ERC defers order for DUs to report generation rate
By Lenie Lectura – July 4, 2024
from Business Mirror
THE Energy Regulatory Commission (ERC) has suspended an earlier directive to distribution utilities (DUs) to submit their generation rates every fifth day of the month.
“Please be informed that the said advisory is hereby suspended to align the timelines for the issuance of the Wholesale Electricity Spot Market (WESM) bills by the Independent Electricity Market Operator of the Philippines (Iemop) and reporting requirements of the DUs,” the ERC said last Wednesday. The Department of Energy (DOE) website presents a total of 152 DUs, with the Manila Electric Co. (Meralco) leading the list.
The ERC earlier directed all DUs to submit updated generation rates on the 5th day of each month, to supplement their submissions under Resolution 14 (series of 2022) entitled “Adopting the Revised Rules Governing the Automatic Cost Adjustment and True-up Mechanisms and Corresponding Confirmation Process for Distribution Utilities” or the Revised ACA Rules.
The advisory, issued last June 18, was intended to allow the commission to anticipate any major changes in price that would require timely regulatory response.
When sought for comment, ERC Chairperson and CEO Monalisa C. Dimalanta said that the regular submission falls every 30th of the month.
“However, it’s already too late since they have already billed their customers,” Dimalanta said via Viber.
The agency, she added, is now “sorting out the periods” and “trying a way to anticipate price changes” after some of the DUs already receive their IEMOP bills after the 5th.
“In the meantime, DUs are directed to continue submitting actual consumer bills and computed rates, among other documents, pursuant to the Revised ACA Rules,” according to the ERC.
To note, electricity prices in the WESM went down to P6.15 per kilowatt hour (kWh) during the billing period May 26 to June 25 due to a drop in demand brought about by the rainy season.
Data from WESM operator Independent Electricity Market Operator of the Philippines (IEMOP) showed that electricity demand slowed by 6.2 percent to 14,710megawatts (MW) from 15,688MW in the previous billing month.
Of the total, Luzon’s electricity demand reached 10,664MW while Visayas hit 2,002MW. Electricity demand in Mindanao reached 2,044MW.
During the same period, WESM prices in Luzon plunged to P6.97 per kWh. For Visayas and Mindanao, WESM prices also went down to P8.56 per kWh and P4.61 per kWh, respectively.
Supply stood at 19,638MW, almost unchanged from the previous billing period. In Luzon, supply was recorded at 13,860MW, Visayas at 2,322MW, and Mindanao, 3,457MW.
In the previous billing cycle, April 26 to May 25, WESM prices increased mainly due to higher demand and supply for electricity from WESM. The P8.22 per kWh average WESM price for that period was 19.1 percent higher than the P6.90 per kWh for the month of April.
Market suspension
THE WESM market will be suspended when the red alert notice is hoisted over the grids by the National Grid Corporation of the Philippines (NGCP), the Energy Regulatory Commission (ERC) earlier ruled.
Under existing WESM rules, the ERC may suspend normal operations of the WESM in cases of natural calamities or following the official declaration of a national or international security emergency by the President of the Republic.
During the market suspension, the administered pricing based on the ERC approved Price Determination Methodology (PDM) shall be imposed. In this pricing mechanism, the weighted average of the last four similar trading days and dispatch intervals prices shall be considered.
Also recently, the ERC proposed an interim price cap of P19 per kWh for the reserve market. The regulators said the proposed amount is a “reasonable offer ceiling that will limit excessive pricing in the market and prevent windfall profits for ancillary service (AS) providers, with the end view of protecting consumer interest.”
