Shell Energy Asks FERC to Open Review of CAISO Settlement Process Integrity

Shell Energy North America (US), L.P. has filed a complaint at FERC asking the Commission to, among other things, institute an investigation into the integrity of the settlement process administered by the California ISO.

"The CAISO'S failure to define 'complete and accurate' [meter data] has led to a breakdown in the integrity of the grid-wide settlement process," Shell said.

"Because there is no clear definition of 'complete and accurate' meter data in the CAISO Tariff, Market Participants are free to define the meter data reporting obligation in their own way," Shell said.

"Inconsistent meter data reporting leads to increased uninstructed imbalance energy, the cost of which is shifted between and among Scheduling Coordinators and their customers," Shell said.

"The absence of a definition allows some Scheduling Coordinators to report meter data in an imprecise manner, to the disadvantage of those Scheduling Coordinators that provide accurate data," Shell said.

Shell also requested that:

• FERC direct the CAISO to amend its Tariff to require all Market Participants, including investor-owned utilities (IOUs) and third parties that have responsibility for the meter data management agent [MDMA] function, to adhere to the deadlines in the Tariff for providing "complete and accurate" Settlement Quality Meter Data [SQMD]. "In this connection, the CAISO should be directed to define 'complete and accurate' meter data so that all Market Participants are subject to the same requirements," Shell said.

• The CAISO Tariff should be revised further to provide that if a Scheduling Coordinator's failure to provide complete and accurate SQMD within the established time limit is based on the failure of another CAISO Market Participant (including an IOU that has responsibility for the MDMA function) to provide complete and accurate meter data on a timely basis, any penalty should be imposed on the Market Participant that is responsible for failure to provide timely, complete and accurate meter data.

• FERC direct the CAISO to align the obligation of a Market Participant to provide "complete and accurate" meter data under Tariff Section 37.5.2.1 with corresponding rules for meter data accuracy adopted by the California PUC. The CPUC requires that 99 percent of all usage data must be available within five days of the scheduled meter reading date. "MDMAs must be responsible for the other one percent, as well," Shell said.

"Moreover, an IOU is permitted by the CPUC to adjust a bill to a customer within three years, based upon the correction of a meter data error. See SCE Rule 17(C). The customer has no recourse, however, for charges that they receive from the market as a result of late or incorrect data submissions by an MDMA. A Scheduling Coordinator should not be penalized under the CAISO Tariff if an IOU provides complete and accurate meter data (or corrects inaccurate meter data) after the applicable deadline," Shell said.

These issues have been previously raised at FERC, but not addressed, in Docket Nos. ER11-2819 and ER11-2574.

Shell's complaint was prompted by a $1,000 penalty imposed on it by CAISO relating to meter data provided by Shell for Trading Day September 3, 2011.

For that Trading Day, Shell Energy said that it provided meter data in the amount of 2,397 MWh for one customer (comprised of fifteen meters) on a timely basis. The meter data provided by Shell Energy was based on actual meter data that was provided by SCE, the MDMA, for fourteen out of fifteen meters. Because SCE did not collect or provide meter data for one of the fifteen meters within the time required under the CAISO tariff, Shell Energy had to submit a good faith estimate of the missing meter data.

Shell Energy said that SCE only provided "complete and accurate" meter data for that meter after the deadline set forth in Tariff Section 37.5.2.1.2

Shell Energy transmitted the corrected meter data (including SCE's meter data for the fifteenth meter) on November 14, 2011 to meet the then-existing T+61 B submission deadline. The corrected meter data for Shell Energy's customer was 2,253 MWh, a variance of (144) MWh (6%) compared to the meter data provided by Shell Energy within the T+43C time limit.

"Shell Energy seeks dismissal of the penalty because a penalty, if any, should be imposed on the Market Participant that had responsibility for collecting and reporting the customer's meter data, and thus had the ability to obtain access to accurate meter data on a timely basis."

Shell noted that CAISO Tariff Section 37.5.2.1 states that a Scheduling Coordinator may provide estimated SQMD that is complete and based on a good faith estimate that reasonably represents demand and/or generation quantities for each Settlement Period.