Unaccounted for Energy (UFE)

Unaccounted for Energy (UFE)

The Australian Energy Market Operator (AEMO) is responsible for settlements in the National Electricity Market (NEM) and ensuring market generators are paid for the energy they provide, while retailers pay for the energy their customers use. 
UFE was introduced through the Global Settlements and Market Reconciliation rule, under the Global Settlement Framework on 1 May 2022. Please note that Aurora Energy has been absorbing this cost since this date. The change of law to implement UFE means that these costs are shared across all customers who consume energy in a region.

What is Unaccounted for Energy (UFE)?

UFE is the difference between the amount of energy used by a distribution zone, and the amount of energy that is consumed by customers and recorded by meters in that area. 

Why does UFE occur?

This could result from electricity loss, theft, metering malfunctions or estimation errors.

Why are you charged with UFE?

From 1 May 2022, we absorbed the cost of UFE. However, from 1 February 2025 these charges will be shared with customers to align with market practices. UFE charges are passed on to customers in the relevant distribution areas as the process leads to fewer settlement disputes. This improves the ability to identify metering issues and supports other forecasting and the management of distributed energy resources.

How will UFE be charged?

The UFE charges are calculated based on the load (MWh), State Spot Price ($/MWh) and an allocation by AEMO to the local network. UFE will be charged a backdated amount customer load and an ongoing line item on future invoices under ‘Market Charges’. 
The backdated amount will be a one-off cost/adjustment reflecting your customer load multiplied by actual AEMO revised settlement charges for the period from 1 March 2024 to 31 July 2024.

The ongoing charge is a variable rate that applies to your monthly consumption based on AEMO’s current UFE charges. This rate also includes adjustments of the UFE rate by AEMO that they make over the wholesale market’s 30-week settlement cycle.

More information

To read more about the Australian Energy Market Commission (AEMC) global change and market reconciliation, visit the AEMC website.