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Utility Seeking To Charge Retail Supplier For Erroneously Reported Wholesale Market Data, Refund To Other Market Participant

March 21, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Direct Energy Business filed a complaint at the Public Utilities Commission of Ohio against Ohio Edison and Cleveland Electric Illuminating, alleging that the two FirstEnergy Ohio utilities are seeking to charge retail suppliers to resettle and refund a prior erroneous $5 million charge to another entity.

As alleged by Direct Energy Business, "The Respondents made a substantial error that caused wholesale market data to be reported incorrectly to PJM Interconnection LLC. The error caused an unknown entity, whom Respondents refuse to identify, to incur over $5 million in wholesale market charges. Respondents claim to have recently reimbursed the unnamed entity for these charges, and are now turning to Complainant to reimburse Respondents."

"In short, Respondents are attempting to improperly leverage their supplier tariff to force Direct to resettle a wholesale market transaction. Respondents have no authority to compel resettlement, nor Direct any obligation to agree to resettlement," Direct Energy Business said

Direct Energy Business alleged that, on December 18, a utility representative advised several Direct employees by email that the load for three customers was not accounted for in Direct’s load obligation submitted to PJM during various periods between December 1, 2013, and September 30, 2015. Due to the errors occurring beyond PJM’s 60-day window, any requested remediation would be through the use of out-of-market bilateral settlements through PJM, according to the email.

Such email described an internal investigation that determined a flag had accidentally been activated on an account that caused no record to be created for the settlement system’s daily extract file that contains any supplier changes or other updates. Apparently, because the settlement system received no supplier change record, it continued to report the customers’ load obligation to the previous supplier.

"As a result of Respondents’ self-described 'errors,' revenues from the affected customers identified in the email were credited to Direct, but the cost of energy and capacity was charged to the customers’ previous supplier," Direct Energy Business alleged

"On December 31, 2015, [the utility rep] sent another email on behalf of the previous supplier of three customers at issue that incurred the wholesale market costs. [The utility rep] requested in her email that Direct provide confirmation that Direct would compensate the prior supplier for the alleged erroneously incurred costs. Without providing any substantiated details regarding the prior supplier’s identity or supporting documents regarding the alleged payments, Respondents requested Direct to agree to compensate the unknown entity more than $5 million," Direct Energy Business alleged

"On February 13, 2017, during a telephone call with [a second utility rep] Direct explained that it was willing to address the issue of resettlement directly with the affected supplier. Although Direct was willing to discuss the issue, Respondents refused to identify the supplier," Direct Energy Business alleged

"Also during the February 13 call, [the second utility rep], on behalf of Respondents and/or the unidentified supplier, threatened that if Direct did not agree to resettlement, Respondents would declare Direct in breach of the Agreements and Supplier Tariff for failure to cooperate," Direct Energy Business alleged

"In their ongoing effort to attempt to force Direct to resettle in a manner not allowed for in the PJM OATT, Respondents have threatened, and continue to threaten, to draw against the financial security provided by Direct," Direct Energy Business alleged

Direct Energy Business alleged that the utilities did not identify any provision of the supplier tariff that would require Direct Energy to agree to resettlement

Further, Direct Energy Business said that Section XII.C. of the supplier tariff states, "The Company will assume no responsibility for billing between a Certified Supplier and the Transmission Provider or any party other than the Company."

"Respondents violated this provision by demanding that Direct compensate an unidentified third-party supplier for alleged financial losses caused by Respondents’ coordination errors," Direct Energy Business alleged

Direct Energy Business sought a PUCO finding that Respondents have no authority to force Direct to resettle with respect to any amounts allegedly paid by Respondents to the prior unidentified supplier, and a PUCO order enjoining the Respondents from their threatened actions

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