Resoulution No. 6 series of 2009ERC adopts rules for timely refund of WESM interim payments
The Energy Regulatory Commission (ERC) approved the Rules for the Distribution of Net Settlement Surplus (NSS) on 23 February 2009. The Rules were promulgated by the ERC to ensure that the NSS is returned promptly to the concerned Wholesale Electricity Spot Market (WESM) players in an orderly manner for the eventual refund to the consuming public.
The net settlement surplus (NSS) is the excess payment made by players in the WESM resulting from the adoption of the locational marginal pricing (LMP) concept in the WESM. These WESM players consist of generation companies, distribution utilities (DUs), wholesale suppliers, wholesale aggregators, retail electricity suppliers and end-users of electricity directly connected to the transmission system. Under the LMP concept, different electricity spot prices in different locations in Luzon are generated in the spot market to account for transmission losses and congestion. The Rules now require the Philippine Electricity Market Corporation (PEMC), the corporation tasked with billing and settling transactions in the spot market, to incorporate the NSS adjustments in the current WESM bill.
Distribution utilities (DUs) which are WESM customers will thus pay only the net amount that should henceforth be reflected in the WESM bill. This will benefit the electricity end-users who are customers of these DUs in terms of a lower bill. As for the undistributed NSS prior to the issuance of the said Rules, the DUs have been required to immediately re-distribute any NSS retained to the corresponding end-users at the retail level. This means that the DUs, which are recipients of the NSS shall immediately re-distribute to their end-users the NSS starting on the next billing period after receipt of the NSS where the period of re-distribution shall correspond to the months that the NSS has accumulated.
The Rules shall be implemented in Luzon and will take effect fifteen (15) days following its publication in a newspaper of general circulation and will continue until otherwise directed by the ERC.
“The concerns on the distribution and re-distribution of the NSS have finally been resolved. These Rules will provide guidance to all stakeholders in the prompt and equitable return of the NSS. The ERC recognizes the proactive role played by the stakeholders of the electric power industry in the deliberations to finalize the Rules,” ERC Chairperson Zenaida G. Cruz-Ducut declared.
Resoulution No. 6 series of 2009
March 11, 2009