PEMC sets ‘refund' scheme for congestion charges in Visayas

Published September 29, 2021, 4:15 PM

by Myrna M. Velasco

The Philippine Electricity Market Corporation (PEMC), in its capacity as governance body of the Wholesale Electricity Spot Market (WESM), is sorting out ‘refund mechanism’ on congestion charges collected from consumers in the Visayas grid.

PEMC will also be taking the lead in enforcing the subsequent suspension of such charges as directed by the Energy Regulatory Commission (ERC).

The stop-collection ruling of the regulatory body issued last week was triggered by an incident that caused the outage of the Cebu-Negros submarine cable of the National Grid Corporation of the Philippines (NGCP) because of a damage on the facility due to dredging activities of the Department of Public Works and Highways (DPWH) in the area.

The ERC further directed that the suspension of congestion charges will stay “until a more applicable pricing and settlement solution is ordered by the Commission.” The ERC also ordered the return to customers collected congestion charges.

At this stage, PEMC President Leonido J. Pulido III noted that his company, in coordination with WESM operator Independent Electricity Market Operator of the Philippines (IEMOP), “is currently fleshing out the details of the amounts and the manner of refund to the affected customers.”

Once implemented, PEMC guaranteed that “the application of the adjustments in the WESM’s billing and settlements will be retroactive from the June 2021 billing period.”

It is PEMC that is serving as the legal entity securing approvals for any charges or market transaction fees that the WESM market operator (IEMOP) would be passing on to its trading participants; that in turn, will also be passed on or collected from consumers.

Pulido stressed that the WESM governance body “recognizes the financial burden that the Visayas electric power consumers may bear attributable to the congestion caused by the damaged submarine cable.”

Nevertheless, he qualified that “the incident cannot discount the fact that supplying power also entails costs on the part of the dispatched generators.”

Pulido thus indicated that “further study and discussion with the stakeholders need to be undertaken to also allow for the recovery of the congestion costs for the power supplied to the areas affected by this incident and how these will be considered in the WESM bills of customers.”

PEMC committed that it will soon be submitting to ERC its recommendations on the pricing and settlement solutions.


“Once finalized, the proposed solution shall be formalized through the incorporation of changes to the market rules – specifically on the dispatch protocol as well as the billing and settlement provisions,” PEMC said.

To recall, NGCP stated that the repair of the damaged facility may last up to 26 months; hence, that prompted ERC to issue the ‘stop-collection’ ruling, so it could help cushion the financial burden of consumers in the affected areas. ###