August 15, 2019
POWER consumers in the country can expect some relief in paying their electricity bills after the Philippine Electricity Market Corp. (PEMC) reported that the P1.774-billion refund ordered by the Energy Regulatory Commission (ERC) because of overbilling has been implemented.
In a statement on Tuesday, the operator of the Wholesale Electricity Spot Market (WESM) said it had complied with the state-run power regulator’s order on the net settlement surplus (NSS) allocation adjustment that would result in either a refund for some market participants or collection from others.
“As the governing body of the electricity market, our interest is in securing the integrity of market transactions, which include settlements, while upholding consumer protection. With this, we promptly complied with the directives detailed in the ERC Order on the NSS issued on August 1, 2019,” PEMC President Oscar Ala said.
“We are rectifying the misallocation of the NSS through a refund to the market participants who received less than what was due them while collecting from the others who have received more,” he added.
PEMC said a rate adjustment cap of P0.05 per kilowatt-hour (kWh) would be applied to all distribution utilities (DUs) to cushion the impact of the allocation adjustment on those who have to collect.
The market operator said collection for non-DUs would also be expedited to one month to ensure that customers would immediately feel the refund due to them.
It also submitted to the ERC an action plan on the settlement of the remaining balance of the allocation adjustment for the next 11 months beginning in the August 2019 billing period.
NSS is the power surplus or deficit remaining after all market transactions have been accounted for.
This accounts for price differences occurring between generator and customer locations or nodes due to losses and congestion, given the WESM’s locational marginal pricing scheme.
The allocation is distributed to trading participants that are entitled to receive a share of the surplus or deficit in accordance with ERC-approved methodology.
This comes after the commission directed the PEMC last week to immediately provide refunds worth P1.403 billion to Luzon and Visayas customers by rectifying the miscalculation on the NSS apportion and corresponding settlement calculations for the June 2018-to-May 2019 billing period.
Of that amount, 77 percent or P1.08 billion will be refunded to customers in the Manila Electric Co.’s franchise area and 23 percent or P321.36 million will be returned to customers covered by other DUs and electric cooperatives.
The remaining P371 million will be given to generation companies, retail electricity suppliers and directly connected customers.
The ERC issued the order after noticing inconsistencies in the share of generators and customers in the NSS allocations issued by the PEMC.
Upon validation, the PEMC told the agency the miscalculations were caused by its erroneous application of the formula in its software used to determine the allocations. Corrections were applied by the PEMC since then.
PEMC said it would strengthen existing mitigating measures, including conducting periodic audits to market systems and implementing a stringent change-management process.
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