 a.m. – 12:15 p.m. :: Current Transmission Settlements Issues

(includes break)

Related Issues/Elements

  • RTO Credit Policies
    • Credit Exposure Calculation
  • Settlement System Replacement by ISOs
  • Scheduling changes
  • Internal controls – Sarbanes Oxley compliance
    • SSAE 18_SOC 1 Type II Report
    • Bridge Letter

Transmission Projects Across ISO Seams

  • Apportionment of cost recovery
  • Documentation
  • Settlement
  • Transmission studies

Outside-of-Market Transactions

  • Bilateral w/non-ISO party
  • Across ISO seams
  • Non- OATT-based transactions

Addressing Transmission and System Load-shedding Events and  Anomalies

  • Correlation between transmission and energy flows

FERC Order 2222 for DERs

  • How to incorporate DERs in wholesale markets
  • Aggregation and what it looks like on the transmission side

12:15 p.m. :: Course Adjournment

Workshop

FERC Return-On-Equity (ROE) Order

Important Background and Context for ISOs, Transmission Owners and Customers

Thursday, July 22, 2021 : Central Time

Overview

FERC and Return on Equity (ROE) concepts have been a hot topic with recent FERC orders establishing a new ROE methodology, which includes ranges within which existing electric utility transmission ROEs will be presumed to remain just and reasonable. In calculating updated ROEs, FERC now will make use of both the two-step discounted cash flow (“DCF”) analysis and the capital-asset pricing model (“CAPM”) methodology. The DCF and CAPM analyses each will produce an ROE zone of reasonableness, which then will be weighted equally and averaged to create a composite zone of reasonableness. If a utility has any incentive ROE adders, its overall ROE (i.e., the base ROE plus incentive adders) will be capped at the upper end of the composite zone of reasonableness.

These and other changes instituted in MISO and other ISOs to conform with the re-formulated ROE requirements require transmission owners (TOs) and customers (TCs), utilities and other market participants to modify their settlements processes.  This workshop will provide guidance and demonstrations that will bring clarity to both general as well as ROE-specific settlement processes.

Learning Outcomes

Attendees will cover content, engage in discussions, and participate in exercises that will allow them to:

  • Examine the turbulent history of Return on Equity (ROE) for Transmission Owners
  • Explain the high-level fundamentals of the CAPM and two-step DCF analyses
  • Detail MISO’s role in ROE Refunds
  • Analyze incentive adders and zone of reasonableness
  • Identify and account for ROE adjustments from settlement files
  • Incorporate ROE adjustments into subsequent rate-making and accounting processes

Agenda

12:45 – 1:00 p.m. :: Log In

1:00 – 1:15 p.m. :: Overview and Introductions

1:15 – 5:00 p.m. :: FERC Return on Equity (ROE) for Transmission Owners

(includes break)

  • History and timeline of events
  • 2020 FERC Order Opinion 569A
    • Affected ISOs’ approach to coordinating implementation
    • Relevance to other ISOs not subject to the Order

Specific Settlement Issues Relating to ROE

  • Understanding high-level fundamentals of the CAPM and two-step DCF analysis
  • ISO’s role in ROE refunds
  • Understanding incentive adders and zone of reasonableness
  • Process – what and why
  • Avoidance of certain charges
  • Revenue requirement accuracy determination and validation dilemma

5:00 p.m. :: Workshop Adjournment

Instructors

Christina S. Drake, Senior Manager – Transmission Settlements, Midcontinent ISO (MISO)

Christina Drake is Senior Manager of Transmission Settlements at the Midcontinent ISO (MISO).  During her 19 years at MISO, her operational and managerial experience encompasses transmission and generation outage coordination, loss of load expectation planning studies, event analysis, transmission and distribution planning, real-time operations engineering, NERC certified Reliability Coordination, quality management and 12 years of coaching, development, and management.  Ms. Drake earned a bachelor’s degree in electrical engineering from Rose-Hulman Institute of Technology.

Chris Devon, Director – Market Intelligence (West), Customized Energy Solutions

Chris Devon is Director of Market Intelligence (West) for Customized Energy Solutions.  He joined the company in 2020, bringing expertise in organized market policy development and regulatory coverage. Prior to joining CES, he was a lead and senior policy developer with the California ISO (CAISO). In that role, he led numerous stakeholder initiatives and developed proposals to enhance and establish new policies. His prior experience includes designing policy for resource adequacy, transmission cost recovery, and emerging technologies.  Before joining CAISO in 2015, Mr. Devon advised the Michigan Public Service Commission on wholesale energy matters and represented the state’s interests in the stakeholder processes of MISO and PJM Regional Transmission Organizations.  He obtained a BA in economics from Michigan State University.

Jason Gray, Partner, Duncan & Allen LLP

Jason Gray is Partner at Duncan & Allen LLP.  Within the core practice areas of utility regulation and administrative law, he provides strategic advice and counsel to a wide range of clients regarding matters before the Federal Energy Regulatory Commission (FERC), state public utility commissions, state courts, federal courts, and legislative bodies.  Mr. Gray has particular experience guiding clients through litigation, having served as lead counsel in litigated proceedings involving electric rates and tariffs, gas rates and tariffs, and utility mergers.  Beyond his practice in utility-related litigation, he also rehepresents clients in all phases of appeals of agency decisions.  In addition to his experience in litigation and appellate matters, Mr. Gray advise clients with respect to rulemaking proceedings and policy matters, legislation, Regional Transmission Organization/Independent System Operator stakeholder processes, matters involving Hinshaw and section 311 pipelines, compliance and enforcement matters, formal and informal settlement negotiations, transactional matters, complaints, matters involving the Public Utility Regulatory Policies Act, and the development of energy projects. Prior to joining Duncan & Allen in 2018, Mr. Gray was a partner at Duncan, Weinberg, Genzer & Pembroke, P.C.—a Washington, DC-based law firm that he joined in 2008.  Prior to that, Mr. Gray served as Assistant General Counsel and Litigation Counsel to the Kansas Corporation Commission (KCC).

Matthew L. Bly, Partner, Duncan & Allen LLP

Matthew L. Bly joined Duncan & Allen as a Partner in 2020. His practice primarily focuses on matters affecting the U.S. energy and utility industries, including issues such as: utility rate design and regulatory ratemaking; contract drafting, negotiation, and interpretation; utility depreciation, accounting, and financial reporting requirements; mergers and acquisitions; transmission planning and systems integration; open-access requirements; federal vs. state jurisdiction; the governance, restructuring, expansion, and operation of organized wholesale energy markets; greenhouse gas regulation and renewable resource investment incentives; energy efficiency and sustainability; and Bulk Power System reliability standards, compliance, audits, and enforcement.  He has represented clients on a wide range of matters coming before the Federal Energy Regulatory Commission (FERC), the U.S. Department of Energy, the U.S. Department of Agriculture, the U.S. Courts of Appeals for the District of Columbia and Ninth Circuits and various state regulatory commissions, Mr. Bly has served as a key advisor to numerous clients that include public power entities, municipalities and rural electric cooperatives, states and state agencies, large energy users, independent power producers, Native American Tribes, trade organizations, and grid-edge technology companies, among others.

Chase Luedtke, Manager – Transmission Accounting, Xcel Energy

Chase Luedtke is Manager of Transmission Accounting at Xcel Energy.  Since he joined the utility in 2017, he has served in transmission accounting, first as Financial Consultant and now as Manager.  Prior to that, over a 4 ½ year period he was senior associate and audit manager at EKS&H LLLP.  He also served at McGee, Hearne & Paiz, LLP as an Associate and Senior Associate from 2010 through 2012.  He earned his Bachelor’s degree in Accounting and Finance at the University of Northern Colorado.

Kirk Parish, Manager – Transmission Revenues, ITC Holdings

Kirk Parish is Manager of Transmission Revenues at ITC Holdings.  His work for the transmission owner spans 14 years. He is responsible for the company’s transmission revenues, settlements and billings, regulatory accounting, consolidating and reporting functions.  His responsibilities also include working closely with ITC’s IT dept to evaluate load, regulatory and legal as well as correspondence with other transmission owners, and interaction with ISOs in which the company is active.  Before joining ITC, Mr. Parish served at DTE for 5 years, supporting transmission expense and energy market power purchase functions.  Prior to that, he was an assistant controller at TRW Automotive and senior auditor in public accounting at Arthur Andersen.  He earned bachelor’s degrees in accounting and finance from Oakland University in Rochester Michigan.

Online Delivery

We will be using Microsoft Teams to facilitate your participation in the upcoming event. You do not need to have an existing Teams account in order to participate in the broadcast – the course will play in your browser and you will have the option of using a microphone to speak with the room and ask questions, or type any questions in via the chat window and our on-site representative will relay your question to the instructor.

  • IMPORTANT NOTE: After November 30 you will not be able to join a Teams meeting using Internet Explorer 11. Microsoft recommends downloading and installing the Teams app if possible. You may also use the Edge browser or Chrome.
  • You will receive a meeting invitation will include a link to join the meeting.
  • Separate meeting invitations will be sent for the morning and afternoon sessions of the course.
    • You will need to join the appropriate meeting at the appropriate time.
  • If you are using a microphone, please ensure that it is muted until such time as you need to ask a question.
  • The remote meeting connection will be open approximately 30 minutes before the start of the course. We encourage you to connect as early as possible in case you experience any unforeseen problems.

Register

Please Note: This event is being conducted entirely online. All attendees will connect and attend from their computer, one connection per purchase. For details please see our FAQ

If you are unable to attend at the scheduled date and time, we make recordings available to all registrants for three business days after the event

Event Standard RateAttendees
Single Connection - Transmission Settlements & AccountingUS $ 1195.00
Pack of 5 connectionsUS $ 4,780.00
Pack of 10 ConnectionsUS $ 8,365.00
Pack of 20 ConnectionsUS $ 14,340.00
Call us at 303.770.8800 if you have any specific questions on the volume discounts
* all other discounts do not apply to license packs

This event has the following workshops:

FERC Return-On-Equity (ROE) OrderUS $ 495.00

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Take advantage of these discounts!

  • Attend the Course and workshop and pay US $ 1,595.00 per attendee (save US $ 95.00 each)

Cancellation Policy

Your registration may be transferred to a member of your organization up to 24 hours in advance of the event. Cancellations must be received on or before June 18, 2021 in order to be refunded and will be subject to a US $195.00 processing fee per registrant. No refunds will be made after this date. Cancellations received after this date will create a credit of the tuition (less processing fee) good toward any other EUCI event. This credit will be good for six months from the cancellation date. In the event of non-attendance, all registration fees will be forfeited. In case of conference cancellation, EUCIs liability is limited to refund of the event registration fee only. For more information regarding administrative policies, such as complaints and refunds, please contact our offices at 303-770-8800

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