P1-B refund awaits Meralco customers

Customers of Manila Electric Co. can expect a refund of P1.08 billion as the Energy Regulatory Commission (ERC) ordered the operator of the Wholesale Electricity Spot Market to return the amount after an audit discovered “miscalculations” made from June 2018 to May 2019.

The amount is part of some P1.77 billion that the Philippine Electricity Market Corp. (PEMC) should adjust to correct a process in the system called net settlement surplus (NSS) allocations.

ERC Chair Agnes Devanadera said in a statement that the refund to affected consumers—in Luzon and the Visayas—totaled P1.4 billion.

Aside from the P1 billion for Meralco customers, P321.4 million will be returned to customers of other distribution utilities and electric cooperatives.

“The remaining amount of P371 million will be due generation companies, retail electricity suppliers and directly connected customers,” Devanadera said. “We have directed PEMC to immediately effect the refund.”

PEMC was also directed to submit monthly reports on its compliance with the refund directive.

“An audit of relevant PEMC systems and operations may be in order,” the ERC chair said. “We need to ensure that market processes and transactions are accurately and efficiently carried out so as not to compromise the public benefit of reasonable electricity pricing, as well as to ensure that our consumers are spared from unnecessary burden.”

During the audit, the ERC flagged inconsistencies in the NSS allocations issued by PEMC. Upon validation, the spot market operator reported that the miscalculations were caused by its erroneous application of the formula in its software that is used to determine NSS allocations.

The Philippine Competition Commission (PCC) earlier signed a memorandum of agreement with ERC to collaborate on investigations that involve power sector players.

PCC is currently assessing whether recent power plant outages were valid “unplanned breakdowns” that inevitably affected supply conditions or were “manipulated” in order to raise electricity prices.

“Our partnership [with ERC] allows for the sharing of information and coordination of enforcement actions toward a more robust competition landscape in the energy sector,” PCC Chair Arsenio M. Balisacan said in a statement.

He said the team-up with ERC completed a tripartite effort along with the Department of Energy (DOE), with which PCC signed last June a separate agreement on cooperation toward the same objective.

The MOA also facilitated consultations with institutions or firms such as Philippine Electricity Market Corp., National Grid Corporation of the Philippines and generation companies to obtain relevant information.

PCC, DOE and ERC are working together to coordinate probes on alleged collusion or abuses of dominance in the power industry through information exchange and fact-finding.

The tripartite drive combines “the policy mandate of the DOE, the regulatory functions of the ERC and the market competition lens of the PCC,” Balisacan said.

He added that with the ERC onboard, the three agencies expect to make headway in probing allegations of collusion or abuse of dominance amid a series of shutdowns among power plants “that may have contributed” to the increase in electricity prices earlier this year.

Last April, the PCC said it would look into allegations of possible collusion or abuse of dominance of certain power generators following “simultaneous shutdowns that may have caused an artificial supply shortage and consequently a hike in electricity prices.”