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ESCOs Concerned Spike In ConEd UFE Values Reflect Incorrect Data

November 26, 2018

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Copyright 2010-17
Reporting by Paul Ring •

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Updated 11/27: Due to an impending deadline, the ESCOs also requested a meeting with ConEd by conference call Wednesday afternoon, November 28, 2018, to discuss the June 2018 UFE, with the hope that the June 2018 UFE discrepancy may be resolved ahead of the December 3 deadline.

Outside counsel to Atlantic Energy, LLC, Approved Energy II LLC and BBPC, LLC d/b/a Great Eastern Energy, and also on behalf of East Coast Power & Gas, LLC and Direct Energy, LLC (collectively, "Inquiring ESCOs"), has requested that Consolidated Edison convene a stakeholder meeting to address concerns from the Inquiring ESCOs that Consolidated Edison's ("ConEd") Unaccounted for Electricity ("UFE") value reported to the New York Independent System Operator ("NYISO") for Zone J (i.e., New York City) for the months of April 2018, May 2018 and June 2018 ("Spring 2018 UFE Issue") is incorrect

"In sum, the Inquiring ESCOs are concerned that the Zone J UFE value reported to NYISO for April (14.10%), May (15.4%) and June (16.70%), 2018 is incorrect, and request a stakeholder meeting in early December 2018 to resolve this time-sensitive issue," the Inquiring ESCOs said in their request to ConEd

"Due to the impending deadlines described below, Inquiring ESCOs request that ConEd hold a stakeholder meeting in early December to address the Spring 2018 UFE Issue and Inquiring ESCOs’ concerns. Several ESCOs have independently raised this issue to ConEd, NYISO and Department of Public Service Staff ('NYDPS Staff'); however, the issue has not been resolved. The period to challenge LSE metering ends approximately 145 days after the initial date of the invoice ... As NYISO is dependent on the UFE values provided to it by ConEd, and only able to reconcile charges to ESCOs within a six-month true-up period, time is of the essence. Reconciliations are anticipated to reduce the UFE values significantly," the Inquiring ESCOs said in their request to ConEd

The Inquiring ESCOs said the NYISO deadlines for challenges to the data is as follows:

Month             Deadline
April 2018        October   1
May   2018        October  31
June  2018        December  3

The Inquiring ESCOs said in their request to ConEd that, "As shown on the table below, the Zone J UFE value for April, May and June is significantly higher than the Zone J UFE value for the months leading up to April 2018, in addition to being two to three times the Zone J UFE value for the same timeframe in 2017."

     2018                  2017   
Month   Zone J UFE    Month   Zone J UFE
Jan-18    6.80%
Feb-18    7.30%
Mar-18    6.60%
Apr-18   14.10%        Apr-17    4.70%
May-18   15.40%        May-17    5.50%
Jun-18   16.70%        Jun-17    7.20%
                       Jul-17    7.70%
                       Aug-17    6.80%
                       Sep-17    6.20%
                       Oct-17    5.50%
                       Nov-17    6.60%
                       Dec-17    7.90%

The Inquiring ESCOs said in their request to ConEd that, "ESCOs that challenged the accuracy of the Zone J UFE values were advised by NYISO that NYISO cannot make any adjustments unless and until ConEd provides NYISO with a revised UFE Zone J value for each month in question. In order to reconcile charges to ESCOs internally at the NYISO, corrections to the UFE must be submitted prior to the expiration of the six-month true-up period. After the six-month timeframe expires, ESCOs may be required to bring an action to the Federal Energy Regulatory Commission ('FERC') in order to allow NYISO to address corrections."

The Inquiring ESCOs said in their request to ConEd that, "ESCOs are confused as to the current status of how and when UFE factors may be revised. The May 2018 Zone J UFE of 15.4% was communicated to ESCOs in the October 17, 2018 ConEd ESCO Newsletter. In the days that followed, certain ESCO representatives reached out to ConEd’s Forecasting Services Department ('Forecasting Dept') questioning the surge of the May 2018 price. In response, ConEd’s Forecasting Dept advised that there had been errors underlying that calculation and provided a revised May 2018 report which stated the May 2018 UFE for Zone J is 4.9%. To the best of our knowledge, ConEd has neither published the revised May 2018 report, communicated the revisions to the broader ESCO community, nor updated NYISO with the May 2018 Zone J UFE value. To our surprise, ConEd issued a newsletter on October 29, 2018 addressing the UFE discrepancies and confirming that the previously provided UFEs were correct. ConEd further stated that, '[i]f there is a significant difference between the 4 and 6 months UFE values, we will republish the 6-month UFE values to the RAIS portal.'"

The Inquiring ESCOs said in their request to ConEd that, "At this time, we have raised our concerns to NYDPS Staff, who we understand is looking further into the issue. In addition, we request a stakeholder meeting in early December to discuss the following issues:

"• What caused the significant jump in the 2018 April, May and June Zone J UFE values?

"• What safeguards have been implemented to prevent a repeat of the issue?

"• What is the status of the unpublished May 2018 UFE report that stated the May 2018 Zone J UFE value is 4.9%? Why is there such a significant discrepancy between the published and unpublished reports?

"• In the October 29 Newsletter, ConEd stated that it would republish the 6-month UFE values if 'there is a significant difference between the 4 and 6 months UFE values.' We respectfully disagree with this statement, and submit ConEd is obligated to republish the UFE values (and timely report them to NYISO) to the extent there is any correction to the 4-month UFE value.

"• Please explain how any adjustments to the 4-mo and 6-mo UFE values would be applied to historical data and how any dollars owed will be returned to ESCOs.

"• Were ConEd sales customers’ commodity rates equally impacted by the incorrect UFE factors?

"• Are these calculations audited or verified by an outside party?"

The Inquiring ESCOs said in their request to ConEd that, "We appreciate your cooperation in this matter and are hopeful resolution on this issue can be reached so that corrections can be made before forthcoming NYISO deadlines without involving the FERC or the New York Public Service Commission."

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