PEMC submits ‘refund adjustments’ for WESM traders

The Philippine Electricity Market Corporation (PEMC) has submitted to the Energy Regulatory Commission (ERC) its proposed 10.05 per kilowatt-hour (kWh) refund cap for the cost adjustments warranted in the net settlement surplus (NSS) to trading participants in the Wholesale Electricity Spot Market (WESM).

That was based on the 11.77billion refund order of the ERC arising from miscalculations on the NSS levied to WESM trading participants that include the generation companies and distribution utilities.

The governing body of the spot market said it will start the cost adjustment allocation beginning in its July 2019 billing to trading participants – which in turn, will also be reflected eventually in the bills of consumers.

Further, PEMC and the market operator of WESM noted that they submitted to the ERC “the plan of action for the succeeding months to allow for settlement of the remaining balance of NSS

allocation adjustment for the next 11 months” – and that will commence in the next August billing cycle.

“Following the ERC order to cushion the impact of NSS allocation adjustment to those who have to collect, a rate adjustment cap of 10.05 per kWh is to be observed by the distribution utilities,” PEMC has emphasized.

As explained by PEMC President Oscar E. Ala, “we are rectifying the misallocation 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.”

He provided an analogy that this is like balancing the allowance that a parent would supposedly give to his son or daughter, so not one of them will have more while the other is being shortchanged.

“This is similar to a situation wherein you are supposed to give your son and daughter 15.00 and 110, respectively. However, you inadvertently gave your son 110 and your daughter 15.00. And as a parent, one has to correct the amounts given to each,” Ala expounded.