PEMC ordered to refund P1 billion overcollection

MANILA, Philippines — The Energy Regulatory Commission (ERC) has directed the Philippine Electricity Market Corp. (PEMC) – the previous operator of the country’s electricity spot market – to implement another refund, this time amounting to over P1 billion for its overcollections in 2016 and 2017.

ERC ordered PEMC to refund the overcollection in the market transaction fee (MTF) in 2016 and 2017 for a period of 12 months starting in the next billing month upon receipt of the decision.

PEMC proposed MTF in the amount of P1.07 billion and P1.01 billion in 2016 and 2017, respectively.

However, the ERC only allowed PEMC to implement P486.25 million in 2016 and P486.44 million in 2017.

The over collection – amounting to over P1.1 billion – should be refunded to wholesale electricity spot market (WESM) participants and reflected as a separate line item in the WESM monthly billing statement.

It should also implement the adjusted MTF which should be net of the amount to be refunded.

“The commission determined the over collection by getting the variance between the MTF collected in 2016 and 2017, and the ERC-approved budget of PEMC for the same period. The resulting variance is the amount to be refunded which shall be apportioned among all the Luzon and Visayas participants,” ERC chairperson and chief executive officer Agnes Devanadera said.

In evaluating PEMC’s application,  ERC considered the nature of PEMC as a government-owned and controlled corporation (GOCC), the relevance and reasonableness of the actual utilization of each cost component as reflected in the 2016 and 2017 variance reports submitted by PEMC,  the use of actual proof of expenditures submitted by PEMC to verify its utilization and comparison of the expenditures of each cost item with industry standards as well as existing rules and regulations provided for GOCCs.

PEMC was ordered to submit its plan of action for the implementation of the refund scheme and the corresponding adjustment to the MTF within 10 days upon receipt of the decision.

ERC also provided PEMC the general guidelines for its future MTF applications.