ERC orders another refund of excess WESM fees

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The Department of Energy deems it necessary to ensure the cost-effective delivery of electricity generated in regions with abundant RE resources in order to attain sustainable, stable, secure, sufficient, accessible, and reasonably-priced electricity supply and services.

The Energy Regulatory Commission (ERC) has ordered another refund of excees fees collected at the Wholesale Electricity Spot Market (WESM) in 2016 and 2017.

The regulator’s decision had slashed the proposed market transaction fee by the Philippine Electricity Market Corp. (PEMC), the spot market’s governing body, in a decision issued July 9.

“The Commission determined the over-collection by getting the variance between the market transaction fee 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 VST Devanadera said in a statement Friday.

In its market fee proposal filed in 2015, PEMC wanted to collect P966.26 million from WESM participants in 2016 and P916.18 million in 2017.

But these fees were cut to P486.25 million for 2016 and P486.44 million for 2017.


The ERC based its decision on the “relevance and reasonableness” of PEMC’s utilization of each of its proposed cost component based on its 2016 and 2017 reports; its use of proof in verifying utilization; and pitting the expenditure of each cost item against industry standards and rules and regulations provided for government-owned and controlled corporations.

The PEMC was ordered to pay back market participants for the excess fees within 12 months of receipt of the ERC decision. It must also submit an action plan for implementing the repayment scheme and the adjustment to its transaction fee level.

The refund, according to the commission, must be reflected as a separate line item in the WESM monthly billing statement.

The ERC also set guidelines for future applications to collect market fees.

Last week, the regulator also ordered the PEMC to pay back WESM participants for excessive market fees in 2015.

It also ruled that the company’s expenditure plan was “unnecessary and unreasonable,” with no supporting documents to justify the collection. — Adam J. Ang