Common use of Distribution Of Deficiency Charges Clause in Contracts

Distribution Of Deficiency Charges. i. Recipients of capacity deficiency revenues are defined for each Interval as: (a) each owner of Capacity Resources with Unforced Capacity which it has committed to PJM prior to the start of the Interval for every day of the Interval; (b) each owner of newly certified Capacity Resources that become available during an Interval and which are committed to PJM for every remaining day of the Interval after such certification; and (c) each Party and each party to the RAA that has fully satisfied its obligation on every day during the Interval for which a deficiency charge has been established pursuant to this Agreement. Recipients shall share in any deficiency charges paid by any Party or by any party to the RAA during the Interval that has failed to satisfy its obligation and that have been received by the Office of the Interconnection, in accordance with subsection (ii) below. ii. A Recipient shall receive the higher of (a) a proportionate share of the deficiency charges for the Interval equal to ((x + y)/z); or (b) the alternate value of capacity times y. Except that, if, for an owner of Capacity Resources, the Alternate Value of capacity multiplied by (y) is greater than [(y) divided by (z)] times the total deficiency charges, then: (1) each owner of Capacity Resources with net capacity shall receive the Alternate Value of capacity multiplied by (y), provided, however, that if the sum of the payments thus calculated exceeds the total deficiency charges collected, each Capacity Resource owner will receive a proportional share of the total deficiency charges equal to (y) divided by the sum (y), times the total deficiency charges; and then (2) any remaining deficiency charges shall be allocated to each LSE that has fully satisfied its Accounted-For Obligation, where the share of each such LSE shall be (x) divided by the total of (x) for all LSEs. Where: x is the average MW of covered obligation for a Party for every day of the Interval. y is (a) the minimum MW of capacity, uncommitted to any LSE and committed and available to PJM prior to the start of the interval, if committed by a capacity owner for every day of the entire Interval, or (b) the minimum MW of capacity, uncommitted to any LSE and committed and available to PJM from a new Issued By: Xxxxx Xxxxxx Effective: June 1, 2003 Vice President, Governmental Policy Issued On: July 29, 2003 Filed to comply with order of the Federal Energy Regulatory Commission, Docket No. ER03-703-000, issued May 30, 2003, 103 FERC ¶ 61,250. PJM Interconnection, L.L.C. First Revised Sheet No. 40 First Revised Rate Schedule FERC No. 32 Superseding Original Sheet No. 40 resource, if committed by a capacity owner for every remaining day of the Interval after the capacity becomes available multiplied by the ratio of the remaining days to the total days in the Interval. z is the total of x and y for all Recipients A Recipient that commits the Unforced Capacity of a Capacity Resource to PJM for an Interval must commit the Capacity Resource for the entire duration of the Interval. A Party that commits the Unforced Capacity of a new Capacity Resource to PJM for the balance of an Interval must commit the Capacity Resources for the entire duration of the balance of the Interval. iii. for purposes of this Section D only, the alternate value of capacity (AV) shall be defined as: AV = F*16*OD Where: F equals (Average of the Forward Market Monthly On-Peak Energy Prices over the Interval for Cinergy Hub) minus (Average of the Forward Market Monthly On-Peak Energy Prices over the Interval for PJM West Hub) 16 is the number of on-peak hours per day OD is the number of On-Peak Days in the Interval This value will be determined for the five on-peak days (as defined in Schedules 7 and 8 of the PJM Open Access Transmission Tariff) preceding the 15th day of the month immediately prior to the beginning of an Interval. The forward prices used in the AV calculation shall be the weighted average of the prices published, on the identified day, in such trade publication(s) as are approved by the Reliability Committee and which shall be posted on the PJM web site. If no new index is determined prior to the beginning of an Interval the current index will be continued. iv. In the event all of the Parties and all of the parties to the RAA have incurred deficiency charges with respect to an obligation and there is no owner of Capacity Resources entitled to payments as described above, the deficiency charges shall be distributed as approved by the Reliability Committee. Issued By: Xxxxx Xxxxxx Effective: June 1, 2003 Vice President, Governmental Policy Issued On: July 29, 2003 Filed to comply with order of the Federal Energy Regulatory Commission, Docket No. ER03-703-000, issued May 30, 2003, 103 FERC ¶ 61,250. PJM Interconnection, L.L.C. Original Sheet No. 41 First Revised Rate Schedule FERC No. 32