Unaccounted for Energy (UFE) Rule Change: Global Settlement

Unaccounted for Energy (UFE) Rule Change: Global Settlement

AU Energy Compliance
The Australian Energy Market Commission (AEMC) has implemented a new rule which commenced (after delay) on 1 May 2022. The new rule relates to a change in the current market settlement framework. The rule changes the framework from the previous framework of ‘settlement by difference’ to a ‘global settlement’ framework. What is the difference/ what’s changed? The ‘settlement by difference’ framework was designed at a time when local retailers supplied electricity to all small customers. Under this approach, electricity within a distribution area was billed to the local retailer, except for the loss-adjusted metered electricity consumed by the customers of independent retailers, within their local area. This means that the local retailer for an area bore the risk of all residual electricity losses in that area (UFE). UFE includes unaccounted…
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