NOTICE DATE: September 24, 2024

NOTICE TYPE: M-B092424-01 Settlement

SHORT DESCRIPTION: Notice of Proposed Alternative Method to Distribute Disgorged Excess Revenues in PUC Docket No. 56641

INTENDED AUDIENCE: Qualified Scheduling Entities (QSEs) that represent a Load Serving Entity (LSE)

DAYS AFFECTED: January 31, 2023

LONG DESCRIPTION: On July 25, 2024, the Public Utility Commission of Texas (Commission) issued an order in PUC Docket No. 56459 requiring the disgorgement of $82,994.52 (the "disgorged funds") in excess revenues received by Mercuria Energy America, LLC (Mercuria) as a result of a January 31, 2023, uneconomic direct current (DC) tie export transaction.

Commission rule 16 Texas Administrative Code § 22.246(k) describes the default method by which ERCOT should distribute disgorged revenues, but also provides that the Commission may authorize a different distribution method if it determines such a method is appropriate. The Commission, in its July 25, 2024 order, determined that a distribution method that differs from the default method is appropriate and directed Commission Staff to open PUC Docket No. 56641 and propose an appropriate method of distribution.

Commission Staff, in consultation with ERCOT Staff, has recommended an alternative distribution methodology that is more consistent with ERCOT’s current resettlement practices of Operating Days. The proposed alternative distribution method calls for ERCOT to:

1. identify the Monthly Load Ratio Share and Monthly Load Ratio Share at the Congestion Management Zone from the most recent market settlement that was utilized for the issuance of Invoices for the impacted Operating Month;

2. remove the load associated with the Mercuria QSE during the peak load 15-minute Settlement Interval for the impacted Operating Month;

3. calculate a new Monthly Load Ratio Share and Monthly Load Ratio Share at the Congestion Management Zone for the impacted Operating Month for the remaining QSEs;

4. calculate the amount due to each QSE by multiplying the non-zonal disgorged dollar amount by the Monthly Load Ratio Share calculated in step iii;

5. calculate the amount due to each QSE by multiplying the zonal disgorged dollar amount by the Monthly Load Ratio Share at the Congestion management Zone calculated in step iii;

6. sum the values from step iv and step v for each QSE;

7. send a Miscellaneous Invoice to all affected QSEs[1]; and

8. pay the amounts owed to the affected QSEs as reflected on the Invoices.

If a QSE that is eligible for a distribution, or the Counter-Party for that QSE, has failed to timely pay any payment of Financial Security obligation owed to ERCOT or its designee, if appliable, then ERCOT proposes to withhold the distribution payment and apply it towards the amounts owed by the QSE or the Counter-Party for the QSE.

ACTION REQUIRED: Market Participants and other interested persons who wish to intervene in or comment on these proceedings must file a motion to intervene or a statement of position in PUC Docket No. 56641 by the stated deadline. Filings may be submitted online through the PUC’s Interchange Filer application (https://interchange.puc.texas.gov/filer) or by mailing a copy of the pleading to the Public Utility Commission of Texas at 1701 N. Congress Ave., P.O. Box 13326, Austin, Texas 78711-3326. The pleading must reference PUC Docket No. 56641 and must be received by the PUC no later than 3:00 pm on October 25, 2024.

Further information may also be obtained by calling the Public Utility Commission at (512) 936-7120 or (888) 782-8477. Hearing and speech-impaired individuals with text telephone (TTY) may contact the Commission at (512) 936-7136.

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 email at ClientServices@ercot.com.

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