ERC caps market fees of WESM

BY LENIE LECTURA – JUNE 21, 2022
from Business Mirror

The Energy Regulatory Commission (ERC) has capped the cost of administering and operating the wholesale electricity spot market (WESM) at a total of P897.93 million for the years 2019 and 2020.

In a resolution, the ERC has set the Market Transaction Fees (MTFs) for 2019 and 2020 at P448,966,163.25, respectively. The same amount is the authorized level of market fees for 2018.

MTF is the cost of administering and operating the WESM. The Philippine Electricity Market Corp. (PEMC), the autonomous group market operator and governing body of the spot market, files its proposed MTF with the ERC once every two years.

The said administrative cost is charged against all market participants, such as power generation companies, Power Sector Assets and Liabilities Management Corp. (PSALM), distribution utilities (DUs), and bulk end-user.

In the same resolution, the ERC directed PEMC to implement a refund of its over collection in the MTF for 2019 and 2020, to be apportioned among all the Luzon and Visayas participants. The said resolution did not indicate how much PEMC should return.

However, the ERC directed PEMC to submit its action plan for the implementation of the refund scheme, and the corresponding adjustment to the MTF, within 15 days upon receipt of the order dated June 16, 2022.

Aside from this, PEMC was told to submit a status of collection and the refund scheme for the approved level of MTF collected previously.

It can be recalled that in July 2020, the ERC promulgated its decision on PEMC’s MTF applications for the years 2015 and 2016-2017. In the said decision, the ERC approved a level of MTF significantly lower than the applied amount of PEMC.

As a result, the ERC directed the refund of P688,794,087.38

As refund involves generation charges, which is a pass-through charges, the refund that PEMC will extend to the DUs should automatically be extended to the DUs’ consumers.