WESM operator ordered to refund P2 B to customers

MANILA, Philippines — The Energy Regulatory Commission (ERC) has ordered the wholesale electricity spot market (WESM) operator to return nearly P2 billion to Luzon and Visayas consumers due to miscalculations.

The refund order was due to the inconsistencies found by the ERC in the share of generators and customers in the net settlement surplus (NSS) allocations issued by the Philippine Electricity Market Corp./Market Operator (PEMC/MO).

Upon validation, the PEMC/MO reported to the ERC that the miscalculations were caused by its erroneous application of the formula in its software that is used to determine NSS allocations.

PEMC/MO has applied the necessary corrections after it was ordered by the power regulator.

As a result of the corrections, WESM trading participants are expected to either be entitled to a refund or will be made to return excess allocations.

The NSS correction by the PEMC/MO covered the period from June 2018 to May 2019 and is estimated at P1.77 billion.

ERC chairperson Agnes Devanadera said the Luzon and Visayas customers are due a refund of P1.4 billion, of which 77 percent or P1.08 billion will be refunded to consumers in the Manila Electric Co. (Meralco) franchise area and 23 percent or P321.36 million will be refunded to consumers covered by other distribution utilities and electric cooperatives.

Meanwhile, the remaining P371 million will be due generation companies, retail electricity suppliers, and directly connected customers, she said.

“We have directed PEMC/MO to immediately effect the refund, no later than the July 2019 billing period to benefit our consumers,” Devanadera said.

ERC said 81 percent of the amount 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 DUs.

The PEMC/MO has submitted to the ERC its plan of action with respect to the collection scheme it proposes to implement for the recovery of amounts from specific DUs.