THE operator of the country’s wholesale electricity spot market (WESM) is asking regulatory approval for a fixed market fee charge amounting to P0.0135 per kilowatt-hour (/kWh) to be used for its operations as well as those of its governance arm.
In its application with the Energy Regulatory Commission (ERC), the Independent Electricity Market Operator of the Philippines, Inc. (IEMOP) said the fee is to be shared with the Philippine Electricity Market Corp. (PEMC), which will get P0.00414/kWh or 30.67% of the total.
The remaining 69.33% or P0.00936/kWh will be the share of IEMOP. The fixed market fee will cover the entities’ budgetary requirements.
“This will provide better certainty in terms of availability of funds for intended programs and projects, as well as some degree of flexibility, to be better equipped to face the challenges of a highly dynamic electricity market,” the market operator said.
“A fixed market fee charge is likewise beneficial to the stakeholders, as it enables them to consider such charge in their financial planning and promote efficiency in their operations, particularly on the aspect of spending, which will ultimately benefit the consumers,” it added.
IEMOP said the fee was calculated based on the projected generation metered quantities for 2019 for Luzon and Visayas generation companies, and the aggregate projected budgetary requirements of PEMC and IEMOP for next year.
The entities are projecting a budget of P1,116,620,000 for 2019 to cover, among others, personnel services, maintenance and other operating expenses, capital expenditures and project enhancements. Of the amount, IEMOP accounts for P774.17 million while PEMC’s share is P342.45 million.
The fixed market fee charge is to be imposed on all power generation companies registered in the WESM based on their actual generation in kilowatt-hours.
IEMOP, a non-profit, non-stock corporation, said the filing of its application is pursuant to Sec. 30 of Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA). The provision states that the “cost of administering and operating the wholesale electricity spot market shall be recovered by the market operator through a charge imposed on all members,” provided that such charge is filed and approved by the ERC.
The market operator likened its application to ERC’s approval of rate-based applications, particularly of private utilities and electric cooperatives, where price and rate caps are imposed which consider the recovery of efficient expenditure and appropriate returns, as well as incentives for good performance.
“These are translated to fixed rates that are charged to their respective customers or customer classes for a defined regulatory period,” it said. — Victor V. Saulon
