Revolutionizing Settlements: How an Integrated Physical Trading and Scheduling Solution Can Change Everything

Trading and scheduling is a fast-paced and ever-changing business. Traders enter into deals with counterparties all day long, each with its own set of complicated details. With each new deal, schedulers must obtain at least the basic information about transactions from the counterparty’s scheduler and determine the best way to physically fulfill the obligation. The scheduler confirms the agreed upon physical path with the counterparty, finalizes the representation of that physical flow within the company’s software solution, and creates an electronic tag (e-Tag) to represent the predetermined schedule to all reliability, transmission, and marketing parties involved.

Even with these preparations, when the day comes for that physical flow to take place, anything can happen. The majority of the time the physical schedule runs as planned, but sometimes the e-Tag is curtailed or adjusted in real-time to compensate for limiting factors within the power grid, such as a constraint on a power line. When this happens, it seldom impacts just one e-Tag. More often than not, these constraints impact many e-Tags — all of which have to be adjusted to maintain the integrity of the system.

In those cases, the reliability coordinator will make real-time adjustments to the e-Tag, impacting the delivered and/or received quantity. Those adjustments will impact how the deals are settled after the fact. A record must be kept at the company showing the actual quantity delivered/received for each deal, associated with each schedule, and connected with each e-Tag. This is a very difficult process to keep up with manually. Without the correct record tying e-Tags to schedules and deals, the settlement team cannot know whether they are collecting or paying the proper amount of money for each transaction. Settlement for these transactions doesn’t occur until a month later. At that time, it is easy to forget the details of what happened to a particular deal or schedule. 

Fortunately, trade deals don’t need to rely on manual record-keeping that’s time-consuming and prone to error. There’s an automated way to record e-Tag adjustments and to ensure accurate scheduling every time. With webTrader Power, OATI’s integrated physical trading and scheduling solution, any modification to an e-Tag will automatically update the company’s internal schedule and all associated transactions, as appropriate. When it comes time for settlement, there is a clear record of the original deal and schedule, along with the resulting financial obligation. The webTrader Power application empowers users, saves time, and increases trading efficiency via comprehensive front-to-back office support. Visit the OATI webTrader Power webpage to read more about webTrader Power’s comprehensive set of capabilities.

About the Author:
Ms. Kim Fogt is an energy professional with a background in power and gas trading operations. She has over a decade of experience in day ahead and real time operations, NERC training, and business development. Ms. Fogt is currently an Account Executive with Open Access Technology International, Inc. (OATI) supporting energy trading organizations, investor-owned utilities, and co-ops in the Southeastern United States.