The Philippine Electricity Market Corporation (PEMC), which is the governance body overseeing the Wholesale Electricity Spot Market (PEMC), has been ordered to defer the collection of at least P0.20 per kilowatt hour (kWh) adjustment on its net settlement surplus (NSS) charges.

The ruling, which was issued by the Energy Regulatory Commission (ERC), should have resulted in that scale of increase if this will be passed-on to customers in the July billing, including those served by the Manila Electric Company (Meralco) as well as electric cooperatives.

NSS refers to settlement surplus or deficit after all market settlements in the WESM have already been accounted for, and that shall include any adjustment in the assignment of transmission line rentals to network service providers. The deferred NSS collection accounted for the WESM settlements in May.

The ERC qualified that it issued the collection-deferment directive upon confirmation of data and information that there had been “huge discrepancy in the WESM preliminary statement vis-à-vis the final statement for May 2021 supply month.”

The industry regulator stated that the NSS adjustment was “supposed to be reflected in the July 2021 electric bill as part of the generation charge.”

The ERC added “we have ordered PEMC to defer the collection of the NSS adjustment until the investigation on the said incident has been completed,” emphasizing that “if PEMC’s collection is not suspended, concerned distribution utilities and electric cooperatives will have additional collections from their customers resulting from the May 2021 NSS.”

As reiterated by ERC Chairperson Agnes T. Devanadera, “the Commission resolved to defer the collection of the NSS, which will be an additional charge of around P0.20 per kWh to Meralco customers.”

By resorting to that cost pass-on postponement, she stressed that this could “prevent and shield the electricity consumers from a bill shock in their July 2021 electric bills.”

Devanadera further assured that the regulatory body “will get to the bottom of this and make sure that any erring market participant will get penalized as soon as it is established.”

Relative to such development, the ERC similarly ordered PEMC and system operator National Grid Corporation of the Philippines “to explain in writing the reason for the NSS adjustment that caused the WESM bill adjustment.”

As emphasized, the NSS is being distributed to trading participants “that are entitled to receive a share of the surplus or deficit in accordance with the ERC-approved pricing mechanism.”