Virtual Bid Rejection Using LIFO. Topics to Be Covered. Effective March 1, 2005 What’s Different How Will It Work Important Information. The Difference. Current Policy
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*ATTACHMENT LFinancial Assurance Policy for NEPOOL Members
*When the assigned value of INCs and DECs caused participant to exceed 100% of the Credit Test.
*Samples from Production indicate processing rates generally range from 10 to 30 bids per second.
All bids in “Buckets” 3 & 2 would be rejected as a result of exceeding 100% credit test.
Bids in Bucket 1 would be accepted, as removal of Buckets 2 & 3 results in the participant’s credit test value dropping below the 100% threshold.
Bucket 4 consists of INC offers offset by a greater MW qty of DEC bids from Bucket 3.
Sum of offsetting DEC bids is 522MW while INC offers = 318MW.
For purposes of calculating FA requirements, the INC offers are discarded while the DEC bids are multiplied by the $35/MWh proxy price.
The result is an Effective Value for Bucket 4 of $0, thus, rejection of Bucket 4 has no impact on the Credit Test Value
Bid Bucket 2
Bid Bucket 3
Offsetting INC / DEC Bids
Bid Bucket 4
Example Bids contained in 1 XML File Upload
Buckets 4 & 5 contain offsetting INCs with an Effective Value of $0.
If 400MW of bids were required to be removed in order to satisfy Credit Test Threshold, Buckets 3, 4 and 5 would be rejected.
Leaving only DECs from Buckets 1 & 2 to be accepted.
Same Bid portfolio from previous example.
Only difference is the Participant “paired” offsetting INCs & DECs in the file upload.
While the same # of bids are binned into each Bucket, in this case, Bucket 5 contains 2 DEC bids with a combined Effective Value necessary to meet the Credit Test Threshold.
Therefore, only Bucket 5 is rejected.