By Danessa Rivera (The Philippine Star) | Updated October 26, 2017 -
12:00am
MANILA, Philippines — Philippine
Electricity Market Corp. (PEMC), the operator of the country’s wholesale
electricity spot market (WESM), is asking regulatory clearance to jack up its
market fees to raise additional funds to cover its operations.
PEMC filed an application with the
Energy Regulatory Commission (ERC) to approve its P882.21-million funding
requirement to cover its expenditure program.
Initial figures peg the market fee
rate of 1.04 centavos per kilowatt-hour (kwh).
The proposed amount covers personal
services, which pertain to the salaries and benefits of its 160 employees in
Luzon and Visayas.
It will also fund PEMC’s maintenance
and other operating expenses, as weill as capital expenditures, which consist
of enhancements and upgrades to the Market Management System (MMS) and
corporate infrastructure, and the cost of lease improvements.
The amount also takes into
consideration PEMC’s cost of the preparations and initial operations of the
WESM in Mindanao next year.
The fees will be collected from the
WESM participants in Luzon and Visayas only, pending the commencement of
commercial operations of WESM in Mindanao.
WESM Mindanao commenced trial
operations last June 26, serving as a transition period for energy
stakeholders.
The trial operations program
contains a set of preparatory activities that aim to familiarize all Mindanao
participants in the implementation of the WESM via the market systems and
procedures to be deployed.
PEMC said Mindanao participants are
expected to be involved in the conduct of end-to-end testing of all interfaces
and systems that will involve simulations of all processes such as
registration, bid submission, pricing and scheduling, and settlement.
WESM Mindanao is expected to start
commercial operations next year.
The establishment of WESM in
Mindanao is a high priority agenda of Energy Secretary Alfonso Cusi, as
underlined in Republic Act 9136 or the Electric Power Industry Reform Act of
2001 (EPIRA).
In Luzon, WESM commenced commercial
operations on June 26, 2006 while the Visayas grid was integrated into the WESM
on Dec. 26, 2010.
EPIRA paved way for the creation of
WESM, which serves as a trading facility for power generators and buyers of
electricity such as distribution utilities. Under the law, prices at WESM
should be governed by market forces.
The law also provides that WESM
rates could be passed on to consumers under the generation charge component of
their electricity bills.
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