Refund ordered

The Energy Regulatory Commission (ERC) has reduced the market transaction fees of the Wholesale Electricity Spot Market (WESM) by about 50-percent to P447.470 million from P896.410 million, which in turn will result in cost reduction when passed on to consumers.

The regulatory body similarly directed applicant-Philippine Electricity Market Corporation (PEMC) to refund over-collections in market fees that it raked in from allocation that was still anchored on the 2015 ruling of the regulatory body.

ERC Chairperson Agnes T. Devanadera noted that “in our evaluation, the Commission found that there are certain market transaction fee components that are unnecessary and unreasonable.”

She similarly specified there had been supporting documents that PEMC had failed to provide, which should have served as justification of the fees being sought for.

On the ordered refund, Devanadera emphasized that the payback must be “apportioned among all the Luzon and Visayas participants,” which are the trading participants in the linked spot market of the two power grids.

The chief regulator said the refund “shall be implemented over 12 months beginning in the next billing month upon receipt of the (ERC) decision, and shall be reflected as a separate line item in the WESM monthly billing statement.”

Corresponding to the ERC ruling, PEMC has also been ordered to submit its plan of action for the implementation of the refund scheme, as well as the mandated adjustment to the market transaction fees. The action plan is to be submitted within 10 days from the receipt of the decision of the regulatory body.

At the same time, the ERC ruled that the stature of PEMC is a government-owned and controlled corporation (GOCC) at its current standing as a non-stock corporation, hence, its functions must be imbued with public interest.

“As such, we have evaluated PEMC’s application on the basis of such GOCC classification,” the ERC chief stressed.

The market fees are being paid by trading participants in the spot market. And given the reduced allocation for PEMC, which in turn shall be shared with current WESM operator Independent Electricity Market Operator of the Philippines (IEMOP), the costs to be shouldered by market participations will be lower.

The ERC further stipulated that in its evaluation of the spot market fees’ application, it established that “PEMC’s actual budget utilization of certain items is lower than the proposed budget for the same.”
For that reason, the regulatory body explained that it approved certain components of the market transaction fees “based on actual expenses incurred” by the spot market operator.