Customers affected by cable outage to get refund–PEMC

BY LENIE LECTURA – SEPTEMBER 29, 2021
from Business Mirror

The Philippine Electricity Market Corp. (PEMC) will recommend to the Energy Regulatory Commission (ERC) a pricing scheme for the duration of the outage of the Cebu-Negros Submarine Cable, in its bid to balance the interests of consumers and power firms.

The governing body of the Wholesale Electricity Spot Market (WESM) said on Wednesday it will comply with the directive of the Energy Regulatory Commission (ERC) to suspend the collection of congestion-related charges from its Visayas customers, following the damage sustained by the National Grid Corporation of the Philippines’ (NGCP) submarine cable.

According to PEMC President Leonido J. Pulido III, his office and WESM operator, Independent Electricity Market Operator of the Philippines (IEMOP), are currently fleshing out the details of the amounts and the manner of refund to the affected customers, as well as the recommendations to be submitted to the ERC on the pricing and settlement solution that may be applied during the repair period.

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.

“We recognize the financial burden that the Visayas electric power consumers may bear attributable to the congestion caused by the damaged submarine cable. As such, we are working with the Department of Energy (DOE), the ERC, IEMOP, and the NGCP in maintaining the balance between protecting the consumers and ensuring the sustainability of the generators,” said Pulido.

The ERC earlier received reports of significant increases in the electricity rates of consumers beginning June.  The significant increases in electricity billings have been decried by many stakeholders in Panay and Negros as an unreasonable burden to consumers and businesses.

As such, the ERC directed PEMC to stop collecting the said charges from the distribution utilities (DUs), which, in turn, bills the consumers.

In addition, the ERC likewise directed PEMC to refund those that were already collected from the customers for the billing period of June to August. The refund will be done in a period equivalent to the number of months covered by the subject collections.

PEMC was also directed to defer payment of congestion and other applicable charges to generation companies affected by the subject incident, until the complete restoration of the said transmission line by the NGCP, or until a more applicable pricing and settlement solution has been determined by ERC.

Pulido said PEMC already submitted information to the ERC last September 15, supporting the regulator’s review of the unusual results of the July and August WESM billing periods, including the high line rental charges in the Negros and Panay regions.

In the exercise of its functions, Pulido said PEMC will submit its proposed pricing and settlement solution during the repair activities which could take up to 26 months.

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

Damages to the NGCP submarine cable were caused during the Department of Public Works and Highways’ dredging activities in the area last June, resulting in congestion that limits the available supply.

Consequently, costlier diesel plants have been tapped to compensate for the load required, ultimately setting the marginal costs that define the current pricing in Negros and Panay.  Further, electricity prices have also been influenced by high line rental amounts due to congestion.