Understanding Vesting Contract Calculations


In this introduction, you will find information on the vesting contract credits and debits formula, the variables in the formula and how the various variables in the formula are calculated or obtained. The purpose is to provide you with an understanding of the formula, its variables and the derivation of the variables, and how you can check the vesting contract credit/debit shown in your bill.

Vesting contract credit and/or debit are calculated using the following formula:
Vesting contract credit/debit = ∑(Vesting Rate x Vested Quantity) where:
Vesting Rate = VCRPhh - PRPhh
Vested Quantity = Adjusted Energyhh x VHPhh

Getting the necessary data for the calculation

The following explains where the necessary data required in the formula can be obtained or calculated.

1. VCRPhh

VCRPhh is the Vesting Contract Reference Price; this is the electricity price used in the vesting settlement and is calculated by the Energy Market Company (EMC). Half-hourly VCRPhh measured in $/MWh can be obtained from EMC's website www.emcsg.com.

2. PRPhh

PRPhh is the Payment Reference Price; this is the price consumers pay for their vested quantity of their electricity consumption. PRPhh ($/MWh) can be obtained from the Open Electricity Market website. PRPhh is updated every quarterly and is constant for each half-hour period in that quarter.

3. Adjusted Energyhh

Adjusted Energyhh is the half-hourly electricity consumption adjusted with the transmission loss factor and can be requested from SP Group by you or your retailer on your behalf by:

  1. Contacting our Market Support Services Operation Department via email at choice@spgroup.com.sg or
  2. Calling our hotline at 1800 233 8000.

Please note that the Adjusted Energyhh does not include any metering data adjustments if there are any. When you or your retailer sends a request to SP Group for your half-hourly consumption data, SP Group shall forward to you the vesting contract credit/debit calculated for the metering data adjustments of the past month together with the half-hourly consumption data.

4. VHPhh

VHPhh is the Vesting Hedge Proportion; this is the percentage of contestable consumers' electricity consumption that is covered by vesting contracts and for which consumers pay the PRPhh. VHPhh varies every half-hourly and is expressed in the form of percentage (%).

There are nine (9) VHPhh, each corresponding to one segment of the three periods of Peak, Off-peak and Shoulder for Sundays and public holidays, Saturdays and weekdays. The VHPhh can be obtained from the Open Electricity Market website. The VHPhh is updated quarterly.

Below is an example of the VHPhh Table:

VHP (%) Peak Off-Peak Shoulder
Sunday and Public Holiday 0 24.67 37.31
Weekday 46.27 25.87 36.65
Saturday 46.62 26.14 37.10

Each half-hour has its particular VHPhh. In order to apply the correct VHPhh percentage for a particular half-hour, you need to refer to the Day Profile Table which can be obtained from the Open Electricity Market website (please see illustration below). The Day Profile Table shows the applicable VHPhh for each half-hour with the first half-hour (period 1) starting at 00.01 am and ending at 00.30am, period 2 from 00.31 to 01.00 am etc.

5. Sample Day Profile Table

Day Profile 1 2 3 4 5 6
Sun/PH Off-peak Off-peak Off-peak Off-peak Off-peak Off-peak
Weekday Shoulder Off-peak Off-peak Off-peak Off-peak Off-peak
Sat Shoulder Shoulder Off-peak Off-peak Off-peak Off-peak
Day Profile 7 8 9 10 11 12
Sun/PH Off-peak Off-peak Off-peak Off-peak Off-peak Off-peak
Weekday Off-peak Off-peak Off-peak Off-peak Off-peak Off-peak
Sat Off-peak Off-peak Off-peak Off-peak Off-peak Off-peak
Day Profile 13 14 15 16 17 18
Sun/PH Off-peak Off-peak Off-peak Off-peak Off-peak Off-peak
Weekday Off-peak Off-peak Shoulder Shoulder Shoulder Peak
Sat Off-peak Off-peak Off-peak Shoulder Shoulder Shoulder
Day Profile 19 20 21 22 23 24
Sun/PH Off-peak Off-peak Off-peak Off-peak Shoulder Shoulder
Weekday peak peak peak peak peak peak
Sat Shoulder Shoulder Shoulder peak peak peak


To select the correct VHPhh for a half-hour period, identify the correct VHPhh segment from the Day Profile Table. For example for the period 10.01am to 10.30am on 1 January 2004, it corresponds to period 21 for a public holiday in the Day Profile Table. The corresponding VHPhh segment for this period is "Off-Peak Sunday / Public Holiday" and the VHPhh from the VHPhh Table for "Off-Peak Sunday / Public Holiday" is 24.67%.

6. Vested Quantity

The Vested Quantity is calculated for the half-hour period (10.01am to 10.30am on 1 January 2004) by multiplying the Adjusted Energyhh of that half-hour period (10.01am to 10.30am on 1 January 2004) by VHPhh.
The formula is given below:

Vested Quantity = Adjusted Energyhh x VHPhh

7. Vesting Rate

The Vesting Rate is calculated for the half-hour period (10.01am to 10.30am on 1 January 2004) by the following formula:

Vesting Rate = VCRPhh - PRPhh

8. Calculating the Vesting Contract Credit/Debit

The vesting contract credit/debit for each half-hour period is calculated using the formula:

Vesting contract credit/debit for one half-hour period = Vesting Rate x Vested Quantity

The vesting contract credit/debit for one month (for example for January 2004) will be the sum of all the vesting contract credit/debit for all the half-hour periods for the month.

Vesting contract credit/debit for January 2004 = ∑(Vesting Rate x Vested Quantity)

Please note that both VCRPhh and PRPhh are presented as dollars per MWh ($/MWh) and so the vesting rate is also in $/MWh. Your consumption data (and hence the vested quantity) is likely to be in kWh; to convert the vesting rate to $ per kWh divide the vesting rate by 1000 before calculating the vesting contract credit/debit.

9. Checking the Vested Quantity on the Bill

The Vested Quantity that appears on the bill is the total vested quantity (in kWh) for the entire billing period. To calculate the Vested Quantity, apply the formula in Paragraph 6 for each half-hour period in the entire billing period. The total will be the Vested Quantity for the entire billing period that is reflected in the bill.
Please note: if there are adjustments to the metering data, the Vested Quantity for the adjustments will be shown as an additional line item in the bill. Please see illustration below:


The Vested Quantity calculated by the formula will not include the adjustments to the metering data. You can obtain the Vesting Quantity for the adjustments to the metering data from SP Group, please see Paragraph 3 above.

10. Checking the Vesting Rate on the Bill

The Vesting Rate that appears on the bill is the weighted average vesting rate (in $/kWh) for the entire billing period. It is calculated as follows:

  • Divide each of the half-hourly vesting contract credits/debits calculated by the formula in Paragraph 8 by the total Vested Quantity for the entire billing period
  • Add up the results of the calculation. The total gives the weighted average vesting rate which is reflected in the bill. Please note that this is not the rate used in the calculation of Vesting Contract Credit/Debit; it is displayed on the bill for reference only.

11. Checking the Vesting Contract Credit/Debit on the Bill

The Vesting Contract Credit/Debit that appears on the bill is the total vesting contract credit/debit (in $) for the entire billing period and is calculated as described in Paragraph 8 above. Please note that if there are adjustments to the metering data, the Vested Credit/Debit for the adjustments will be shown as an additional line item in the bill. Please see illustration in Paragraph 10 above.

12. Interpretation of the Vesting Contract Credit/Debit on the Bill

The Vesting Contract Credit/Debit may be positive or negative as a result of the calculation. A negative amount means it is a vesting contract debit and the consumer has to pay more for the vested portion. A vesting contract debit will therefore appear as a positive item in the bill with a positive vesting rate. Conversely, a negative vesting rate will result in a vesting contract credit and will appear negative in the bill, meaning there is a deduction from the amount the consumer has to pay.

An example of Vesting Contract Credit/Debit

The allocation of vesting contract credit/debit is calculated by the following formula:

∑(VCRPhh- PRPhh) x (Energyhh x TLF x VHPhh)

Example
For a given half-hour period;
Energy = 5,000 kWh
TLF = 1.10
VHP = 0.50
VCRP = S$ 0.10 (per kWh)
PRP = S$ 0.08 (per kWh)

(VCRPhh- PRPhh) x (Energyhh x TLF x VHPhh) = (0.10-0.08) x (5000 x 1.10 x 0.50) = S$55

This is a vesting contract credit; the customer receives a refund of S$55 against his/her electricity payment for this half-hour period.

Note: This appears as a negative value on the bill - it is a credit to customer.

References

  • Nomenclature
    VCRPhh = Vesting Contract Reference Price
    *PRPhh = Payment Reference Price
    Energyhh * TLF * VHPhh = Vested Quantity
    Energyhh = Energy consumed
    TLF = Transmission Loss Factor
    *VHPhh = Vesting Hedge Proportion; proportion of contestable consumption covered by vesting contract
    *HPhh= Hedge Price to generators
    *HQhh = Hedge Quantity allocated to the generator

    Note:
    *output components from VCC application
    hh refers to a given half hour period


Additional Readings

  • EMA's Procedures for Calculating the Components of Vesting Contracts
  • Regulated Supply Services Code
  • Market Support Services Code
  • www.ema.gov.sg