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Geothermal operator FDC Misamis set for March ERC hearing over P1.47B in unpaid power bill

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PHILSTAR

THE Energy Regulatory Commission (ERC) is set to hear a petition by a power generation company to compel the electricity spot market operator to disclose relevant information about the power generated by companies in Mindanao and their corresponding usage by distribution utilities that remain unpaid.

In its petition, the Gotianun-controlled FDC Misamis Power Corp. placed the aggregate amount due at P1,476,201,933.41.

“Petitioner [FDC Misamis] has undeniable substantial legal standing and interest regarding the relief herein sought, as [it] stands to be unjustly prejudiced, as it already has been so prejudiced, by the continued (i) absence of the unaccounted-for generated and consumed electricity during the suspension of IMEM, and (ii) total non-payment to date, by such recipients and users of the aforesaid generated and consumed electricity,” the company said in its petition.

It said it was “ultimately” seeking the recovery by respondent Independent Electricity Market Operator of the Philippines (IEMOP) on the company’s behalf of the payments for the electricity consumed by the utilities and end-users in Mindanao.

It also named Philippine Electricity Market Corp. (PEMC), the governance arm of the wholesale electricity spot market (WESM), a co-respondent.

FDC Misamis is an independent power producer administrator of Mt. Apo 1 and Mt. Apo 2 geothermal power plants in Kidapawan City, North Cotabato, and the owner and operator of a coal-fired power plant in Villanueva, Misamis Oriental.




IMEM is the Interim Mindanao Electricity Market, the southern island’s initial foray into operating a wholesale electricity spot market. It was launched in 2013 but its operations have since been suspended.

It left power generation companies with unrealized revenues for the electricity they generated.

The ERC has set March 26, 2019 the preliminary hearing of the petition, which was filed by FDC Misamis on Dec. 7.

FDC Misamis said without the proper compensation and accounting of the “essentially unaccounted-for energy,” the resulting average electricity costs consumed by electricity consumers in Mindanao appear lower than its true cost, “thus potentially creating, if not already having created, a false perception of the true cost of electricity and unwarranted benefited at the highly unjust expense” of the company.

It added that it filed the petition in the interest of fairness and accountability for all affected parties and of orderly procedure on the matter, and in order to protect the interest of the company “and all other similarly situated who may likewise be so prejudiced.”

FDC Misamis has bilateral contracts with 13 electric cooperatives covering the combined output of the two geothermal power plants at 95 megawatts (MW). Its coal-fired power plant has separate contracts with 16 cooperatives.

The company said it later discovered that the output of the power plants had been consumed without payment by electricity consumers in the grid as a result of the suspension of the IMEM in February 2014.

It placed the unpaid quantity at 311,782.97 kilowatt-hours (kWh), which is the central issue of the petition.

The creation of IMEM was called for by the Department of Energy through a circular that directed PEMC to develop and implement an interim market operator in Mindanao as a measure to immediately address the power supply woes in the area.

It featured a day-ahead pricing market wherein the power generators or market participants submitted their bids or offers a day before the actual delivery or curtailment of energy.

IMEM had mandated generators, directly connected customers and distribution customers to offer their excess generation capacities to help correct energy imbalances through the use of the merit order system, a scheme that gives dispatch priority to the lowest bidders.

However, the interim operator was suspended a few months after its initial launch because of a “system collapse” and the need to “resolve operational and commercial issues and concerns.”

The suspension resulted in the absence of a venue for transparent and efficient utilization of all available and additional capacities “over and above the contracted supply capacities of the load customers,” FDC Misamis said — Victor V. Saulon

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