By:
Ronnel W. Domingo - 05:14 AM August 12, 2019
Customers of Manila Electric Co. can expect a refund of P1.08 billion as the
Energy Regulatory Commission (ERC) ordered the operator of the Wholesale
Electricity Spot Market to return the amount after an audit discovered
“miscalculations” made from June 2018 to May 2019.
The amount is part of
some P1.77 billion that the Philippine Electricity Market Corp. (PEMC) should
adjust to correct a process in the system called net settlement surplus (NSS)
allocations.
ERC Chair Agnes
Devanadera said in a statement that the refund to affected consumers—in Luzon
and the Visayas—totaled P1.4 billion.
Aside from the P1
billion for Meralco customers, P321.4 million will be returned to customers of
other distribution utilities and electric cooperatives.
“The remaining amount
of P371 million will be due generation companies, retail electricity suppliers
and directly connected customers,” Devanadera said. “We have directed PEMC to
immediately effect the refund.”
PEMC was also directed
to submit monthly reports on its compliance with the refund directive.
“An audit of relevant PEMC systems and operations may be in order,” the ERC
chair said. “We need to ensure that market processes and transactions are
accurately and efficiently carried out so as not to compromise the public
benefit of reasonable electricity pricing, as well as to ensure that our
consumers are spared from unnecessary burden.”
During the audit, the
ERC flagged inconsistencies in the NSS allocations issued by PEMC. Upon
validation, the spot market operator reported that the miscalculations were
caused by its erroneous application of the formula in its software that is used
to determine NSS allocations.
The Philippine
Competition Commission (PCC) earlier signed a memorandum of agreement with ERC
to collaborate on investigations that involve power sector players.
PCC is currently
assessing whether recent power plant outages were valid “unplanned breakdowns”
that inevitably affected supply conditions or were “manipulated” in order to
raise electricity prices.
“Our partnership [with
ERC] allows for the sharing of information and coordination of enforcement
actions toward a more robust competition landscape in the energy sector,” PCC
Chair Arsenio M. Balisacan said in a statement.
He said the team-up
with ERC completed a tripartite effort along with the Department of Energy (DOE),
with which PCC signed last June a separate agreement on cooperation toward the
same objective.
The MOA also
facilitated consultations with institutions or firms such as Philippine
Electricity Market Corp., National Grid Corporation of the Philippines and
generation companies to obtain relevant information.
PCC, DOE and ERC are
working together to coordinate probes on alleged collusion or abuses of
dominance in the power industry through information exchange and fact-finding.
The tripartite drive
combines “the policy mandate of the DOE, the regulatory functions of the ERC
and the market competition lens of the PCC,” Balisacan said.
He added that with the
ERC onboard, the three agencies expect to make headway in probing allegations
of collusion or abuse of dominance amid a series of shutdowns among power
plants “that may have contributed” to the increase in electricity prices
earlier this year.
Last April, the PCC
said it would look into allegations of possible collusion or abuse of dominance
of certain power generators following “simultaneous shutdowns that may have
caused an artificial supply shortage and consequently a hike in electricity
prices.”
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