Texas wholesale market grapples with missing electricity

Texas market participants are grappling with higher bills for missing energy that has been produced but not recorded as consumed by the grid operator. Generators said similar problems cropped up during the opening days of the California electricity market.


By Ann de Rouffignac
OGJ Online

HOUSTON, Aug. 20 -- Texas market participants are grappling with higher bills for missing energy that has been produced but not recorded as consumed by the grid operator.

Generators said similar problems cropped up during the opening days of the California electricity market. The Electric Reliability Council of Texas distributes the cost of this so-called 'unaccounted for energy' (UFE) among market participants, with the exception of certain wholesalers who have no retail load such as the Lower Colorado River Authority.

The problem came to light after initial settlement statements went out, indicating to some participants a mismatch existed between what generators show as energy sent to the grid and what the forecasted load was.

"We are seeing excessive charges for energy generated but not accounted for in the load," said one large participant who asked not to be identified. "The initial load estimates are not accurate."

UFE is the difference between the amount of energy generated and what is metered as used by end users. The loss could occur because of problems with meters at end users' facilities or at the utilities' substations. Theft of electricity is a possibility, sources said. Theft usually occurs "behind the substation" after the electricity flows out of the substation and to the end user's meter.

One large generator also active in the California market said similar issues arose in that state when the market first opened.

"In the early months of the [California] ISO, as much as 10% of the energy was left over," said a senior official at that company. "The unaccounted for energy was huge. Bills were corrected as much as a year after the opening of the market, the official recalled.

Most of the California problems were attributed to utility and ISO computer start up problems and were eventually corrected. ERCOT officials conceded concerns have developed and were trying to find out what happened.

Sam Jones, chief operating officer for ERCOT, explained metering problems among the wires companies could be contributing to the overcharges. He said some load was double counted and some meters were not properly identified by the wires companies, causing ERCOT's computer software to issue inaccurate load forecasts.

Several market participants asked ERCOT to issue interim statements even though final statements are issued 45 days after the day of the transaction and another accounting is due 6 months later.

"We are going through the statements by hand and checking them until we find the problem," he said. . Jones said ERCOT will consider issuing an interim settlement statement if it's feasible.

"We are paying for that missing load. We don't want to pay now and then wait to be reimbursed," said one executive. However, a spokesman for TXU Corp. said the company hasn't found any unusual UFE charges.

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