Energy Settlement

Introduction

As a local distribution company (LDC) within the PJM control area, BGE is required to comply with PJM procedures. BGE’s role in energy scheduling and settlement is to provide PJM with hourly energy schedules and the settlement of hourly energy usage. On a daily basis, BGE will submit to PJM an initial settlement of each LSE’s hourly energy usage from the previous day (known as the “day-after settlement”) and each LSE’s total capacity peak load obligation and total network transmission peak load obligation in the BGE zone. After all meter reading schedules are completed for a billing month, BGE will have account-specific energy values for the month in question. BGE will submit hourly energy differences for each LSE to PJM through the InSchedule system (known as the “60-day settlement”). Data submitted to PJM will be available to electricity suppliers on the PJM Web site.

The energy market is an hourly market with associated bids and hourly spot market prices. Each load serving entity’s (LSE) hourly energy obligation is not separately metered on the PJM power grid. At the onset of customer choice most retail customers did not have meters capable of registering energy usage on an hourly basis. To enable these customers to participate in electric customer choice, a process known as “load profiling” was created to estimate their hourly energy usage and aggregate the hourly usage to each LSE for the customers served by the LSE. The load profiling methods used by BGE are described under the Load Profiles link on this Web site.

Electricity Supplier Hourly Energy Obligation: “Day-after” Settlement

Hourly energy use by customer account is obtained and aggregated to the electricity supplier level, and these electricity supplier hourly energy obligations (HEO) are reported daily to PJM using PJM’s InSchedule tool. Two procedures are required to derive the electricity supplier HEOs. In the first procedure, hourly loads for each customer account are obtained from BGE’s settlement system database and are adjusted by the appropriate loss factors for the daily settlement period. In the second procedure, these loads are aggregated by electricity supplier to obtain the electricity supplier HEOs, which are then reconciled to BGE’s zonal metered hourly load. These two procedures are described in detail below. (* Note that all procedures are performed for each hour of each settlement period. To simplify notation, subscripts are not shown representing each hour.)

Procedure 1: Obtain Hourly Loads for Each Customer Account

In the first procedure, 24 hourly loads are obtained for each customer account. These hourly loads are adjusted for system losses. There are two methods for deriving the load. Each of the two methods is described below.

Actual Interval Metered Data

For an interval metered account, if interval metered data is available for the settlement day (typically BGE’s largest accounts with high load variability and MV90 metering), the hourly unreconciled load for each hour is the metered usage multiplied by the account’s loss factor, where the loss factor is equal to one plus the loss percentage. The loss percentage assigned to the account depends on the voltage level at which the customer account takes electric service. For more information about loss factors, see BGE Loss Factors.

Unreconciled Load = Metered Hourly Usage x Loss Factor

For BGE’s remaining large interval metered accounts with MV90 metering, hourly data is estimated using the account’s historical hourly usage. If no meter data is available for the settlement day, then the account’s hourly load shall be estimated using the method for non-interval metered accounts described below. New accounts will be assigned average loads in the day-after settlement based on the customer segment to which they belong. In the 60-day settlement, new metered customer account loads will have been read and used for the settlement period.

Non-interval metered Data

For non-interval metered accounts and accounts with AMI metering, the hourly load is the account’s loss-adjusted profiled load multiplied by the account’s usage factor. This operation is broken down into the following series of calculation steps described below.

• Step 1: Determine 24 hourly profiled loads for each profiled segment.
• Step 2: Adjust the profiled load by the relevant loss factor.
• Step 3: Determine each account’s usage factor.
• Step 4: Derive the usage-adjusted profiled load for each account.

Step 1. Determine an hourly profiled load for each account.

A weather-adjusted, average hourly profiled load will be determined for each account on a daily basis in accordance with BGE’s load profiling methodology. This methodology is implemented in the settlement system, which computes profiled loads using the “Hourly Weather Sensitive” technique. See the Load Profiles link for more details. This technique uses a defined season and day-type structure to run a linear regression of historical weather data on hourly load for each customer segment. The profiles created consist of a series of regression equations expressing the relationship between weather and load for the pre-selected season, day-type and hour combinations. The output of this regression model is the load profile: a set of 24 hourly loads based on hourly weather and day-type and season combinations.

Step 2. Adjust the profiled load by the relevant loss factor.

The hourly profiled load for each profiled segment from Step 1 is multiplied by the relevant loss factor for the segment.

Loss-adjusted Profile Load = Profile Load x Loss Factor

Step 3. Determine each customer account’s usage factor.

The usage factor (UF) characterizes how the customer account’s usage for an account relates to the average usage for its profiled segment. It is defined as the ratio of the account’s metered usage to the aggregate average hourly profiled loads for that account’s profiled segment, for a billing period. The billing period used is the most recent meter read processed prior to the settlement day. If a new account has no historic or billed usage, an hourly usage factor of 1.0 will be assigned to that account. Customers in time-of-use rate classes have a separate usage factor calculation for each time-of-use period in the billing period.

Usage Factor = Metered Usage x Profiled Usage

Step 4. Derive the usage-adjusted profiled load for each customer account.

The usage-adjusted profiled load (i.e., unreconciled profiled load) is the loss-adjusted profiled load from step 2 multiplied by the account usage factor from step 3. For each account and hour:

Unreconciled Profiled Load = Loss-Adjusted Profiled Load x Usage Factor

Procedure 2: Reconciliation of Hourly Loads to Zonal Total

This procedure aggregates the account’s hourly loads calculated in the previous procedure and compares the sum to the metered system load at each hour. This procedure applies to both interval metered and non-interval metered accounts. Any resulting difference for each hour is allocated back to all accounts proportional to their loads’ share of system energy. This procedure is further illustrated below by a simplified hypothetical distribution system serving two interval accounts and two profiled segments (monthly demand and monthly non-demand). The calculations are based on data from the following table.

Hourly Load Difference = Actual Hourly Zonal Load - Aggregated Acct. Hourly Loads

When the difference is allocated back to each account’s unreconciled load, the resulting new load value for each account is called the reconciled load. The sum of these reconciled loads for each hour for each electricity supplier represents the electricity supplier hourly energy obligation. As an example, the reconciled load for interval metered account 1 in the table above would be derived as follows:

Reconciled Load = Unreconciled Load + (Hourly Load Difference x Load Share Ratio)

In the day-after settlement the reconciled loads are reported at the whole MW level and are based on weather sensitive static load profiles. Approximately two months after the settlement period, at the close of the meter read cycle, dynamic load profiles are developed based on the actual load research data for the settlement period. The day-after hourly energy obligations derived for each day of the calendar month are then adjusted as described below.

Hourly Energy Obligation Adjustment: “60-day” Settlement

The second phase of the PJM energy settlement process occurs after all actual monthly energy usage data have been processed for a given calendar month in accordance with PJM guidelines. Procedures 1 and 2, as described above, are performed again for the 60-day settlement, which occurs approximately 60 days after the close of a calendar month. For example, data for the month of July 1-31, 2014, will be fully processed and settled on or about October 1, 2014.

The updated electricity supplier HEO will be calculated using the same processing steps used to derive the original electricity supplier HEO, but will use all available data collected subsequent to the day-after settlement. As a result of the data collection and subsequent reprocessing:

• The hourly profiles for non-interval metered and AMI accounts are now based on dynamic load profiles for the actual days of the settlement period, instead of on weather sensitive static load profiles.
• The actual load data for interval metered accounts (large commercial and industrial customers with MV90 metering) are now available to replace the average profile used in the day-after settlement.
• The meter reading cycle is completed for the month to be settled, so the hourly load profiles of all these accounts can be scaled to match known metered usage.
• There may be revised estimates of hourly system loads for each day of the settlement period. If so, the reconciliation of aggregated account loads to system totals will match a more accurate number.

BGE will generate an adjusted electricity supplier HEO that is compared to the initial electricity supplier HEO, and will submit to PJM a calendar-month file containing hourly electricity supplier HEO kWh adjustment amounts (i.e., adjustment amount in kWh = original electricity supplier HEO less updated electricity supplier HEO). PJM will then issue a final bill reflecting any adjustments. The bill adjustments issued by PJM will be calculated using the locational marginal price (LMP) for the hours adjusted. In addition to the adjusted electricity supplier HEO, PJM’s monthly bills to the electricity supplier or scheduling coordinator shall be subject to adjustment for any errors in arithmetic, computation, meter readings or other errors.

Adjustments to data after the 60-day settlement will be considered on a case by case basis, factoring in the affected LSEs. BGE will then forward the information to PJM and PJM will place the final adjustments on the appropriate parties’ bill(s). Disputes shall be resolved through the PJM Dispute Resolution process.