Renewable Energy Guide/Energy Invoicing
The seller of electricity has to produce a PPA invoice, energy invoice or energy bill as specified in the PPA terms. Typically sellers create an energy invoice using spreadsheets, because their accounting systems are not suitable to handle the task. To create an energy invoice, the seller needs to have access to the electricity meter data. Ideally they will have access to an automatic meter reading (AMR), which is the technology of automatically collecting consumption, diagnostic, and status data from energy metering devices and transferring that data to a central database for billing, troubleshooting, and analyzing.
Elements of a PPA invoice
Depending on the country and their regulations, you will see big variations in the requirements for producing energy invoices. For example in Montenegro your are not allowed to use any foreign words in your invoice. In some countries like France, the energy seller has to use a fixed template to create invoices. In bi-lateral PPAs the format is usually more flexible. The invoice should include the following information:
The invoice will often be under the letterhead of the SPV who is the contracting party to the PPA. In many cases the buyer may not recognize the name of the SPV and it is advisable to add the name of the operator (for example Duke Energy invoicing on behalf of Solar 123, Ltd). The minimum information to include on the invoice are the SPV address, a contact person and phone number and the EIN or company registration number. In many jurisdictions a sales tax or corporate tax number are also to be included.
The invoice will need to state the invoice date and the payment date or due date. It needs to list an invoice number for easy reference, ideally to be included on the payment instruction. For the remittance, it is important to state how the invoice needs to be paid (by check, wire, etc) and to include the address of the operator or lockbox for the check and the bank account details of the SPV for the wire.
In some jurisdictions, energy sales are exempt from sales tax or value added tax and in others it is not. This should be clearly stated on the invoice and the calculation of the sales tax should be properly displayed on the invoice.
Energy generation and rates
The invoice should list the period for the energy sales, the amount of electricity sold (in MhW or kWh) and in some jurisdictions the invoice will need to include the meter number (for example MPAN in the UK), the meter start reading and the meter end reading. Some invoices will include multiple meters and it is important to keep those meter readings in separate line items. The invoice will need to include the tariff, rate or price per MhW or kWh for each line item. In the case of a time of use rate, you may need to include the total electricity sold under each rate, like for example in Belgium. Sometimes the invoice can get even more complicated. It may include capacity payments, curtailment credits, allocation factors etc. Especially when storage is added to your project, the invoicing can start to get pretty complex.
Shadow settlements is the estimation of a statement that PPA sellers expect to receive from a third party such as a utility. In many cases, the PPA seller does not have access to the utility meter and the utility calculates the invoices amount using rate schedules like ToU (time of use). The purpose of creating a shadow bill or shadow settlement is to validate the statement from the utility when it arrives and to be able to accrue for revenues prior to the receipt of a statement.
Plant Accounting and Settlement System (PASS)
A Plant Accounting and Settlement System or PPA Settlement System is often referred to as a PASS. A PASS will use the terms of the PPA contract, the plant data, meter and market data to automatically calculate invoices for the sale of electricity.
A PASS can handle complicated formulas with different meters, different energy, different meter types, index or swap prices, ceilings, caps and floors and other variables. A PASS will automatically generate invoices based on contract parameters, meter values, market rates, taxes and other variables. It will allow users to review invoices and override values where required. It will allow users to approve invoices using “segregation of duties”, so that the person who reviews cannot be the person who authorizes the invoice.
A PASS is typically built to handle a large volume of data. Interval times are getting shorter and shorter and a PASS should be able to handle flexible interval periods on the same invoice. The PASS preserves the benefits of spreadsheets via data adjustments and invoice amount overrides, but processes all of the data in a system that is replicable, versioned, auditable, and traceable.
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