A quick update on ERCOT retail settlements: we are seeing significant deviations across the board in expected resettlement amounts with respect to adjusted metered load - above and beyond any anticipated resettlement numbers due to missing meter reads. The difference is now coming from UFE values, which have also been resettled. Below is graph of historical UFE in 2021, for context, with initials, finals, and resettles all displayed:

As you can see, the initials for the blackout period were highly negative, which means that load was initially counted as being much higher than generation. This was likely due to the amount of missing meter data that was proxy day imputed. Now that the re-reads have come in, the UFE numbers are being revised, and the net result is that retail will owe the difference.

This will have major negative financial impacts to every single retailer operating in ERCOT. Positive UFE numbers are socialized costs across the market, as they correspond to generated power that never made it to an end meter (aka, it’s simply “unaccounted for” - attributable to various line losses and inefficiencies across the grid infrastructure). Each retailer pays a load ratio share of the marketwide UFE value to all generators.

From the above chart, during the blackout period, we’re seeing a total of around 516GWh total in negative UFE over the blackout period, which, if fully clawed back during resettlement, would correspond to $4.6 billion (at $9k/MWh) additionally owed by retailers.

With this revelation, and accounting for the further unwillingness of ERCOT and the PUC to retroactively adjust ancillary charges, we anticipate severe net costs will be incurred by retail energy providers, and in turn, their customers.