Designing Your Contract Option Types

Contract options are used for service agreements, which may be subject to special overrides or alterations in their rate for certain temporary periods. Contract options are used to define the possible special situations and to record the actual override events. Your contract option type is a high level categorization of the possible special situation applicable to a customer or group of customers.

To design your contract option types, you will need to review each rate for your interval customers and determine whether or not there are special options. Some examples of special options are:

• Interruptions. Perhaps you warn your customers of interruption periods and any usage incurred during that period will be subject to special prices.
• Curtailment. Perhaps you define periods where you ask a customer to shed their load below a certain subscribed demand and any demand, which exceeds this subscribed demand during that period, will be subject to a special charge.

Next, must determine whether or not a given option behaves differently under different circumstances. For example, perhaps you have different types of interruptions. If these different types of interruptions are applicable to the same customer, then you will require a single contract option type and multiple contract option event types for that option type. If these different types of interruptions are not applicable to the same customer, then you would probably want to define separate contract option type values.

You need to also consider whether or not contract option events for this type of contract option may overlap in their effective periods. If you do allow overlap, then you must be sure that any algorithm, which may process the contract option events, must know how to process the overlaps.

Your next step is to determine whether or not characteristic values will be needed for each contract option of this type. The characteristic values are available for use by the algorithms, when processing the contract options. For example, perhaps subscribed demand is defined at the contract option level. On the contract option type, you must define the possible characteristic types for contract options of this type. You may also define a default value, if applicable.

Finally, you will need to determine whether or not you wish to create validation algorithms to validate your contract option event data. Algorithms may be created to be executed upon add or change of the data, where the status is Pending, Frozen or Canceled.

For our purposes, let us assume that we have only two contract option types: Interruption and Curtailment. Neither one allows overlap. The Curtailment option type will define subscribed demand as a required characteristic and will define a validation algorithm to ensure that the value of the demand falls within an appropriate range. This algorithm program will be executed for pending and frozen events.

We will assume that both contract option types will follow the same seasonal time shift as our base time zone. Refer to Time Zone and Time Changes and Designing Your Time Options for more information.