By Lenie Lectura - August 15, 2019
THE Philippine Electricity Market
Corp. (PEMC)/Market Operator said Wednesday it has complied with the refund
order of the Energy Regulatory Commission (ERC).
“We are rectifying the misallocation
of the NSS [net settlement surplus] through a refund to the market participants
who received less than what was due them while collecting from the others who
have received more,” said PEMC President Oscar E. Ala.
The ERC found inconsistencies on how
PEMC allocated the NSS. It ordered PEMC to refund a total of
P1.774 billion.
The NSS is the surplus or
deficit remaining after all market transactions have been accounted for. This
accounts for price differences occurring between generator and customer
locations or nodes due to losses and congestion given the Wholesale Electricity
Spot Market’s (WESM) locational marginal pricing scheme.
The NSS is distributed to trading
participants that are entitled to receive a share of the surplus or deficit in
accordance with an ERC-approved methodology.
Of the total refund of P1.774
billion, the amount due Luzon and Visayas consumers is P1.403 billion.
Seventy-seven percent or P1.08 billion of this will be refunded to consumers in
the Meralco franchise area, while 23 percent or P321.36 million will be
refunded to consumers covered by other distribution utilities and electric
cooperatives.
The rest, P371 million, is owed to
certain generation companies, retail electricity suppliers and directly
connected customers.
At least 81 percent of the amounts
to be refunded will be collected by the PEMC/MO from generation companies and
retail electricity suppliers which were allocated far greater settlement
amounts than what were supposed to be due them. The remainder will be collected
from distribution utilities (DUs).
Ala said PEMC immediately
implemented the ERC order on the adjustments to the NSS allocation beginning
with the July 2019 billing period.
“Following the ERC order to cushion
the impact of NSS allocation adjustment to those who have to collect, a rate
adjustment cap of P 0.05 per kWh [kilowatt-hour] is to be observed by the
distribution utilities,” said PEMC.
Ala said PEMC’s inconsistency is
similar to a situation “wherein you are supposed to give your son and daughter
P5 and P10, respectively. However, you inadvertently gave your son P10 and your
daughter P5. And as a parent, one has to correct the amounts given to each.”
He added that the collection for
non-DUs will also be expedited to one month. This is to ensure that DUs expecting
a refund can immediately pass on the benefit of the refund to their
end-consumers.
PEMC/MO also submitted to the ERC
the plan of action for the succeeding months to allow for the settlement of the
remaining balance of the NSS allocation adjustment for the next 11 months to
commence with the August 2019 billing period.
In compliance
with the ERC Order, the PEMC/MO will fortify existing mitigating
measures such as the conduct of periodic audits to market systems and
implementing a stringent change management process.
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