PEMC asks ERC to hike fees by P841-M

The Philippines Electricity Market Corp. (PEMC) on Monday asked the Energy Regulatory Commission (ERC) for additional market transaction to raise P841.05 million for a new market management system. Market registration fees are variable fees meant to recover additional registration requirements of Wholesale Electricity Spot Market (WESM) participants as well as to cover the budgetary requirements of the WESM for each year. The approved rate, fixed annually, is multiplied by the total metered quantity generated by each participant to arrive at their market fees payable. The additional market fee, which is equivalent to P0.0048 per kilowatt hour (kWh), will be covered by generators in both Luzon and Visayas for three years, according to the volume traded by each in the WESM. The power generators can then charge their customers accordingly. WESM operator PEMC said in its application that the amount will be used to purchase a new market management system for the WESM, which serves as a trading floor for electricity in the country. The market management system is a combination of hardware and software that facilitate the trading, dispatch and subsequent settlement of transactions in the WESM. Market mgmt system upgrade “The new market management system shall replace the existing market management system which has been in operation for more than five years and has reached its end of economic life," PEMC said. PEMC added that the new system would fix the shortcomings of the old system, as well as incorporate features and functionalities that are needed by market participants and other industry stakeholders. In the statement, PEMC said that benefits of the new system would include reducing internal trading to 30 minutes, validating outage schedules that conflict, and reporting non-complying generation units, among others. “The additional market fees shall be recovered over a period of three years and shall be imposed in addition to the prevailing market fee rate at the time of the Honorable Commission's approval," PEMC said. Prior hike also for new mgmt system Earlier, ERC had given PEMC permission to increase market fees by P0.0015 per kilowatt hour in order to upgrade the market management system. However, PEMC was forced to terminate negotiations with would-be supplier ABB, Inc. for the market management system migration because both parties failed to arrive at mutually acceptable terms. In this regard, PEMC also asked the ERC to be allowed to use the unused part of the P119.54 million WESM had collected last year in market fees to partly fund the cost of the new market management system. PEMC said the current system has been operating 24 hours a day since 2004 and is already showing its age as indicated by the declaration of several market interventions because of hardware-related problems. The opening of WESM Visayas had added an additional strain on the current system, making upgrading to a new system even more necessary. — BC/MRT, GMA News