Hourly Electric Commodity Prices

UPDATE: Calculation of these prices discontinued as of 1/1/2003.

Development of Hourly Prices for Procured Energy

The hourly price for procured energy (PE) will be derived based on forward market costs and settlement costs, adjusted by an allowance for uncollectibles, Distribution Loss Factors (DLFs), and the Procurement Adder. PG&E shall use the best information available for calculating the PE price.

   PE day n, hr = (FM day n, hr + ADJ day n, hr + PSA day n, hr) * U * DLF + Proc Adder

  1. Hourly Forward Market Prices (FM):

    Hourly forward market prices will be calculated as the estimated weighted average cost of power to PG&E plus an estimate of the hourly ISO Grid Management Charges (GMC). The estimated weighted average cost of power includes costs for the California Department of Water Resources (DWR), Utility Retained Generation (URG) and other power purchases.

    FM day n, hr = avg cost of power day n, hr + estimated GMC day n, hr

  2. Real-Time Settlement Costs True-Up (ADJ):

    A real-time settlement cost true-up, representing the real-time costs not yet reflected in charges to customers for the trading day approximately 90 days earlier, is added to the cost derived in Part 1. This rate is determined by dividing the real-time cost amount (which is dollar amount, either positive or negative, incremental to the cost described in Part 1) by PG&E's estimate of the load to be served.

    ADJ day n, hr = (T$ - FM * FL) day n-90, hr / Est FL day n

    Where    T$ = total final settlement charges ($)
                  FL = final settlement load (MWh)

  3. Post Real-Time Settlement Costs Adjustment (PSA):

    PE charges available after the real-time settlement cost adjustment has been implemented for a specific hour will be accrued once a month and applied to adjust PE prices in the next full calendar month. Once the total accrued amounts are summed, the total will be divided by the number of days in the next full calendar month to develop a daily amount. The daily amount will be divided by the sum of PG&E's estimate of the 24 hourly loads for the day to determine an adjustment ($/MW) for the day.

    PSA day n = (PSA$ accrued / # days in month) / daily load day n

  4. Adjustments for Distribution Loss Factors (DLFs), Uncollectibles (U) and the Procurement Adder (Proc Adder):

    The average hourly price at the transmission/distribution interface, as determined by the sum of the average prices resulting from Parts 1, 2 and 3, is multiplied by the DLF and an uncollectible factor to determine the appropriate price to be paid by end-use customers served at each voltage level. Finally a Procurement Adder equal to $0.07/MWh is added to the hourly price.

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