ERC receives PEMC’s new application for WESM price determination
The Energy Regulatory Commission (ERC) received on February 22, 2006 the application (docketed as ERC Case No. 2006-007 RC) of the Philippine Electricity Market Corporation (PEMC) for the approval of the Price Determination Methodology (PDM) for the Wholesale Electricity Spot Market (WESM). Said application supersedes the original application that PEMC filed on June 26, 2003 under ERC Case No. 2003-356.
PEMC, in a hearing before the ERC conducted on February 10, 2006, voluntarily withdrew its original PDM application in view of the recent Supreme Court ruling which nullified Manila Electric Company’s (MERALCO) recovery of generation cost adjustments due to some technical requirements. PEMC filed anew its application to satisfy said requirements and in order to incorporate the revisions to the PDM as ordered by the ERC.
The PDM will serve as the guiding principle for the market participants on how electricity in the WESM will be priced. It will provide the specific formula that will enable the market participants to verify the correctness of the charges being imposed.
The Electric Power Industry Reform Act (EPIRA) mandates the establishment of the WESM wherein the PDM is one of the three (3) pre-requisites prior to WESM operation. The other two (2) pre-requisites are the level and structure of market fees and the administered price, which are both undergoing evaluation by the ERC.
“These regulatory filings are necessary to ensure consumer protection through realistic pricing and to enhance the competitive operations of the electricity market,” ERC Chairman Rodolfo B. Albano, Jr. clarified.