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| Q1 |
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| Ans |
Vesting contracts between the MSSL and generation companies
will be settled through the Energy Market Company's (EMC) settlement system. |
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| Q2 |
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| Ans |
a) The MSSL enters into Vesting Contracts on behalf of every
electricity consumer in Singapore. Being a counter party to Vesting Contracts,
the MSSL will settle them with generating companies through the EMC.
b) The MSSL will calculate debits and credits associated with the vesting
contracts for non-contestable consumers and contestable consumers.
c) The MSSL will calculate vesting contract data on a quarterly basis (every 3
months) on behalf of the EMA.
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| Q3 |
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| Ans |
The MSSL will use the vesting contract calculator (VCC)
application to calculate every three months:
. Hedge Price (HP) and Hedge Quantity (HQ) for generating companies
. Payment Reference Price (PRP) and Vesting Hedge Proportion (VHP) for
consumers.
All computations are calculated according to the EMA's methodology.
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| Q4 |
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| Ans |
The vesting contract quantities, prices and hedge proportions
are recalculated every 3 months. The MSSL completes the calculation for the
vesting contract 1 month prior to the commencement of each vesting quarter.
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| Q5 |
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| Ans |
Quarterly vesting information is available on the SP Services
website (www.mssl.com.sg)
from 1st January 2004 onwards.
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| Q6 |
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| Ans |
Non-contestable consumer will be fully covered by vesting
contracts and will be protected from pool price volatility.
Contestable consumer's energy consumption is vested based on the remaining
portion after deducting the non-contestable consumers from the level of
contract cover. The balance amount of contract level for contestable consumer
is referred to as VHP. VHP covers only a portion of contestable consumer's
energy consumption.
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| Q7 |
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| Ans |
PRP is the vesting hedge price of electricity paid by
consumers. The components of PRP are the hedge price (HP) and an adjustment of
over/under-recovery amount for the previous vesting quarters (Previous Net
Shortfall, PNS). This shortfall or surplus between the amount paid by vesting
contract consumers and the amount paid to vesting contract generating companies
arises because generating companies' contract quantities are determined based
on forecasted consumption, whereas loads are settled on actual consumption.
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| Q8 |
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| Ans |
An independent auditor was engaged to perform an audit on the
VCC application. The audit report certifies that the VCC application is built
according to the EMA methodology. |
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| Q9 |
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| Ans |
VCRP is the reference price used by the EMC to perform the
MSSL's financial settlement of vesting contracts with generation companies.
This vesting contract reference price is similarly used by the MSSL to settle
vesting contract credits/debits with contestable consumers. .
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| Q10 |
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| Ans |
These vesting contract credits/debits are to adjust energy payment at vesting
contract reference price (VCRP) for the vested portion to the vesting contract
price for consumers (PRP). The vesting contract credits/debits are equivalent
to the difference between VCRP (Vesting Contract Reference Price) and PRP
(Payment Reference Price), multiplied by the contestable consumers' energy
withdrawal up to the maximum hedge quantity (VHP).
Formulae to calculate vesting contract credits/debits is as follows:
Vesting credits/debits ($) =Σ (VCRP hh - PRP hh ) * TLF * Energy
withdrawal hh * VHP hh
For contestable consumers buying electricity from retailers, they may or may
not see vesting contract credits/debits appear on their electricity bills,
depending on their contractual terms with their retailer. Retailers are not
compelled to sell any portion of electricity to the contestable consumers at
the vesting price or pass on vesting debits/credits to the contestable
consumers. How they price the electricity they retail is driven by their own
commercial decision.
For the contestable consumers buying electricity directly from the wholesale
market or indirectly from the wholesale market through the MSSL, the MSSL will
pass through to them the vesting contract credits/debits. This will bring the
price that these contestable consumers pay for the vested portion of
electricity to PRP.
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| Q11 |
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| Ans |
Non-contestable consumers will continue to buy their electricity from SP
Services based on regulated tariffs approved by the EMA. The tariffs will be
based on the vesting price to consumers (Payment Reference Price, PRP). Vesting
contracts protect non-contestable consumers from fluctuations in pool prices.
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