Oracle Utilities Market Settlements Management Overview

Oracle Utilities Market Settlements Management (MSM) provides the core functionality for calculating and settling energy changes, also referred known as load settlement,.

Market settlement is the process of reconciling the difference between a supplier’s energy purchases and its customer’s usage. Suppliers purchase energy via bilateral contracts and day-ahead market transactions. Any differences between these purchases and supplier customer usage must be determined by the market and charged or credited at real time prices. The supplier’s customer usage is not directly determined by the market, but by numerous other market participants that track customer supplier enrollments, aggregate customer usage to the supplier, and submit supplier’s usage schedule to the market.

Load settlement starts with the bottom up aggregation of actual load or estimated load for individual customer accounts or service points. Distribution and transmission losses are added in to calculate an unreconciled load amount. The market determines the total generation supplied to a zone and the difference with the unreconciled load is referred to as Unaccounted for Energy (UFE). The UFE is then allocated to suppliers on a load ratio share basis.

The load settlement process is typically performed multiple times. The “preliminary” load settlement is done soon after the Operational Day and is often based on estimated load. The “final” load settlement is done around 60 days after the Operational Day, so that actual data has been received and customer bills issued.

The market participant responsible for load settlement can differ per market. For example, load settlement for a large portion of the Texas market is performed by an Independent System Operator (ISO) known as the Electric Reliability Council of Texas (ERCOT), whereas in the PJM market (encompassing Pennsylvania, New Jersey, and Maryland) load settlement is the responsibility of the Electric Distribution Company (EDC). While there are significant differences between markets in how load settlement is preformed, the high-level process steps are basically the same.