Republic of the Philippines

ENERGY REGULATORY COMMISSION

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ERC Orders PEMC to Refund 2016 and 2017 Over Collections

The Energy Regulatory Commission (ERC) ordered the Philippine Electricity Market Corporation (PEMC) to refund the over collection in the Market Transaction Fee (MTF) in 2016 and 2017.  The ERC’s directive is contained in the 83-paged Decision it issued with respect to PEMC’s application for the approval of the level of Market Fees for the Calendar Years 2016-2017 for the Philippine Wholesale Electricity Spot Market (WESM).  

“The Commission determined the over collection by getting the variance between the Market Transaction Fee (MTF) 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 CEO Agnes VST Devanadera explained.

In evaluating PEMC’s application, the ERC made use of the following considerations: (1) the nature of PEMC as a Government-Owned and Controlled Corporation (GOCC); (2) the relevance and reasonableness of the actual utilization of each cost component as reflected in the 2016 and 2017 Variance Reports submitted by PEMC; (3) the use of actual proof of expenditures submitted by PEMC to verify its utilization; and (4) comparison of the expenditures of each cost item with industry standards, as well as existing rules and regulations provided for GOCCs.

The ERC’s Decision directed PEMC to implement the refund of the over collection in the MTF for CY 2016 and 2017 over twelve (12) months beginning on the next billing month upon receipt of the relevant Decision.  PEMC shall reflect the said refund as a separate line item in the WESM monthly billing statement, and to correspondingly implement the adjusted MTF which should be net of the amount to be refunded.  PEMC is also directed to submit to the ERC its Plan of Action for the implementation of the refund scheme and the corresponding adjustment to the MTF within ten (10) days upon receipt of the Decision.  The ERC also provided PEMC the general guidelines for its future MTF applications.  

“We urge the PEMC to strictly observe the general guidelines that we have indicated in our Decision for its future Market Transaction Fee applications so that the consuming public, who will eventually bear the costs of the Market Transaction Fee, will not be unnecessarily burdened.  As we have always instructed, stakeholders should be prudent in incurring costs and we encourage them to be sensitive and to show empathy to the consumers who are mostly struggling at these difficult times due to the worsening pandemic”, Chair Devanadera concluded.


 


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