IEMOP, PEMC propose 2025-2027 market fees

By Sheldeen Joy Talavera – October 14, 2024 | 9:12 pm
from Business World

Commencement of the commercial operations of WESM in Mindanao at the IEMOP control room

THE Independent Electricity Market Operator of the Philippines (IEMOP) and the Philippine Electricity Market Corp. (PEMC) are seeking the approval of the Energy Regulatory Commission (ERC) for their proposed market fee for 2025 to 2027.

IEMOP is the operator while PEMC is the governing body of the Wholesale Electricity Spot Market (WESM), the electricity trading floor.

IEMOP and PEMC jointly filed the application to the ERC for provisional authority to impose a market fee of P0.0087 per kilowatt-hour (kWh) to all generation companies registered with the WESM.

The WESM sells electricity to companies whose long-term contracted power supply is insufficient to meet customer needs.

Of the total proposed fixed market fee charge, P0.0049 per kWh will be allocated to IEMOP while P0.0038 per kWh is for PEMC.

“This is calculated based on (a) the projected generation metered quantities for CY (calendar years) 2025 to 2027 for Luzon, Visayas, and Mindanao generation companies and (b) the aggregate projected budgetary requirements of IEMOP and PEMC for CY 2025-2027, using the same formula for market transaction fee rate previously approved by the Honorable Commission,” according to the application.

In the application, IEMOP and PEMC projected a P3.4 billion budgetary requirement for the 2025- 2027 period. This covers personnel services, maintenance and other operating expenses, and capital expenditure.

The applicants said that the ERC authorized them to collect market transaction fees for 2023 of P615.76 million, or an indicative rate of P0.00564 per kWh for 2023, less than the P1.02 billion they sought.

“Given the substantial cuts and disallowances ordered in the recent issuances of the Honorable Commission in the preceding years’ market fees applications, applicants IEMOP and PEMC have both suffered and reported deficits as early as CY 2020,” they said.

The parties said that without sufficient funds, they “will not be able to sustain their effective and efficient operations of the WESM and faithfully fulfill their mandate.”

“At the current level of market fees, the applicants may not even sustain normal operations of the WESM,” IEMOP and PEMC said.