August 14, 2019 | 10:39 pm
THE Philippine
Electricity Market Corp. (PEMC) said it “immediately” acted on the Energy
Regulatory Commission’s (ERC) order on the adjustment of the net settlement
surplus (NSS), resulting in either a refund to some market participants or
collections from the others.
“We are rectifying the
mis-allocation of the NSS through a refund to the market participants who
received less than what was due them while collecting from the others who have
received more,” PEMC President Oscar E. Ala said in a statement.
“This 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.
PEMC, the operator of
the country’s wholesale electricity spot market, said the NSS adjustments
started with the July 2019 billing period.
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 because of losses and congestion given the electricity
market’s “locational marginal pricing scheme.”
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.
“As the governing body
of the electricity market, our interest is in securing the integrity of market
transactions, which include settlements, while upholding consumer protection.
With this, we promptly complied with the directives detailed in the ERC Order
on the NSS issued on Aug. 1, 2019,” Mr. Ala said.
PEMC noted that the
collection for non-distribution utilities will be hastened to one month. This
is to ensure that utilities expecting a refund will be able to immediately pass
on the benefit of the refund to their end consumers, it added.
On Friday, the ERC said
it directed the market operator to make the necessary adjustments NSS
allocations and the corresponding settlement calculations for the June 2018 to
May 2019 billing months.
The regulator said the
directive to PEMC is a result of its findings on the inconsistencies in the
share of power generators and customers in the NSS allocations issued by the
market operator.
“An audit of relevant
PEMC/MO (market operator) systems and operations may be in order. 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,” said ERC Chairperson and Chief Executive Officer Agnes VST
Devanadera. — Victor V. Saulon
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