Retail Supplier Asks State Regulator To Address UFE Settlement Issues Created By EDC's "Data Anomalies"
EDC Planning To Use PJM Settlement C Process, Retail Supplier Raises Concerns About Stranded Credits Due To Disputes
February 16, 2023 Email This Story Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • email@example.com
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Energo Power & Gas LLC ('Energo') petitioned the New Jersey Board of Public Utilities ('Board' or 'BPU') to convene
an expedited proceeding to address a Jersey Central Power & Light ('JCP&L') unaccounted for
energy ('UFE') settlement issue.
Energo alleged, "Based on its review of prior monthly settlement figures, Energo
believes that JCP&L submitted incorrect energy volumes to PJM, resulting from incorrect UFE
adjustments, for certain prior months outside the PJM 60-day period that were approximately 25%
higher than appropriate. This has resulted in Energo incurring hundreds of thousands of dollars of
Energo alleged, "Energo notes this inaccurate UFE settlement process affects other third-party
suppliers ('TPSs') and BGS providers in New Jersey."
Energo alleged, "Based on Energo’s historical usage data for JCP&L UFE, Energo is owed a credit. Other
market participants that were undercharged as a result of incorrect application of UFE factors will
likely be asked by JCP&L to make additional payments to true up for the incorrect undercharges."
Energo alleged, "In September 2022 JCP&L’s parent company, FirstEnergy, implemented a new system for
the purpose of managing its settlements processes and submitting the results to PJM. FirstEnergy
recently discovered data anomalies related to deploying the new system, which are impacting both
Settlement A and B results. As a result, JCP&L’s settlement numbers from late July 2022 through
December 2022 for UFE are, FirstEnergy admits, incorrect."
Energo alleged, "FirstEnergy has informed Energo that it plans on utilizing Settlement C of the PJM
settlement process to re-settle the incorrect UFE numbers."
Energo alleged, on January 31, 2023, the
Manager of Regulated Settlements at FirstEnergy sent the following email: "Good morning. In September 2022, FirstEnergy implemented a new system for the
purposes of managing its settlements processes and submitting the results to
PJM. Specifically, the new system was utilized to perform Settlement A, or
'Primary' settlements, for power flow beginning with September 2022 and forward.
Regarding Settlement B, or 'Secondary' settlements, the system began processing
July 2022 power flow and forward. Data anomalies related to deploying a new
system have been discovered, impacting both Settlement A and B results. The
anomalies identified vary between zones and have manifested themselves in
different ways. As such, FirstEnergy has made corrections to the system and is
preparing to complete a resettlement of the wholesale market with all suppliers
within all FirstEnergy PJM zones for the previously settled periods of July through
October 2022. Since the new settlement system had updates completed in
December of 2022, the normal Settlement B process will correct any data issues
seen in Settlement A beyond the previously described timeframe. Given the scale
of this project, preparation for and execution of a market resettlement will take time
to work through and complete. Once we complete the preparation process,
additional communication will be provided to all suppliers with more detailed
information (e.g., timing). Please note that with a market resettlement, every
supplier will be asked to provide their consent to proceed with the process – it is
the expectation of all that such consent will be granted to ensure all parties are
resettled appropriately. We encourage your prompt response to those requests when
they are issued at a later date. Thank you."
Energo said, "The PJM Settlement C process provides EDCs with a process to true-up significant
metering or billing errors beyond the 60-day Settlement B timeframe. However, the PJM
Settlement C process requires all affected parties to consent to a resettlement, which Energo fears
is very unlikely to occur, especially given that the problems, according to the FirstEnergy
statement above, appear to span more zones than just JCP&L -- if all parties across all zones are
required to consent, the chance of resettlement quickly diminishes."
Energo said, "The
Board should query whether employing a resettlement process, that has a low likelihood of being
unanimously agreed upon which would then delay issuance of credits JCP&L has been amassing
as result of the UFE overpayments by certain TPSs, is the right path forward. After all, it’s highly
unlikely parties will agree to make true-up payments to FirstEnergy for previous incorrect UFE undercharges resulting from FirstEnergy’s faulty systems and it’s highly likely there will be
disputes as to the proper amounts to credit parties like Energo and parties similarly situated. These
disputes could take years to resolve, if ever, and leave millions of dollars rightly owed to TPSs
stranded with FirstEnergy."
Energo said, "For the reasons stated above, Energo respectfully requests the BPU investigate this very
expensive bill settlement issue and order JCP&L to resolve the issue with TPSs within 45 days,
outside the Settlement C process. Resolution of credits with TPSs would shrink the pool of
participants needed to provide consent for the Settlement C process to proceed and would be an
equitable resolution for TPSs with credits currently stranded with FirstEnergy. Energo requests
that the Board direct JCP&L to provide an explanation for the 'data anomalies' which have caused
the UFE inaccuracies and assurance that the anomalies in their settlement system have been
Energo alleged, "TPSs should not be forced to bear the burden resulting from FirstEnergy’s faulty
settlement systems, nor should ratepayers. UFE credits owed to TPSs should be issued
Energo said, "In the alternative, should the Board support FirstEnergy’s use of the Settlement C process,
the Board should direct JCP&L to provide Energo and other TPSs and BGS providers with its
proposed resettlement numbers prior to those numbers being submitted to PJM as a part of the
Settlement C process, no later than March 1, 2023. This will allow the parties to resolve disputes
over the resettlement calculations prior to JCP&L submitting them to PJM. Finally, the BPU
should also require JCP&L to engage in an expeditious process for obtaining the required consents
by March 15, 2023. Lastly, the Board should direct that Settlement C refunds are issued no later
than March 31, 2023."