What is the ORDC Settlement Charge on my bill?
Some customers will see a new line item charge on their bill, called "ORDC Settlement Charge". Effective for billing periods on and after June 1, 2014, ERCOT has been authorized to charge retail users for this new settlement charge. This line item represents an actual price change for Ancillary Service Imbalance and the increase will be passed through without mark up.
What is it?
The Real-Time Reserve Price Adder based on the Operational Reserve Demand Curve (ORDC), is a pricing incentive added to the cost of power in order to encourage electricity generators to keep extra supply on call. This is intended to ensure that a certain amount of electricity is always in reserve to support grid reliability during periods of high demand.
What does it mean for customers?
For Champion Energy customers who signed up or renewed their contracts after January 10, 2014, the ORDC has already been factored into the fixed price you pay per kWh. If you are on a Champion Energy contract created prior to January 10, 2014, then you may see a new line item called "ORDC Settlement Charge" on your electricity bills starting in billing periods after June 1, 2014 and continuing through the end of your contract.
Where did it come from?
Under the authority of the Public Utility Commission of Texas, the Energy Reliability Council of Texas (ERCOT) approved Nodal Protocol Revision Request (NPRR) 568, Operating Reserve Demand Curve (ORDC) in Real-Time Market (RTM), in December 2013. This constitutes a change in law that will go into effect for billing periods after June 1, 2014.
According to ERCOT:
"The Real-Time Reserve Price Adder Based on ORDC captures the value of the opportunity costs of On-Line reserves based on the defined Operating Reserve Demand Curve (ORDC). This will be an adder to the Real-Time LMP based on NPRR568 Real-Time Reserve Price Adder Based on Operating Reserve Demand Curve. ORDC is a curve that represents the value of reserves at different reserve levels based on the probability of reserves falling below the minimum contingency level and the Value of Lost Load (VOLL)"