ERC, IEMOP discuss pass-on scheme on deferred P22.64-B charges
BY MYRNA M. VELASCO – Apr 17, 2023 04:35 PM
from Manila Bulletin
The Energy Regulatory Commission (ERC) has been discussing with the Independent Electricity Market Operator of the Philippines (IEMOP) the proposed measures for the pass-on of P22.64 billion worth of deferred charges which accumulated in 2013 following strained supply in the Luzon grid due to simultaneous forced outages of power plants which coincided with the maintenance shutdown of the Malampaya gas production facility.
According to ERC Chairperson Monalisa C. Dimalanta, the pass-on mechanism is still being fleshed out with IEMOP, “because in the original proposal, the impact could be financially painful to the consumers, so we are revising the recovery period.”
Power utility giant Manila Electric Company (Meralco) previously indicated that it will seek guidance from the ERC before it will implement the cost pass-on, because the impact of that will be hike in the electric bills of its customers.
The deferred collection had been mainly attributed to the charges payable to trading participants in the Wholesale Electricity Spot Market (WESM) — that the previous market operator (Philippine Electricity Market Corporation) opted not to settle because of the legal cases that ensued following the so-called ‘perfect storm’ episode in the industry due to the massive scale shutdowns of power generating assets.
However, following a ruling rendered by the Supreme Court last year, generation companies (GenCos) were finally allowed to collect uncollected charges for November and December supply months in 2013.
IEMOP President Richard Nethercott acknowledged that “the mechanics are still being firmed up with the ERC; and we are also finalizing the amounts to be collected.”
He qualified that the other concerns being evaluated are also the payment to some entities – primarily those that have already sold their companies or shareholdings to other players.
“The companies who paid in 2013, some of them are no longer existing; some of them were already sold, so there are already new parties involved. These are the limitations, that’s why it will take time before we can implement,” he explained.
The unplanned outages of electric generating assets in 2013 had caused massive spikes in WESM prices – that if passed on one-time in the electric bills could redound to surge in electricity tariffs at the range of P4.00 to P5.00 per kilowatt hour (kWh), primarily to consumers in the franchise area of Meralco.
Investigations on the allegation of ‘collusive acts’ of the GenCos had not been completed yet by the ERC, and there is no specific pronouncement if that will have to be resolved first before the rate hikes induced by plat outages will be allowed by the industry regulator.
