SAP FERC Clearing: Just Get Rid of It

Among a number of challenges that utilities on SAP face, the process of FERC clearing comes up in our conversations with customers from time to time.

Clearing in the FERC post program is an abbreviated form of tracing that our CEO, Jerry Cavalieri, originally created in 1994, when he was an accounting principal at Pacific Gas & Electric leading the development of the SAP FERC module with HPC America. At that time, computing power was not adequate to handle the millions of records PG&E had to process, so FERC clearing was intended to gain much-needed process efficiency.

A great deal has changed since then, and for the last decade HPC has advocated an SAP FERC configuration that does not use clearing. In fact, we urge utilities to get rid of it.

Two years ago, one Fortune 500 utility used clearing groups for Service Company cost allocations and payroll overhead distributions as a means of speeding up the FERC trace. As a result, this utility sacrificed FERC trace accuracy and data granularity—and still had to endure lengthy FERC runs each month.

To eliminate the problems associated with FERC clearing, HPC updated this customer’s regulatory accounting model to support FERC balances with primary and secondary cost data. This modern design not only removed clearing, but also mapped costs across FERC accounts more accurately, increased the transparency of costs from FERC to source objects and accounts, and cut FERC processing time by 50% or more each month.

If you're facing challenges around FERC clearing or other aspects of SAP Financials for utilities, contact HPC to discuss pragmatic, meaningful improvements to your ERP.